Lawmakers Urge Further Cereal Price Cuts
Cuts in the cost of breakfast cereals announced a year ago by the four major U.S. manufacturers are “less than meets the consumer’s eye,” two congressmen charged Thursday, and they threatened to seek antitrust action if the cereal makers don’t further reduce their prices.
Reps. Charles E. Schumer (D-N.Y.) and Sam Gejdenson (D-Conn.) also warned that a recent price hike by General Mills Inc. could indicate a cycle of price increases is resuming.
For the record:
12:00 a.m. July 26, 1997 For the Record
Los Angeles Times Saturday July 26, 1997 Home Edition Business Part D Page 2 Financial Desk 2 inches; 39 words Type of Material: Correction
Cereal makers--A story in Friday’s editions should have identified Post-Nabisco as one of four cereal makers whose pricing is being criticized by two members of Congress. The company was misidentified as RJR Nabisco Holdings, which, in fact, has sold its cereal division to Post.
A report prepared by the two lawmakers showed that although General Mills, Kellogg Co., RJR Nabisco Holdings and Quaker Oats--which control roughly 80% of the cereal market--promised cuts averaging 16% per box on selected products, subsequent reductions on coupons and decisions not to lower prices on all cereals meant most Americans saved about 9.7%.
