High Cereal Prices and the Prospects for Relied by Expansion of Private Label and Antitrust Enforcement

Congressmen Gejdenson and Schumer should be commended for their persistent interest in the performance of the ready to eat cereal industry. The release of their well documented and thorough report, "Consumers in a Box" a year ago focused media attention on high cereal prices, which in turn documented widespread consumer anger over this industry's performance. Today, the Congressmen have asked for an assessment of the factors that contribute to high cereal prices, and the outlook for consumer relief from the expansion of private label cereals, and more effective antitrust enforcement. This is no small task. I would like to begin by responding to the industry's rebuttal to the Congressmen's report. None of the cereal manufacturers has commented publicly on the Congressional inquiry. Instead, they have designated Mr. Jeffrey Nedelman of the Grocery Manufacturers of America as their common spokesman. The GMA's entire written response consists of a three page press release that contains seven "facts". The fact sheet is reproduced in the appendix.