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The Cheerios Debacle: Could General Mills Suffer The Same Fate As General Motors?
By: Smart Profits Report   Wednesday, May 13, 2009 5:33 PM

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As a kid, I liked Kix, Alphabits (surprisingly without the marshmallows) and Cheerios. But my young opinion doesn’t seem to matter MUCH when weighed against that of the Food and Drug Administration (FDA). I can’t tell you whether the FDA takes issue with the first two, but we now know that they have something against Cheerios.

Maybe one of its executives got sick off of them as a kid? Considering the innocuous ingredients in the cereal, I highly doubt that but stranger things have happened, as evidenced by the current skirmish between them and General Mills Inc. (NYSE: GIS).

“We certainly don’t have any issues with the safety of Cheerios,” Stephen Sundlof, director of the FDA’s Center for Food Safety and Applied Nutrition, reported. “We just believe that the labeling on this particular product has gone beyond what the science supports.”

And, he went on to say, his agency didn’t even think about looking into the matter until late last year when it received a complaint from the National Consumers League, a Washington-based advocacy group. The exact allegation: Cheerios’ health claim makes it out to be a drug.

Yup, you heard right: Cheerios = drugs. So while we’re considering legalizing marijuana, the General Mills favorite is under fire.

Cheerios: Mother Tested, Kid Approved, FDA Rejected

OK, so that’s a variation of the Kix slogan, but you get the point.

For years, Cheerios has run under the advertisement that it reduces cholesterol levels and reduces the risk of both heart disease and cancer. According to the FDA though, that claim is not only suspect, but could result in legal action if General Mills doesn’t take necessary steps to either change their claim or prove that the cereal does in fact do what it says it does.

“Consumers are influenced by food claims on labels,” says Bruce Silverglade, director of legal affairs for the Center for Science in the Public Interest, in Washington. “To the extent that they’re misleading, it’s as bad as a doctor giving our poor medical advice.”

No offense to the National Consumers League, but I’ve seen those ads for years now, and never once thought of using Cheerios, a traditional children’s cereal, as a drug. Nor have I looked at the cheerful yellow box and believed for even a fraction of a second that I would eliminate the risk of contracting a heart disease if I only ate enough of the oats-based breakfast food… no matter what Mr. Silverglade seems to think.

Could the advertisement be misleading? Maybe and maybe not. Even the FDA doesn’t seem so sure about that.

According to Tom Forsythe, a General Mills spokesman, it isn’t “the science” behind the claim at all that has the FDA demanding change.


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The above story is the opinion of the author only and it does not reflect iStockAnalyst opinion. Further, the author is not personally advising you regarding the suitability of the story for your investment needs. In no event iStockAnalyst will be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from or arising out of, or in connection with the use of this information. Please consult your investment advisor before making any investment decision.
  
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