And just to clarify the subject further, let me quote Bloomberg, who summed the FDA’s problem up quite nicely:

“The FDA took issue with Cheerios boxes that say the cereal can lower cholesterol. That statement qualifies Cheerios under U.S. regulations as an unapproved new drug, the FDA said. While the agency allows a health claim linking soluble fiber from whole grain oats to a reduced risk of heart disease by means of lowering cholesterol, Cheerios boxes have cholesterol as a prominent, stand-alone claim, the FDA said in its letter, dated May 5.”

Sounds like semantics to me… the very issue that the FDA seems to have taken issue with, and therefore a case of the pot calling the kettle black.

Why This Is Concerning, And Not Just For General Mills And Cheerios

For its part, General Mills has issued a statement saying that it would try to resolve the issue with the regulator, and it doesn’t appear to be panicking at all. But I have two main issues with this drama.

#1 - This whole kafuffle is based off of the belief that consumers are too stupid to think for themselves. Could this be true? Possibly in some cases. But the more we encourage people to let others think for themselves, the more problems we dig for ourselves.

Sure, it takes a bit of extra time to think about an issue - or God forbid, even research it! - instead of taking everything at somebody else’s word. But can you imagine the elevated levels of responsibility we would see if the public was encouraged to put a little effort into our beliefs?

Just one example: If people had looked into the mortgages they were purchasing instead of leaping at the first opportunity, we probably wouldn’t have seen the housing bubble or the subsequent burst that began this recession.

#2 - This is the first time in over nine years that the FDA has gone after a mainstream food product. Why? According to our above-mentioned Bruce Silverglade, the agency is enjoying its newfound authority under President Obama, who’s administration, for better or worse, has taken a very special interest in managing the financial sector and the automotive sector, while promising to revamp other sectors such as healthcare.

Now you can argue the benefits of the government getting so involved with troubled corporations. But why would it want to encourage using seriously stressed charges to vilify a company that actually is doing well during these economically difficult times?

GM has lost an extremely significant chunk of its share price since the government stepped in, as have those big banks and mortgage companies. Could the same happen to General Mills? How many jobs will the company have to cut because people react against this “news?”

Those might seem like silly questions to contemplate, but remember when we believed in the idea that certain companies were too big to fail or that investing in certain stock was fool proof.

Enough said.

Wednesday, May 13, 2009 - by Jeannette Di Louie, Assistant Editor, Mt. Vernon Research