CEREAL SIEGE

KELLOGG'S ANSWERS POST'S CUTS, BUT IT'S NOT A PRICE WAR

Is it possible that breakfast-cereal manufacturers are out to eat one another's lunch? That's the impression that Kellogg's gave last week when the company announced price cuts averaging 19% on two-thirds of its product line (not included: best sellers Rice Krispies and Special K). The move came in the wake of sharp gains by the Post Cereal unit of Kraft Foods, owned by Philip Morris. Post lowered prices on its brands 20% on April 15, and quickly stole nearly 4 points of Kellogg's 35.5% share of this $8 billion market. "This is not a price war," says John McMillin, a leading...

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