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


  • Ronald W. Cotterill

    () (University of Connecticut)


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.

Suggested Citation

  • Ronald W. Cotterill, 1996. "High Cereal Prices and the Prospects for Relief by Expansion of Private Label and Antitrust Enforcement," Issue Papers 11, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
  • Handle: RePEc:zwi:ipaper:11

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    References listed on IDEAS

    1. Ronald W. Cotterill & Lawrence E. Haller, 1997. "An Econometric Analysis of the Demand for RTE Cereal: Product Market Definition and Unilateral Market Power Effects," Food Marketing Policy Center Research Reports 035, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    2. Langan, Glenn E. & Cotterill, Ronald W., 1994. "Estimating Brand Level Demand Elasticities and Measuring Market Power for Regular Carbonated Soft Drinks," Working Papers 116168, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
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    1. Cotterill, Ronald W & Putsis, William P, Jr & Dhar, Ravi, 2000. "Assessing the Competitive Interaction between Private Labels and National Brands," The Journal of Business, University of Chicago Press, vol. 73(1), pages 109-137, January.
    2. Nevo, Aviv, 2001. "Measuring Market Power in the Ready-to-Eat Cereal Industry," Econometrica, Econometric Society, vol. 69(2), pages 307-342, March.
    3. Ronald Cotterill & William Putsis, 2000. "Market Share and Price Setting Behavior for Private Labels and National Brands," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 17(1), pages 17-39, August.
    4. G√ľnter J. Hitsch, 2006. "An Empirical Model of Optimal Dynamic Product Launch and Exit Under Demand Uncertainty," Marketing Science, INFORMS, vol. 25(1), pages 25-50, 01-02.
    5. Gregory K. Price & John M. Connor, 2003. "Modeling coupon values for ready-to-eat breakfast cereals," Agribusiness, John Wiley & Sons, Ltd., vol. 19(2), pages 223-243.
    6. Richards, Timothy J. & Patterson, Paul M., 2002. "Strategic Interaction With Multiple Tools: A New Empirical Model," Working Papers 28545, Arizona State University, Morrison School of Agribusiness and Resource Management.
    7. Avi Goldfarb & Qiang Lu & Sridhar Moorthy, 2009. "Measuring Brand Value in an Equilibrium Framework," Marketing Science, INFORMS, vol. 28(1), pages 69-86, 01-02.
    8. Herrmann, Roland & Moser, Anke & Werner, Elke, 2002. "Neue empirische Befunde zur Preissetzung und zum Verbraucherverhalten im Lebensmitteleinzelhandel," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 51(2).
    9. Connor, John M., 1997. "Couponing As A Horizontal And Vertical Strategy: Theory And Effects," Working Papers 14344, University of Minnesota, The Food Industry Center.

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    cereal; antitrust; value;


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