Statement on the Breakfast Cereals Industry

During the course of my previous work in industrial organization and antitrust I published a number of articles in those fields and a book, Fair Competition, The Law and Economics of Antitrust Policy, which I wrote in collaboration with Professor Joel B. Dirlam, and served as a member of both the Attorney General's National Committee to Study the Antitrust Laws, during the Eisenhower Administration, and the National Commission on Antitrust Laws and Procedures, under President Carter. What I plan to do in this brief statement, after repeating the warning I've already given you about my limited professional study in this industry, is to emphasize and briefly explain the two major conclusions that I reached during my service as advisor to the District Court in the Kraft Case, which I spelled out in the testimony I gave at the end of the trial, setting forth my recommended resolution of the antitrust issue. First, I expressed the view that there was a strong basis for public dissatisfaction with the performance of the breakfast cereals industry. But, second, I was in the evidence presented in the case, insofar as I was able to assess it, an insufficient demonstration of the likelihood—or even, indeed, possibility—that the acquisition of Nabisco by Post would further impair the effectiveness of competition in breakfast cereals to justify its reversal under the antitrust laws. Since these two conclusions, expounded in that single piece of testimony, represent in effect the sum total of the message I have to offer this committee I take the liberty of attaching the relevant pages of the transcript of that testimony.