Packaging causes hike in cereal prices

Citing cost increases for both packaging and grains&#44 General Mills&#44 Minneapolis&#44 MN&#44 increased the wholesale prices of its cereals in early August by 2.9%&#44 according to a report in Advertising Age.

By ,

This follows an earlier announcement that Ralcorp Holdings St. Louis MO was increasing prices of private-label cereals it packs. General Mills had embarked on a value-pricing strategy for cereals 16 months ago when it cut prices an average of 6%. Industry analysts agree that General Mills was hit by "genuine legitimate" cost increases but few expect major competitors to follow suit.