Cereal Analysis Paper

3539 Words Oct 4th, 2010 15 Pages
Description
One of my favorite things to eat is breakfast cereal. I have been a cereal eater since I was a kid and have chosen to do my paper on the breakfast cereal industry. The NAICS code is 311320. The SIC code is 2043 Cereal Breakfast Foods. The SIC gives a description of establishments as primarily engaged in manufacturing cereal breakfast foods and related preparations, except breakfast bars. Cereal breakfast foods include: coffee substitutes made grain, hulled corn, farina, granola (except bars and clusters), hominy grits, infant cereal foods, oatmeal, rolled oats, rice breakfast foods and wheat flakes.
History
Breakfast cereal is one of the most popular forms of breakfast in the United States. Just about all of us have
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Although the Federal Department of Agriculture plays a major role in the production and distribution of cereal, it is not the only government office that is involved in the breakfast cereal industry. The breakfast cereal industry is also subject to the antitrust laws that are established by the Federal Trade Commission.
The Federal Trade Commission deals with economic issues of Americans, including consumer protection and competition jurisdiction. There are many rules and regulation set forth by this organization to help govern the breakfast cereal industry. When there is a proposed violation of the antitrust laws or higher than normal pricing on cereal, the Federal Trade Commission applies the laws.
In 1996, the Federal Trade Commission negotiated a settlement to keep cereal prices competitive. General Mills had acquired Ralcorp, the producer of the Chex brand cereal. With the acquisition of Ralcorp, General Mills now had 31 percent of the breakfast cereal market. If the Federal Trade Commission did not take action, this acquisition would have restricted the entry of new private label cereal products. The restricting of new private label cereal products would dramatically reduce the competition in the breakfast cereal market. This would have resulted in higher prices for Chex brand cereals (Federal Trade Commission, 1996).
Market Structure
The NAIC code is for the breakfast cereal industry
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