US: Kellogg may take US$30m hit from Mini-Wheats recall

By Dean Best | 11 October 2012

Kellogg has admitted the cost of recalling boxes of Mini-Wheats cereal across the US could cost the company up to US$30m.

The company said yesterday (10 October) the recall bill would be $20-30m, a charge that will be recorded in its third-quarter results, announced next month.

The Food and Drug Administration also issued Kellogg's recall notice yesterday. The statement seven lines of Frosted Mini-Wheats Bite Size Original cereal that were to be pulled, as well as two SKUs of Mini-Wheats Unfrosted cereal.

"We have initiated a voluntary recall due to the possible presence of fragments of flexible metal mesh from a faulty manufacturing part," the Kellogg statement read.

The company reiterated its forecast of full-year earnings of $3.18-3.30 a share. It said a "good performance" from its Pringles business and changes in the estimates of "certain non-operating items" meant it could offset the costs of the recall.

Two years ago, Kellogg had to recall cereal products in the US as a result of an "uncharacteristic off-flavour and smell" coming from the liner in the package.

Sectors: Cereal, Financials, Food safety

Companies: Kellogg, Pringles

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