Kellogg Orders Massive Mini-Wheats Recall on Metal Mesh Fears

by Nate Wooley | October 11, 2012 9:32 am

Cereal maker Kellogg (NYSE:K[1]) is recalling millions of boxes of a popular cereal because of safety concerns — namely, the boxes might be contaminated with pieces of metal from faulty parts in the assembly process.

Boxes of Frosted Mini-Wheats Bite-Size Original and Mini-Wheats Unfrosted Bite Size are being recalled[2].

The recall is precautionary and no injuries have been reported. 2.8 million boxes of the cereals have been pulled from stores, according to the Wall Street Journal[3]. The company says it’s likely that most boxes are now off the shelves.

This is the third year that Kellogg is facing significant costs due to supply chain issues. During 2011 and 2012, Kellogg spent more than $200 million dealing with manufacturing issues. In 2010, a variety of cereals were recalled due to improper packaging.

Kellogg anticipates taking a $30 million hit to its bottom line because of the recall, the WSJ reports, but it said its earnings target would not change. Better-than-expected results from other products are expected to offset the loss on the recall.

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Endnotes:
  1. K: http://studio-5.financialcontent.com/investplace/quote?Symbol=K
  2. are being recalled: http://www.fda.gov/Safety/Recalls/ucm323202.htm
  3. according to the Wall Street Journal: http://online.wsj.com/article/SB10000872396390444799904578048752257118008.html
  4. Kellogg Makes Second Try at Chinese Market: http://investorplace.com/2012/09/kellogg-makes-second-try-at-chinese-market/
  5. Chobani Greek Yogurt Makes Man a Billionaire: http://investorplace.com/2012/09/chobani-greek-yogurt-makes-man-a-billionaire/

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