FDA Attacks Cheerios Over Claims as a Drug (GIS)

General Mills, Inc. (NYSE: GIS) maybe facing the same types of battles many supplement and diet product companies have seen  with the FDA over advertising claims.  The good news is that this is not a direct safety issue, but it is an issue over the claims of the long-lasting Cheerios whole-grain oat cereal.

The letter from the FDA noted:  Based on claims made on your product’s label, we have determined that your Cheerios® Toasted Whole Grain Oat Cereal is promoted for conditions that cause it to be a drug because the product is intended for use in the prevention, mitigation, and treatment of disease. Specifically, your Cheerios® product bears the following claims ort (presumje that is “on’) its label: “you can Lower Your Cholesterol 4% in 6 weeks” AND “Did you know that in just 6 weeks Cheerios can reduce bad cholesterol by an average of 4 percent? Cheerios is … clinically proven to lower cholesterol. A clinical study showed that eating two 1 1/2 cup servings daily of Cheerios cereal reduced bad cholesterol when eaten as part of a diet low in saturated fat and cholesterol.”

The FDA says that these health claims misbrand the product.  The FDA went on to note that although FDA has issued a regulation authorizing a health claim associating fiber-containing grain products with a reduced risk of coronary heart disease, the claim on the company website does not meet the requirements.  Further, the FDA warning letter goes on to hit the company over its claims that Cheerios could lower chances of cancer.

As for the rest, you can read the FULL LETTER from the FDA.  You can also still see the exact claims on the Cheerios site.

So far this has had no impact on General Mills’ stock.  Its shares are up 1.15% at $53.53, and the 52-week trading range is $46.37 to $72.01.  Maybe this is proof that there is no such thing as bad press.

JON C. OGG