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Food Marketing Policy Issue Paper
Food Marketing Policy Issue Papers address particular policy or marketing issues in a non-technical manner. They summarize research results and provide insights for users outside the research community. Single copies are available at no charge. The last page lists all Food Policy Issue Papers to date, and describes other publication series available from the Food Marketing Policy Center. Tel (860) 486-1927 Fax (860) 486-2461 email: fmpc@canr1.cag.uconn.edu http://vm.uconn.edu/~wwware/ fmktc.html

No. 17

October 1998

Jawboning Cereal: The Campaign to Lower Cereal Prices

by

Ronald W. Cotterill

Food Marketing Policy Center University of Connecticut

Food Marketing Policy Center, Department of Agricultural and Resource Economics, University of Connecticut, 1376 Storrs Road, U-21, Storrs, CT 06269-4021

Jawboning Cereal: The Campaign to Lower Cereal Prices by Ronald W. Cotterill Abstract This article introduces the Forum by explaining the sequence of events related to the jawboning campaign and subsequent reductions in cereal prices. It also introduces the main issues on the vigor of competition and pricing that are analyzed in subsequent papers. Jawboning as a public policy strategy is assessed and found useful in certain circumstances such as those in the breakfast cereal industry in the mid 1990’s. The jawboning campaign was effective in advancing price competition in an industry that successfully resisted repeated antitrust efforts to promote competition. The RTE cereal industry is now undergoing major structural changes that are on balance pro competitive. (ECONLIT Cites: L100, L410, L660) Key words: jawboning, nonprice competition, market power, market concentration, antitrust enforcement

Jawboning Cereal: The Campaign to Lower Cereal Prices by Ronald W. Cotterill∗ This Agribusiness Forum contains a

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