Kellogg Near Agreement to Stave Off $1 Billion Lawsuit

Food Giant Accused of Unfair and Deceptive Children's Marketing Practices

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WASHINGTON (AdAge.com) -- Kellogg Co. is nearing an agreement to forestall a threatened $1 billion lawsuit by agreeing to impose new limits on its marketing. The move follows two consumers groups accusing the Battle Creek, Mich., company of unfair and deceptive practices in marketing food of poor nutritional quality to children.

Consumer-protection laws
In January 2006, the Center for Science in the Public Interest and Campaign for Commercial-Free Kids threatened to sue Kellogg and Viacom under state consumer-protection laws. Kellogg has been negotiating with the groups ever since.

Kellogg is also one of 11 marketers to have joined the Children's Food and Advertising Initiative of the National Advertising Review Council by agreeing to devote 50% of its ad messages aimed at children under 12 to healthier foods or lifestyles, and to limit the use of licensed characters in their advertising. As part of the agreement, each marketer is to develop a public pledge on how it will implement those changes.

'Shrek'
A CSPI official said the group was hopeful that any forthcoming agreement will expand Kellogg's pledge. The marketer recently began a promotional campaign in connection with the recently released animated movie "Shrek the Third" that uses movie characters to promote various products.

One of the cereals featuring the "Shrek" characters is Kellogg's Corn Flakes. Sen. Tom Harkin, D-Iowa, has been critical of past food tie-ins for "Shrek" that promoted sugary cereals.

Kellogg declined to comment on the status of negotiations, other than to say that it believes the dialogue "continues to be productive."
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