Kraft responds to P&G's coffee cuts

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A price war may be brewing in the coffee business. One week after Procter & Gamble lowered prices on the majority of its Folgers coffee line by 10 cents, Kraft Foods Maxwell House Coffee Co. announced a price cut twice the size on its rival Maxwell House coffees. The company said in a "move to stimulate growth," it will cut its prices, effective May 11, on selected roast and ground coffees by 25-cents per equivalent pound. The move brings the price of a 13-ounce can of Maxwell House coffee to its lowest level in more than a year, the company said. It is also cutting prices on instant coffee.

On April 2, Folgers cut its list price for 13-ounce cans of ground regular and decaffeinated coffees by 10 cents, and also cut its instant coffee prices by a dime. Folgers Singles prices were not changed. Prices for arabica coffees began to decline in late February in anticipation of a large Brazilian crop being haversted beginning in June, according the P&G. The price changes for Folgers are effective May 18, the company said.

Copyright April 1998, Crain Communications Inc.

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