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Kellogg to up ads to counter rising costs

Oct. 29, 2007 at 6:54 PM

BATTLE CREEK, Mich., Oct. 29 (UPI) -- Kellogg Co. will boost its breakfast-foods advertising to offset rising commodity costs, the U.S. company's chief executive officer said Monday.

The Battle Creek, Mich., company plans a double-digit percentage increase in advertising spending in the fourth quarter as a way to encourage consumers to buy more of its Special K cereal, Eggo waffles and Pop-Tarts toaster pastries, David Mackay told The Wall Street Journal.

This follows a similar third-quarter advertising increase that helped the company compensate for high ingredient costs in the period, the Journal said.

Mackay told the newspaper "about 40 percent of our full-year commodity inflation will hit in the fourth quarter," referring to higher costs for wheat, corn and edible oils.

The company's third-quarter revenue rose 6.4 percent to $3 billion and net income rose 8.5 percent to $305 million, or 76 cents a share, beating most forecasts.

But Kellogg said 2008 earnings would not match Wall Street's expectations.

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