General Mills hits out at ethanol subsidies

Alan Rappeport:

General Mills hit out at ethanol subsidies as a driver of rising food prices in the US, arguing that they needlessly fuel inflation.

“We’re driving up food prices unnecessarily,” Ken Powell, chief executive of General Mills, said in an interview with the Financial Times. “If corn prices go up, wheat goes up. It’s all linked.”

General Mills, which makes Cheerios cereal, Progresso soup and Häagen-Dazs ice-cream, is the world’s sixth-largest food company by revenues. It said last month that it expects its input costs to increase up to 11 per cent next year as it lowered its earnings forecast on inflation fears.