Product Recall

12 Months Ended

Dec. 31, 2011

Product Recall [Abstract]

Product Recall [Text Block]

NOTE13

PRODUCT RECALL

During 2010 and 2009, the Company recorded charges in connection with product recalls. The Company recorded estimated customer returns and consumer rebates as a reduction of net sales, costs associated with returned product and the disposal and write-off of inventory as COGS, and other recall costs as SGA expense.

On June 25, 2010, the Company announced a recall of select packages of Kellogg's cereal primarily in the U.S. due to an odor from waxy resins found in the package liner.

On January 16, 2009, the Company announced a recall of certain Austin and Keebler branded peanut butter sandwich crackers and certain Famous Amos and Keebler branded peanut butter cookies. The recall was expanded in February 2009 to include certain Bear Naked, Kashi and Special K products. The decision to recall the products was made following an investigation by the United States Food and Drug Administration concerning a salmonella outbreak thought to be caused by tainted peanut related products. The products subject to the recall contained peanut based ingredients manufactured by the Peanut Corporation of America whose Blakely, Georgia plant was found to contain salmonella. Charges associated with the recall were incurred during the Company's 2009 and 2008 fiscal years and reduced operating profit by a total of $65million.

The following table presents a summary of recall related charges for the years ended January 1, 2011 and January 2, 2010:

(millions, except per share amount)		2010		2009
Reduction of net sales	$	29	$	12
COGS		16		18
SGA expense		1		1
Total	$	46	$	31
Impact on earnings per diluted share	$	(0.09)	$	(0.06)

In addition to charges recorded in connection with the recalls, the Company also lost sales of the impacted products that are not included in the table above.