Food Roundup: Attacks on Cheerios, PBG, Burger King and More

(MoneyWatch)  FDA targets Cheerios health claims -- General Mills could be in trouble for claiming its cereal can lower your cholesterol in six weeks. Though the claim has appeared on Cheerios boxes for more than two years, the Food and Drug Administration is only now cracking down, telling the company that if it does not correct these violations, the government may seize every box of Cheerios in the country. Essentially, the FDA says, General Mills has been illegally marketing Cheerios as a drug.[Sources: BNET Advertising, Food Politics]

PepsiCo sues bottler -- A week after Pepsi Bottling Group rejected PepsiCo's takeover bid, PepsiCo is suing the bottler over a board meeting to which, PepsiCo alleges, board members affiliated with PepsiCo were not invited. A shareholder rights plan was developed at this meeting, making PepsiCo's attempts to buy back remaining shares in the company more difficult. PepsiCo recently offered $6 billion total for Pepsi Bottling and PepsiAmericas, but the two bottlers rejected the offer, saying it was "grossly inadequate." [Source: Wall Street Journal]

Franchisees sue Burger King -- A group representing franchisees of the chain says Burger King is trying to strip the outlets of their syrup rebate funds and divert the money into a national advertising campaign. Previously, stores received rebates from soft drink syrup purchases directly and could use those rebates for store repairs, equipment or local advertising. Now Burger King wants to take that money -- totaling up to $40 million a year -- and roll it into the national advertising budget, but franchisees say the company can't unilaterally alter the contract without their approval. [Sources: Dow Jones, BNET Advertising]

CSPI attacks restaurants on salt -- The Center for Science in the Public Interest called upon the restaurant industry to shape up on the salt front after it found that a majority of dishes at major chains contain more than an entire day's recommended daily allowance of sodium. The National Restaurant Association said it was "disappointed" with the attack, as "the restaurant industry has been making tremendous strides on the topic of sodium and other issues related to healthy cuisine." [Sources: Nation's Restaurant News, QSR]

State of New York to phase out bottled water -- Governor David Paterson signed an executive order to eliminate government purchases of bottled water. Environmentalists have long said bottled water is responsible for unnecessary transportation and bottle waste, thus contributing to pollution and global warming. The economy has given a great boost to the anti-bottled water campaign, as tap water is also the cheaper option. [Source: Food & Water Watch]