And the backlash against the decision has already begun: Here's a petition on Huffington Post protesting "That this action by Kellogg's, while legal, is totally bogus." And commenters under the LA Times item also seem to believe that Kellogg's move is an overreaction.
Phelps was also suspended by USA Swimming for three months over the photo. Subway, with whom Phelps also has a contract, has remained silent on the matter ... so far.
BNET's take: Yes, Kellogg's reaction to the photo is a step too far, in terms of common sense. Cornflake-buying adults know there is no link between marijuana and Cornflakes. But we're not talking about common sense here, we're talking about brand management. Look at this from Kellogg's point of view: While they certainly make sales to potheads with the munchies, the vast majority of their revenue comes from parents buying the cereal for their kids. All they wanted was a nice role model to make their boxes interesting. They got Tommy Chong instead.
For Kellogg to do nothing would be a tacit endorsement of the idea that marijuana isn't as harmful as DARE would like you think it is. And while marijuana may indeed not be that harmful, that's not a breakfast-table discussion that Kellogg wants to trigger between parents and kids every morning.
Subway, on the other hand, has a slightly different audience. It's not so much of a kids' brand. Yes, children eat there. But their lunchtime lines are significantly older than the milk-spilling rugrats Kellogg is feeding four hours earlier. Subway's brand can probably withstand some adult conversation about whether Phelps' act was the worst thing in the world. It will be interesting to see if the company is willing to take that risk.