Food giant Kellogg's is taking the government to court over new rules that would prevent some cereals being prominently displayed in stores because of their high sugar content.
Kellogg's says the rules fail to consider the nutritional value of the milk added to the product.
The company says independent market data shows cereals are eaten with milk or yoghurt in 92% of cases.
But the government said the new rules would help tackle childhood obesity.
Popular brands such as Crunchy Nut Corn Flakes and Fruit and Fibre are classified as foods that are high in fat, sugar or salt in their dry form and so retailers may be prevented from displaying such products in prominent positions, harming sales.