The cereal references cocaine, in that the name is a slang word for the drug, the cereal is consumed by snorting it up the nose, it resembles a white powder, and the side effects (nosebleeds, addiction and an inflated ego) resemble some side effects of cocaine. The packaging states the product is "Not to be taken orally".
Rails were first introduced in 1997, according to the Grand Theft Auto: Liberty City Stories manual (they were brought on to the market "last year", and LCS taken place in 1998).
The cereal is apparently still sold in Grand Theft Auto IV, as it is advertised on the Biglogs website and on small posters around the city, it also appears in some safehouses in Grand Theft Auto V, including Trevor's Trailer.
There is ambiguity or continuity issues over which company manufactures the cereal: the packaging mentions Biglogs Corp., the GTA Liberty City Stories website mentions Colombian Breakfast Inc, and the Liberty Tree article mentions Mendez Foodstuffs of Medellin.
Kids and parents don't have time to eat in the morning. Get the nutrition you need to get off and face another day, with Rails! It's the exciting new breakfast food you snort!
Kids:
Yay!
Female announcer:
Organic Colombian marshmallow crunchy bits in a breakfast treat everyone loves. Comes in strawberry, banana, bacon & egg and Peruvian flake flavors.
Kid:
Who took all my Rails?
Female announcer:
He just loved those Rails.
Kids:
More Rails, please!
Female announcer:
No more sluggish, shy, unconfident kids. With Rails, they have the nutrition they need to make it through the morning!
Gallery[]
Rails billboard ad.
Rails posters.
Rails cereal boxes inside 24/7 supermarket in GTA V.