1. In large bowl, mix together cereal, milk powder, onion, ketchup, egg, salt and pepper. Add ground beef, mixing only until combined. Using level 15 ml (1 tbsp) measuring spoon, portion meat mixture. Roll into balls; place on foil-lined baking pan.
2. Bake at 200°C (400°F) about 12 minutes or until browned. Drain off excess fat.
3. Meanwhile prepare sauce. In 4 L (4 quart) saucepan combine sauce ingredients. Simmer, uncovered, over low heat 15 minutes, stirring frequently. Add meatballs; simmer 10 minutes longer.