Recall of China-made toys unnerves parents
— -- First it was Thomas the Tank Engine trains. Then Easy-Bake Ovens. And now Big Bird, Elmo, Cookie Monster and Dora the Explorer.
All are beloved children's characters that were licensed to toy manufacturers who contracted with companies in China to make the toys. And all have had those toys recalled. Millions of them. Just since June.
The latest is Mattel mat, which announced Thursday that it was recalling 1.5 million toys made in China for the company's Fisher-Price division.
Those toys feature the Sesame Street characters — the big yellow one; the little red one; the hairy blue one — and Nickelodeon's adventuresome bilingual cartoon girl.
Mattel said it yanked the products before barely 30% showed up on retailers' shelves. Its CEO apologized to customers while telling shareholders of the world's No. 1 toymaker that the recall would reduce its second-quarter pretax operating income by $30 million from its previously reported $63.5 million. Mattel stock closed at $23.18 Thursday, down 40 cents.
The toys were recalled because of concerns about paint containing lead, which has been outlawed for use on U.S. toys since 1978. If eaten by children, lead can cause serious health issues. No injuries from these toys have been reported. "Our safety record is exemplary," said David Allmark, general manager of Fisher-Price. "All of us at Fisher-Price are devastated."
Will the recall affect the holiday shopping season? It's a small percentage of the toys sold in the USA, and retailers will have plenty on hand. But some analysts say it's too soon to tell. Some worry that consumers will be put off by the growing number of toy recalls.
More than $22 billion is spent on toys each year, not counting video games (another $12 billion).
"It's gotten to the point where something's going to have to happen or consumers will be more cautious about toys," says Chris Byrne, contributing editor of Toy Wishes magazine.
Many parents are worried already.
"It makes me nervous about the prospect of buying items that were made in China, specifically food and toys, since they can be hazardous to me and my family," said Joseph Nole of Nutley, N.J., who is a member of USA TODAY's shoppers panel. "I am finding it hard to trust China."
Wendy Greene of Orlando, another panel member, agrees. "I'll be incredibly wary of buying toys (for a niece) that may have been made in China. If I can, I'd prefer to buy American to support workers here."
Good luck. China manufactures 70% to 80% of the toys sold in the United States, estimates Byrne. One of the few toy companies that manufactures in the USA is the Vermont Teddy Bear Co. in Shelburne, Vt.
Author Sara Bongiorni and her family spent a year boycotting Chinese-made products in 2005, and wrote a book about it, A Year Without 'Made in China.'
"We had a real challenge shopping for Christmas and finding gifts that weren't from China," she says. "It was really hard to do." Their biggest problem was that once they found non-China-made toys, they were expensive or too "tasteful," and their kids didn't want them.
"They wanted cheap, colorful plastic things."
China's recall woes
China's big footprint in toy manufacturing has brought problems. Of the toys recalled so far this year, 30 of 32 have been made in China, according to the Consumer Product Safety Commission. The Toy Industry Association argues that stands to reason: China makes the most toys, so their products are more likely to be recalled.
The TIA began a program in 1996 to work with the Chinese government on toy and factory safety, says Joan Lawrence, vice president, standards and regulatory affairs. It hosted 12 safety seminars for factory workers in China, she says. The last one was July 17-18 in Guangzhou, China.
"To date, we've reached over 3,000 factory employees who represent more than 1,500 toy factories in China," she says.
But the steady stream of toy recalls this year follows some high-profile recalls of pet food made with Chinese ingredients, and imported seafood, tires, toothpaste and other goods from China.
"Up until now, these (toy) recalls have mostly been with private-label, small companies," says Byrne. "Now, it's the biggest toy company in the world."
Some of the recalls of Chinese-made toys, such as the Mattel/Fisher-Price items, were because of high lead content. Lead poisoning can be caused when kids put toys in their mouths or touch them and repeatedly put their hands in their mouths. Ingesting too much lead can cause learning and behavioral problems, such as attention-deficit disorder, and even death.
The U.S. bans lead paint from any products used by children. The CPSC is finalizing a rule that would formally ban lead in children's jewelry, which has been the subject of dozens of recalls in the past few years.
But there's something about a toy being considered dangerous.
"There's so much emotion vested in this whole thing," says Andy Bateman, CEO of branding company Interbrand New York. "It's not like a toaster oven."
Already, some parents have been looking beyond the big toy shops and instead buying specialty toys that are more environmentally friendly, says Cliff Annicelli, editor of Playthings, which is a trade magazine that covers the toy business.
"There's a movement from parents to buy toys that are green in their production or in their final product, such as organic cotton-stuffed animals or toy cars that are wind-up instead of being battery-powered," he says.
But it's an "overreaction" to expect this recall will have a dramatic effect on Christmas toy sales. "Kids are certainly going to want toys for the holiday, and parents are going to go out and buy them," Annicelli says.
"Parents are super-sensitive, as they should be, about toy safety," says Allen Adamson, managing director at branding agency Landor Associates and author of BrandSimple.
What happened at Mattel?
The recall of 83 products by Mattel is the company's biggest since 2.5 million Fisher-Price baby swings were taken off the market in 2000 after children fell out and were injured, says CPSC spokesman Scott Wolfson.
The problems with lead paint on select Fisher-Price toys was discovered by a European retailer in early July, says Fisher-Price general manager Allmark. He says that the tests done by the retailer are a regular part of Fisher-Price's quality control system.
The problems with lead paint have been traced to an independent contractor in China that Mattel has used for 15 years. Allmark said it was the first problem that has surfaced there. The plant is in southern China. Other than that general description, Allmark would not identify the name of the facility or the city in which it's based.
"This comes as a big shock and a disappointment," he says. "We obviously have to review our internal policies."
The Fisher-Price products that were recalled were sold starting from May 1 to August. The company says consumers should take the toys away from children immediately. To arrange a return and get a voucher to replace the toy, call the company's hotline, 800-916-4498 or visit the firm's website at www.service.mattel.com
"The vast majority of our product is OK," Allmark says. "If you bought a toy before May 1, you will not be affected by this recall. Clearly, this situation is embarrassing. We have to put things right."
Another toymaker is still working on its recall.
RC2, maker of the 1.5 million Thomas trains that were recalled in June, said Thursday that it took a charge of $4 million in recall costs in the second quarter, and it expects another $3 million to $4 million in recall costs for the remainder of the year.
The ability of Mattel and Fisher-Price to bounce back from the recall depends on public relations and marketing efforts, says Linda Bolton Weiser, senior vice president/research at Oppenheimer & Co. And although "it's a little early to tell," she says that so far, Mattel seems to be having trouble on that front. Based on Mattel's conference call to analysts Thursday, Bolton Weiser said the process which the company is using to recall its products was confusing. "It sounded pretty darned fuzzy on the phone," she says.
The financial impact of the recall is likely to be immaterial, she says.
"It's way beyond Mattel, because everybody is going to be looked at," says Byrne. "What's going to be done to make sure consumers know their toys are safe?"
Contributing: Jayne O'Donnell and Elaine Hughes