Recalls Of Toys Pressure Agency
Friday, August 3, 2007
Mattel's announcement that it was recalling 1.5 million toys could force a reexamination of how the $22 billion toy industry is overseen by the Consumer Product Safety Commission, which largely relies on companies to report problems themselves, consumer groups, analysts and lawmakers said yesterday.
Like the 1.5 million Thomas and Friends trains and accessories recalled by RC2 Corp. in June, the Chinese-manufactured toys in this recall contained too much lead, Mattel said.
Safety problems with other Chinese products, such as seafood and tires, have raised questions about the U.S. government's ability to oversee imports.
"The Consumer Product Safety Commission does not have the resources to catch this type of problem," Mark Pryor (D-Ark.), chairman of the Senate Commerce Committee's consumer affairs subcommittee, said in an interview. "We're seeing this over and over. This is an agency that is withering on the vine."
Four senators, including Majority Whip Richard J. Durbin (D-Ill.), sent a letter yesterday to the commission's acting chairman, Nancy A. Nord, requesting an assessment within seven days of whether the United States should inspect all children's products from China that contain paint.
About 80 percent of the toys bought in the United States and about 65 percent of Mattel's toys are made in China, according to the Toy Industry Association and the company. "Toys were one of the first consumer products to go to China in a big, big way," said M. Eric Johnson, a management professor at the Tuck School of Business at Dartmouth College, who has studied the trend.
About 60 percent of all product recalls this year have been for goods manufactured in China, according to the safety commission. Lead has been a particular problem. The agency has issued 18 recall notices for 6.7 million pieces of jewelry for children this year because of dangerous levels of lead, and nearly all of them were from China. There were 10 lead-related recalls in 2006, according to the agency.
Mattel said it learned of the problem with its toys -- products marketed by the company's Fisher-Price division, including toys shaped like Big Bird, Elmo and Dora the Explorer -- from a European retailer and confirmed it with its own tests. The Chinese manufacturer, which the company refuses to identify, has worked for Mattel for 15 years and "to the best of my knowledge" had not had problems in the past, said David Allmark, general manager and senior vice president of marketing of Fisher-Price.
Mattel is investigating the incident and stopped using the Chinese plant in early July.
Of the 1.5 million products affected, 967,000 were distributed in the United States, including about 300,000 that made it onto store shelves, Allmark said.
The recall was particularly surprising to some analysts because Mattel is known for having strict safety standards. "It is just unfortunate -- having those standards, yet one was breached," Allmark said. "It shows that those [rules] were not infallible and we have to do even more."
The toy industry is generally considered diligent and cautious, industry analysts said. Companies are required to report any potential problems to the safety commission, which sets industry standards and does some sample testing. "I really think the CPSC is extremely strict as is," said Jim Silver, a toy industry analyst and editor of Toy Wishes magazine.
"The significance of that is that we're seeing a breakdown of that system. It raises a question of whether the industry can continue to be self-policing," said Christopher Byrne, an independent toy analyst known as the Toy Guy. "If something like this can happen to Mattel, which has some of the most stringent standards, what does that mean for the industry?"
The safety commission has begun an investigation into the Mattel recall and how such problems can be prevented, Nord said in a written statement. Officials at Mattel "lived up to their reporting obligation," agency spokeswoman Julie Vallese said.
But the incident could amplify scrutiny of the agency, which has 85 to 100 field investigators. The three-person commission has been without a permanent chairman and a quorum since last year, which means that it cannot sue manufacturers, set civil penalties or write rules. The agency has proposed legislation to give it more legal authority, to make it illegal to sell recalled products, and to raise the maximum civil penalty for violations from $1.8 million to $10 million.
"The agency is running at full speed, and is also running more efficiently than it has run in the past, but would welcome additional resources that Congress may choose to provide," Vallese said.