Recalls put consumer product makers on defense
NEW YORK (Reuters) - A rash of recent product mishaps, from tainted pet food that killed animals to a recall of toy trains due to lead paint, have consumer product executives defending their operations and condemning those who sacrifice safety in the hopes of turning a quick profit.
"We manufacturers have a moral and a practical responsibility to ensure the quality and safety of our products. Period. There's no equivocation," Playtex Products Inc. PYX.N Chairman and Chief Executive Neil DeFeo said at the Reuters Consumer and Retail Summit this week.
"If we're not doing everything as a company we can and should be doing to ensure the safety of our products, then we shouldn't be selling them."
Consumers have confronted numerous headlines in recent months questioning the safety of items landing on store shelves.
Earlier this year, pet food, tainted with melamine, caused the deaths of cats and dogs across the United States. This month, Colgate-Palmolive Co. (CL.N) warned that counterfeit "Colgate" toothpaste, which may contain a toxic chemical, had been found in U.S. discount stores, and RC2 Corp. RCRC.O said it was recalling 1.5 million Thomas & Friends wooden railway toys because the surface paint contained lead.
Many of the products involved in the recalls have their origins in China, a market that U.S. retailers and manufacturers have increasingly used to make or buy their products. But the scandals have shaken global confidence in the made-in-China label.
Procter & Gamble Co.'s (PG.N) Global Product Supply Officer, Keith Harrison, said at the Reuters Summit that about 85 percent of the company's finished products are made in its own plants. But they are keeping a close eye on all of their suppliers, especially those in regions like China.
"Are we paying more attention to what's going on in a few developing markets than we would in Western Europe or North America? Yes," he said.
"Some systems have a much more rigorous structure than others do, and I think it's safe for you to assume that our intensity is inversely proportional to their structure. So, where there's little structure there, we're supplementing that with our own intensity."
Jarden Corp.'s (JAH.N) Chief Executive Martin Franklin said it is "very difficult to find perfection" in any supply chain, but companies are responsible for their quality control.
"You get what you pay for," he said. "If you don't invest the money on quality control, on the basic checks that need to go on in order to provide the product, and you start just going on price, price, price, and you start cutting corners, you're going to have issues."
He said short-term savings will mean longer-term losses.
"The whole point of market leadership is you're supposed to invest in your brands and make them the best out there so that the consumer perceives not just value but quality and everything else," he said.
"If you let the quality of your brand go down in terms of its quality standards, it is not very long before you don't have a brand."