New Visitors Privacy Policy Sponsorship Contact Us Media
Baby Boomers Family Green Home and Auto In Critical Condition Just Starting Out Lifestyle Money
-advertisement -
News & Advice Compare Rates Calculators
Rate Alerts  |  Glossary  |  Help
Mortgage Home
Auto CDs &
Retirement Checking &
Taxes Personal

Home > Savings >

Product recalls

During the summer of 2007, toy behemoth Mattel Inc. announced a global recall of 20 million Chinese-made toys (almost one million in Canada alone) due to toxic levels of lead paint and reports of kids swallowing tiny magnets. The recalls didn't stop there. That same year, Menu Foods announced a recall for all pet food containing imported wheat gluten from China, and tainted Chinese toothpaste imports were found to contain a toxic chemical used in antifreeze.

While it's easy to assume that we're experiencing a recall crisis, that's not entirely correct, says Debi Andrus, assistant professor of marketing at the University of Calgary's Haskayne School of Business and author of a recent report on product recalls in Canada.

According to her study, of the 837 announcements made between 2002 and 2006 (not including vehicles and medical devices), approximately 69 percent of recalls involved food. The primary cause of recalls was allergy alerts (48 percent), followed by dangerous ingredients (20 percent) and design faults (10 percent). Toys accounted for 10 percent of recalls.

What's more, the number of recalls that are considered high risk, where there's been a reported injury or death related to the product, accounts for only 20 percent of total product recalls.

"Canadians should be cautious about what they're purchasing," says Andrus, but "if you actually look at the number of recalls relative to the number of products that we consume, the rates are quite reasonable. It's not a crisis, even though it may appear to be a crisis."

What is a recall?
A recall happens when a product is declared unsafe for use or consumption and may pose a health risk. In the case of food, this may be due to bacterial contamination or an allergy alert, where a label is incorrect or omits an ingredient (such as nuts, eggs or shellfish) that can cause adverse reactions in some people.

Likewise, consumer products such as toys may be recalled because of a defect that makes a product unsafe (such as small parts that break off), when an injury or death is caused by a unsafe product (such as a choking incident) or if a product doesn't comply with legislation (such as lead levels in paint).

Why recalls happen
Various triggers can initiate a recall, including consumer complaints, public health reports, company-initiated concerns, international reports or government inspections.

"We have food recalls on an ongoing basis," says Garfield Balsom, food safety and recall specialist at the Canadian Food Inspection Agency, adding that in the past five years, there hasn't been a dramatic year-over-year increase. "You're always going to have a certain amount of recalls with the (amount) of processing of food that's generated throughout the world."

Some observers say it's the price of globalization, where products are designed in one country and manufactured at a substantially lower cost in a second, often developing, country. The bigger question becomes, is "Made in China" to blame?

"People are right in being concerned, but a lot is misdirected," says Hari Bapuji, co-author of a recent report on toy recalls and assistant professor at the University of Manitoba's Asper School of Business. "If you look at the kind of problems that we are seeing in recalls over the years, it's a design problem, not the manufacturing."

(continued on next page)
-- Posted: Dec. 5, 2007
See Also
Estate planning abroad
Women's investment clubs
Rent, don't buy
More savings stories
Overnight Averages* +/-
Variable open mtg 3.73%
48 month new car loan 8.38%
1 yr redeemable GIC 0.65%
Compare rates in your province
Auto loans
Chequing accounts
Credit cards
Home equity loans
Personal loans
Savings Accounts
What Bankrate Readers
are reading
Credit and Debt
top of page
- advertisement -

About Bankrate | Privacy Policy/Your California Privacy Rights | Online Media Kit | Partnerships | Investor Relations | Press Room | Contact Us | Sitemap
NYSE: RATE | RSS Feeds |

* Mortgage rate may include points. See rate tables for details. Click here.
* To see the definition of overnight averages click here. ®, Copyright © 2016 Bankrate, Inc., All Rights Reserved, Terms of Use.