News

Canadian retailers were told to stop selling a popular children's product yesterday after the country's largest toy company launched a major recall amid fears children could die after swallowing small magnets.

It's the latest large-scale recall by Montreal-based Mega Brands Inc., and is raising new concerns over the ability of companies to ensure children's products are safe.

Mega Brands had received complaints over a two-year period before making a decision to initiate a recall, said corporate communications director Harold Chizick.

The company had received 44 complaints from consumers in the United States about small magnets on the products coming loose, including one about a three-year-old who had to be taken to the hospital after he put a magnet up his nose, and another about an 18-month-old who had a magnet in his mouth.

The recall affects nearly half a million toys in Canada and 2.4 million in the United States.

"We've had no serious injuries," Mr. Chizick said. "The challenge with magnets is obviously when you swallow two or more of them."

The company's stock price took a steep hit, dropping about 14 per cent, in the wake of yesterday's announcement.

The recall comes as Mega Brands struggles to recover from a massive recall in 2006, launched after one child died and numerous others were reported to be injured by swallowing magnets that came loose from the company's Magnetix building sets.

In total, the U.S. Consumer Product Safety Commission received reports of one death, one aspiration and 27 intestinal injuries related to the building sets.

Mega Brands lost millions in the wake of the 2006 recall, and its stock price plummeted. The latest recall presents a challenging setback as the company tries to demonstrate to investors that it has rejuvenated its operations.

The company had redesigned its building sets, embedding the magnets in large pieces of plastic so they can't be swallowed.

But the action figures and pre-school toys recalled yesterday were designed before the 2006 recall, and still contain magnets that could come loose and be a choking hazard.

Mr. Chizick said Mega Brands has been on a major mission to improve its safety and quality-assurance programs following the 2006 recall, and has enlisted the help of an independent testing firm to help ensure no defective toys make it onto the market.

"We have a goal of producing toys with zero defects. It's a very ambitious goal," Mr. Chizick said.

Despite the assurances, the issue of toy safety has come under increasing scrutiny in recent months as major toy companies, including Mattel Inc., recalled toys that contained high levels of lead.

While much of the criticism over unsafe toys has focused on Chinese factories that use lead paint, a majority of toy recalls are initiated as the result of design flaws - issues that originate at toy companies' headquarters in North America.

The latest recall by Mega Brands is an example of the widespread nature of design problems many toy companies face, and demonstrates the need for greater focus on improved toy testing and quality control, said Paul Beamish, professor of international business and director of the Asian Management Institute at the Richard Ivey School of Business.

"The whole emphasis on lead was misplaced. It's a real problem, but it's a small real problem. It's also the easiest to fix," Mr. Beamish said. "You need to get at the root problem. The root problem in most instances is a design problem."

Toy manufacturers are under constant pressure to put their products on the market quickly and compete with rivals for lucrative holiday sales. While those companies place a high emphasis on safety and toy testing programs, an examination of the number and type of recalls that have occurred in North America in recent years indicates the industry may not be doing enough, he said.

"Design problems are three-quarters of the reasons for all toy recalls. We shouldn't be surprised if there's a design-related problem at the root of any particular recall," Mr. Beamish said. "I think that we definitely need more attention on design issues and quality-control issues with respect to those things."

The 500,000-toy recall announced by Mega Brands yesterday covered MagnaMan Action Figures and Magtastik and Magnetix Jr. Pre-School magnetic toys. The company said it was recalling the toys due to fears children could aspirate or suffer serious intestinal injuries if the magnets are swallowed.