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Toy importers fined for wholesaling retailers unsafe goods

Courtroom and gavel

Two toy importers have been fined a combined $118,000 for supplying unsafe goods to retailers in New Zealand.

SDL Trading Limited was fined $64,000 in the Auckland District Court while Greenstar Holdings Limited was fined $54,000 in the Manukau District Court.

SDL has been prosecuted before, fined $81,000 for supplying an unsafe baby bath toy in March 2018.

The firm pleaded guilty to one representative charge under the Fair Trading Act 1986, relating to a fire engine toy it supplied to retailers throughout New Zealand, which did not comply with the product safety standard for children’s toys.

Judge Paul of Auckland District Court said during the sentencing of SDL that the conduct was highly careless because SDL was on notice and armed with the necessary knowledge of the need to comply with the product safety standard.

He said despite some compliance efforts, no critical review of the compliance regime was undertaken and efforts to avoid repeat transgressions were woefully inadequate.

Anna Rawlings, chair of the Commerce Commission, has reminded traders to learn about product safety standards and use a thorough process to ensure the goods they are selling comply with those standards.

She recalled the display box for the fire truck toy carried warnings stating “3+ Ages” and “Not for children under 3 years”. 

Evidence provided to the commission by a psychologist was that the toy was for use by children under 3 years of age for a number of reasons including its size and weight, simple design, bright and contrasting colours, and easy recognisability as an emergency vehicle.

“Both of these cases reiterate that traders cannot avoid their obligations in relation to toys that are for use by children aged up to and including 36 months of age simply by labelling them as suitable for children aged over 3 years of age.” 

SDL supplied a total of 348 of the toys to various retailers between October 2017 and August 2018. 

Meanwhile, Judge Blackie in the Manukau District Court noted the need for consistency with other District Court decisions in imposing the fine of $54,000 for Greenstar Holding Limited for not carrying out any checks of its own to ensure compliance.

“With the interests of the young and vulnerable in mind, I am of the view that substantially higher penalties could be justified for breaches of the product safety standard for children’s toys.”

He said the company simply relied on a warning label which had to be considered dangerously misleading and inadequate when the risk factor was so high.

“It is the very young children at risk. They do not have the ability to assess a hazard or potential hazard as does an older person. A number of traders have been profiting from the distribution of these goods,” he added.

Greenstar had earlier pleaded guilty to four representative charges relating to the supply of 217 units of four different toy-animal sets between November 2017 and February 2019.

The toys either contained squeakers which came out during testing, and/or were small enough to pass through a testing template. 

Three of the toy sets were labelled with symbols indicating the toy was not for children aged under three years, or wording such as “Warning: Choking Hazard: Small parts.  Not for children under 3 years”. 

Judge Blackie pointed out the age suitability indications were clearly inadequate and misleading. 

“The market for the toys, known to almost every New Zealander who has raised a family, is playthings for infants in the bath.”

Under the Fair Trading Act, the maximum penalty for a corporate is $600,000 per offence and $200,000 per offence for an individual.

ACC figures show that, between 2014 and 2019, there were at least 39 accident claims relating to children 36 months and under choking on toys.

The mandatory standard for toys covers items intended for use by children up to 36 months of age. 

It aims to reduce the risk of injury or death to young children by ensuring that toys intended for their use are not so small, or do not have parts so small, that they could be swallowed or ingested causing choking. The commission has now completed 24 product safety prosecutions (including for products other than toys) since the start of 2017, with fines totalling more than $1.5 million.

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