There have been lots of talks going on about Johnson & Johnson’s (NYSE: JNJ) talc-based baby powder and lots of lawsuits have been filed stating that it causes to develop cancer because it contained asbestos. Recently the company had announced that it would discontinue the sales of the baby powder in the US as well as in Canada. However, of late it also announced that it would continue to sell its talc-based Johnson’s Baby Powder in the United Kingdom and other parts of the world.
In October 2019, the US based company recalled more than 30 thousand bottles of baby powder in the United States as the product was suspected of containing the harmful substance Asbestos, which as mentioned earlier is believed to cause cancer.
Johnson & Johnson, the US based company with international presence, specialises in consumer goods, and pharmaceutical and medical devices. The market capitalisation of the company was hovering at around USD 380 billion. The company has witnessed huge surge in demand for specific products in the US and Canada during the Covid-19 crisis. In March, as part of a portfolio assessment related to Covid-19, the company stopped shipping several items with low or weakened demand in the North American region. Another reason for restricting these product categories was to allow for appropriate social distancing in manufacturing and distribution facilities amid the deadly pandemic.
The American company has discontinued its talc-based Johnson’s Baby Powder as well as approximately 100 SKUs permanently in the US and Canada after the March assessment. However, the talc-based Johnson’s Baby Powder accounts for only 0.5 per cent in the US Consumer Health business overall.
The company saw a steep decline in demand for its talc-based Johnson’s Baby Powder in the North American region due to multiple reasons. The product received a lot of flak fuelled by a constant barrage of litigation advertising and misinformation around the safety of the product. Another reason for the reduced demand was the change in consumer behaviour and habits.
However, the company placed immense faith and confidence in the safety of talc-based Baby Powder, stating that it is well supported by scientific studies conducted by medical experts around the world. The company had previously, successfully defended its product and overturned various appeals against the unfounded allegations in the courtroom.
The unsold stock of the discontinued product would be available at existing channel partners until it is out of stock. However, the company would continue to promote Cornstarch-based Johnson’s Baby Powder in the US and Canada. Talc-based Johnson’s Baby Powder would be continued in other geographies across the world.
Recent Major Recalls in the UK Markets
Last month, major supermarkets in the United Kingdom recalled food items. WM Morrison Supermarkets Plc (LON: MRW) recalled some food products of Shana Foods Ltd on directives issued from the Food Standards Agency (FSA). In a similar fashion, earlier this month, WM Morrison Supermarkets recalled Market Street Living Herbs as they were believed to be containing Listeria monocytogenes which might lead to listeria related infections. The group, with the ticker symbol “MRW” last traded on LSE at GBX 181.75 on 22 May 2020, up by 0.64% or 1.15 points. It holds a market cap of £4,343.50 million.
In another instance, Tesco Plc (LON: TSCO) and Asda had to recall a food product which did not mention milk on its food label. People who are lactose intolerant might develop an allergy due to the product. The group, with the ticker symbol “TSCO” last traded on LSE at GBX 227.30 on 22 May 2020, up by 0.09% or 0.20 points. It holds a market cap of £22,241.03 million.
Marks & Spencer Group Plc (LON: MKS), the British supermarket chain, recently recalled its in house developed product, M&S Chicken Bites. According to FSA, the product contained egg, and did not mention it on the label. People allergic to egg might use the product. The group, with the ticker symbol “MKS” last traded on LSE at GBX 94.56 on 22 May 2020, down by 3.75% or 3.68 points. It holds a market cap of £1,915.74 million.
J Sainsbury Plc (LON: SBRY) along with other retailers, recalled a frozen lasagne item as they doubted that the product has metal shavings. The group, with the ticker symbol “SBRY” last traded on LSE at GBX 183.15 on 22 May 2020, down by 0.49% or 0.90 points. It holds a market cap of £4,083.54 million.
Consumer goods company, Unilever Plc (LON: ULVR) suspected metal pieces in its multi-packs of Wall’s Mini Calippo (Orange and Lemon-Lime). As per FSA, the company has recalled the batch. The company also displayed notices on POS (Point of Sale) terminals explaining the recall of the product. The group, with the ticker symbol “ULVR” last traded on LSE at GBX 4,115 on 22 May 2020, down by 0.22% or 9.00 points. It holds a market cap of £48,190.20 million.
Unilever UK Ltd has also recalled some batches of its ice cream products as milk being a prime constituent was not mentioned on the label in English, which might have posed a health risk for a lactose intolerant person. The company urged the people who bought the product to avoid consumption and contact the company through telephone or email.
As people remain confined to their homes, they are hugely dependent on processed foods. The product recall by the companies during these unprecedented times seems to be a good gesture. The supermarkets in the United Kingdom seem to be in the money amid the coronavirus crisis. The retailer stores were minting money during the unprecedented crisis as they witnessed panic buying and stockpiling by the consumers. The companies could operate in these unprecedented times to keep an undisrupted supply of the essentials for the people.
There was a huge demand for toilet paper, processed food items and cleaning products such a Dettol and hand sanitisers. The supermarkets had to put limit orders on specific food items so that they could be made available to everyone. Meanwhile, some supermarkets were also accused of profiteering, as they deliberately hiked the prices of products in demand.
While most of the other sectors were axing jobs, the supermarkets went on a hiring spree to cater to a huge surge in demand. The newly hired workers were used to bolster the delivery network as the companies had witnessed a huge rise in its virtual queues.
As the nation prepares for easing lockdown, supermarkets are likely to operate with enhanced safety protocols and social distancing measures in place. It is important to note that these groups have played a pivotal role in making the lockdown a success.
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