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Kmart agrees to improve toy safety procedures following a Commission investigation
Kmart has provided court enforceable undertakings to the Commerce Commission to improve its toy safety procedures, and in particular the test it applies when making age grading assessments for its home brand toys. This follows a Commission investigation into whether certain push along ‘Kids & Co’ fire engine toys, sold by Kmart, failed to comply with the mandatory product safety standard for toys for use by children 3 years of age or under.
Kmart sold the fire engine toys in New Zealand between January 2018 and January 2019. Kmart assessed the fire engine toys as suitable for children over the age of 3 years. As a result, Kmart labelled the fire engine toys as being suitable for children over the age of 3 years.
Having examined the nature, appearance, colours, size, shape and function of the toys, as well as seeking expert opinion, the Commission considered that the fire engine toys would also appeal to, and be able to be used by, children under the age of 3, and that Kmart ought to have taken steps to ensure the toys complied with the requirements of the Standard for that younger age range.
When tested in accordance with the Standard for that age range, the fire engine toys did not pass a test which aims to simulate possible damage that may occur to a toy when used by a small child. During the test, small parts may come free that present a choking and/or suffocation risk.
Kmart stopped selling the fire engine toys in New Zealand in January 2019 and later issued a voluntary product recall notice. There have been no injuries or complaints reported to Kmart in relation to the use of these fire engine toys in New Zealand.
To resolve the Commission’s investigation without any further enforcement action, Kmart has undertaken without any admission of liability to:
- not sell the fire engine toys or similar variants in New Zealand
- amend the test it applies when conducting age grade assessments
- improve its testing processes, including obtaining independent age grading assessments
- provide further training to its toy sourcing staff about age grading from an external provider
- undergo two annual audits of its compliance with the undertakings, and
- confirm that its suppliers are applying the correct legal test for age grading.
Commission Chair, Anna Rawlings said “Businesses selling toys in New Zealand must ask themselves the right question when age grading toys – whether, viewed objectively, it can be said that the toys were either manufactured, designed, labelled or marketed for use as playthings by children up to and including 36 months of age. Some toys appeal to children of many ages but toys which appeal to and can be used by children under the age of 3 must comply with the Standard, even if they are also appropriate for children over that age.”
“Businesses must undertake a proper assessment first, to determine whether the toys are subject to the Standard, and second, whether the toys meet the requirements of the Standard and are safe to sell for use by children aged 3 or under. Businesses cannot meet or avoid these obligations by marking or labelling toys as not suitable for children under 3 years,” said Ms Rawlings.
The undertakings can be found on our case register.
Regulations set safety standards that suppliers of goods must comply with. The regulations set out what type of goods are covered, what standard/s or parts of standard/s apply to New Zealand and any variations to those standard/s. Failure to comply with product safety standards set by regulations breaches the Fair Trading Act.
To reduce the risk of children injuring themselves by choking while playing with a toy, children’s toys falling under the Product Safety Standards (Children’s Toys) Regulations 2005 must be of a specified size and contain no small parts that break off easily and the battery compartment must not be easily accessible. The Regulations apply to toys manufactured, designed, labelled, or marketed for use by children up to and including 36 months of age. The Regulations adopt certain clauses of the Australian/New Zealand Standard entitled AS/NZS ISO 8124.1:2002 as the product safety standard for toys in New Zealand.
The relevant law
It is an offence under section 30 of the Fair Trading Act to supply, offer to supply, or advertise to supply toys for children up to 36 months of age that do not comply with the relevant mandatory product safety standard.
The undertakings are Court enforceable undertakings in terms of section 46A of the Fair Trading Act. The Commission publishes enforceable undertakings on its case register.
Breach of the Fair Trading Act
Only the courts can decide if there has been a breach of the Fair Trading Act and can impose penalties where it finds the law has been broken. A company that breaches the Fair Trading Act can be fined up to $600,000 and an individual up to $200,000 per offence.
Toy safety videos
- The Commission has released a set of three videos designed to help businesses, all of which can be found on the Children’s toys page of the Commission website, along with further guidance for businesses:
- ‘The story of a toy’ shows the potentially devastating impact of supplying an unsafe toy
- ‘Any doubts? Don’t sell’ gives guidance on the mandatory product safety standards, particularly that for toys for children 36 months and under
- the final video demonstrates the three tests that toys undergo to demonstrate they pass the mandatory standard.
- Baby City enforceable undertakings relating to safety standards compliance for cots
- Big Bear selling unsafe toys labelled “for ages 3 and up”
- Five prosecutions for unsafe toys where retailers had zero or inadequate compliance processes
- Two companies prosecuted for importing unsafe toys, with neither having a product safety compliance process.