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More Toy Safety Fines - Judge Says “substantially Higher Penalties” Justified

Two importers have been fined a total of $118,000 on toy safety charges, and a District Court Judge has said that “substantially higher penalties” are justified in such cases.

SDL Trading Limited was fined $64,000 in the Auckland District Court. It was SDL’s second such prosecution, after being fined $81,000 in March 2018.

Earlier, Greenstar Holdings Limited was fined $54,000 in the Manukau District Court.

Greenstar Holdings Limited
In his sentencing notes Judge Blackie in the Manukau District Court said Greenstar’s offending was “highly careless” and that sentences being imposed for other similar conduct “are not sending the message to importers, distributors and retailers.”

He said “[i]t 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.”

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.

Judge Blackie said “[w]ith 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.

In imposing the fine of $54,000 he noted the need for consistency with other District Court decisions. See the Background section below for recent similar cases.

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 the toys 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 0-3 years, or wording such as “Warning: Choking Hazard: Small parts. Not for children under 3 years”.

Judge Blackie said 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 … play things for infants in the bath.”

He said Greenstar “did not carry out any checks of its own to ensure compliance. It simply relied on a warning label” and the “warning must be considered as dangerously misleading and inadequate when the risk factor was so high."

SDL Trading Limited
SDL 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.

SDL supplied a total of 348 of the toys to various retailers between October 2017 and August 2018. It is not known how many were sold to the public.

During testing various parts came off the toys, including a ladder, side doors, and a firehose, and a small piece of plastic broke from one of the toys in one of the tests undertaken to assess compliance with applicable legal requirements.

In sentencing in the Auckland District Court on 28 August, Judge Paul said 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.”

Judge Paul said that despite some compliance efforts “there was not a critical review of the compliance regime undertaken” and those efforts “were woefully inadequate.”

For the Commission, Chair Anna Rawlings said “this is the second time the Commission has prosecuted SDL Trading for product safety issues. In March 2018 it was fined $81,000 for supplying an unsafe baby bath toy. Traders must take steps to learn about product safety standards and use a thorough process to assess the goods they are selling for compliance with those standards.”

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, its 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,” said Ms Rawlings.

Background
Recent cases
Recent toy safety prosecutions include:

Maximum penalties

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

Choking hazard

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

The mandatory standard for toys

covers toys 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.

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.

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