Americans don't want to pay more for safe products
WASHINGTON/NEW YORK, Aug 30 (Reuters) - The "made-in-China" scare has sparked toy recalls and U.S. Senate investigations, but getting America's bargain-minded masses to spend more for safety remains a tall order, experts said.
Only a small number of shoppers appear willing to part with more cash for safer products, and most consumers expect companies to absorb the costs of the tougher inspection regimes being recommended as a remedy to the product safety scares.
In the latest of a spate of cases, Toys "R" Us Inc said on Thursday it was recalling 27,000 wooden coloring cases that were made in China because lead was found in the printed ink on the art set's outer packaging and in some watercolor paints.
Tackling product safety problems will require a combination of tougher regulation of China's manufacturers, importer vigilance and more inspections.
"There needs to be independent pre-shipment testing and inspection of products prior to them arriving at a dock," said Donald Mays, a product safety expert at Consumers Union, the publisher of Consumer Reports, a U.S. journal.
Companies can call an outside lab or inspection company into the factory, said Mays, who used to work for Intertek, a London-based company that provided this service.
The process would cost about $200 to $250 per day for each of the several inspectors who would need about five days for each major shipment, he said.
"That initially might sound expensive but actually it's really a relatively inexpensive service to run," said Mays, who reckons the cost would be passed on to the consumer.
However, Linda Shea of the research and consulting firm Opinion Research Corp, which helps major U.S. companies manage their brands and reputations, said consumers will balk at paying for safety checks they assumed were already being done.
"I think it's really hard to pass it on to the consumer," she said. "I think you have to eat it."
BARGAIN HUNTERS
Ralph Keller said years of manufacturing machine parts in China taught him that Chinese factories were "under an awful lot of cost pressure and they view specifications and contracts as guidance."
"If you don't monitor it, and make sure that they're using the correct material, they'll substitute for something that's close," said Keller, president of the Association for Manufacturing Excellence.
When it comes to U.S. shoppers, Keller echoed Shea.
"If there are two items side by side, and the one made in China is 30 percent less, they're going to buy the one made in China," he said.
Britt Beemer, chairman of the consumer behavior survey outfit America's Research Group, said his polls have shown that Americans believe safety testing should be the responsibility of the manufacturer, but some would pay more if they had to.
"If you're talking about maybe a 10 percent higher price, they're willing to pay," he said.
But Beemer added that "when it comes to saving money, in the years that I've been doing research, I've never seen this many bargain-hunting consumers in my life."
Wal-Mart Stores Inc spokeswoman Melissa O'Brien told Reuters that "raising price is a last resort" and the retailer did not expect toy prices to change this holiday season.
Ohio State University business professor Oded Shenkar, an expert on China's economy, said U.S. consumers' willingness to pay more for safety might be "limited to things which in people's minds are linked to safety, such as pharmaceuticals."
Comments on the Consumer Reports safety blog indicate that "When you talk about safety of their children, people will pay a lot of money," Mays said.