Wen/Reporter Hu Yan from Yangcheng Evening News
Procter&Gamble recently announced that due to packaging defects, it will recall approximately 8.26 million bags of Procter&Gamble's laundry products in the North American market, including Tide and other brands sold in the United States and Canada. The production time of the products will be from September 2023 to February 2024. The reporter visited some supermarkets in Guangzhou and found that the relevant brand products on the shelves are all Chinese products. Procter&Gamble customer service told reporters that all Procter&Gamble washing products in China are produced and sold in China, with reliable quality.
Under the weak market situation, Procter&Gamble Group's Q1 2024 financial report (natural year: July September 2023) showed a 12% year-on-year decline in net profit attributable to shareholders, marking the first double-digit decline in net profit in nearly five years. In addition, the potential market growth rate in the Greater China region has dropped to the median to high single digits, and consumer confidence needs to be revitalized.
Laundry products will be recalled in the North American market
On April 5 local time, P&G announced that due to packaging defects, it would recall about 8.26 million bags of P&G's laundry beads and other products in the United States and Canada, including Tide laundry balls, Gain laundry powder bags, Ace laundry balls and Ariel laundry balls. The products were produced from September 2023 to February 2024 and sold through major retailers such as Wal Mart, Target, CVS and Amazon. According to statistics, approximately 8.2 million bags were sold in the United States and over 56700 bags were sold in Canada.
According to notices issued by Procter&Gamble and product safety regulatory agencies in the United States and Canada, the reason for the recall is due to issues with the child safety packaging of laundry products. According to reports, the outer packaging may crack near the zipper track, exposing children to detergent chemicals, which can lead to seizures, coma, severe respiratory disorders, eye damage, and burns.
Although there have been no confirmed cases of injury directly related to the defect so far, Procter&Gamble and the US Consumer Product Safety Commission have stated that during the sales of recalled batches of products, they have received four reports of children coming into contact with laundry detergent in the United States, including three cases of accidental ingestion. It is uncertain whether the laundry detergent bags in these reports truly belong to the recall batch.
This recall involves products with different odors and sizes. The official website of Procter&Gamble shows that consumers can verify whether their products need to be recalled by submitting photos of product barcodes and batch numbers on the corresponding website.
For consumers who have already purchased recalled products, Procter&Gamble suggests that consumers should immediately place the products out of reach and sight of children, and contact Procter&Gamble's Cincinnati headquarters to obtain a full refund, as well as a free replacement of children's safety bags used for storing detergents. Consumers can also receive a cabinet lock to protect laundry products. The detergent itself can still be safely used for laundry purposes.
The reporter called the official phone number of Procter&Gamble China responsible for Tide, Blue Wave, and Donnie's business, and customer service personnel responded that Procter&Gamble's washing products in China are all produced and sold in China, and the products meet national standards with reliable quality.
Subsequently, the reporter visited some supermarkets in Guangzhou and found that the shelves were mainly filled with Chinese versions of washing products from brands such as Tide. The salesperson told the reporter that most supermarkets only sell this type of product in China.
The reporter noticed that currently, some overseas e-commerce stores continue to sell bagged American imported Tide laundry beads on e-commerce platforms. When asked about the production date, the customer service of the store stated that laundry products, as daily necessities, do not have specific production date and shelf life information on the packaging, only the product code.
Procter&Gamble stated that it is making every effort to handle this recall incident and ensure the safety of consumers. At the same time, consumers are urged to remain vigilant and follow relevant safety guidelines.
Laundry beads have become a major disaster area for accidental ingestion
Procter&Gamble is one of the earliest consumer goods companies established in Ohio, USA. The company has since grown and began researching and developing laundry beads in the 1990s. In 2013, the company introduced laundry beads to the Chinese market.
As soon as it entered the market, laundry beads almost overnight became popular worldwide, and the laundry bead market in China also rapidly expanded. According to a report released by Zhiyan Consulting, the market size of laundry beads in China has increased from 24 million yuan in 2015 to 2.672 billion yuan in 2022. The compact, beautiful, convenient and efficient nature of laundry beads has captured a large number of consumers. Next, brands under Procter&Gamble, such as Tide, will face fierce competition in this segment, not only from other international brands, but also from local brands represented by Libai, as well as domestic emerging brands popular on e-commerce platforms, such as the sudden rise of vegetable and fruit orchards last year.
But being easily ingested has also become a fatal flaw of laundry beads. This recall incident once again reminds consumers of the importance of child safety issues related to products, especially those related to home cleaning products. According to reports, experts warn that children are more likely to accidentally consume laundry detergent packaging as they may confuse these products with candy. Experts urge consumers to store washing products in a safe manner.
In addition, ingesting chemicals in detergents can cause serious health hazards, including vomiting, diarrhea, liver and kidney damage, and may even be fatal. These health risk events have long been well documented. Around 2017 and 2018, young people in North America initiated an online event called "Tide Challenge" and posted photos and videos of the competition eating laundry balls on social media, resulting in many incidents of young people being sent to the hospital.
In 2012, Tide launched its laundry ball product. Since then, there have been many incidents of accidental consumption of Tide laundry balls in the United States. As a result, Tide has been coating the outer packaging with bitter substances since 2015, but it still cannot stop some crazy consumers. In 2018, there were 39 cases of laundry ball poisoning in the first two weeks alone.
The reporter searched social media platforms such as Xiaohongshu and found that there are also many consumers in China who have ingested food by mistake, not only for infants and young children, but even cases of being sent for gastric lavage. This severely affected area of ingestion requires joint efforts from all sectors of society to solve. Dr. Xie Jingying from Guangzhou Women and Children's Medical Center stated that taking some laundry clots, if treated promptly, is generally not dangerous. If not treated promptly according to medical advice, it may irritate the gastric mucosa, causing symptoms such as abdominal pain, nausea, and vomiting, and in severe cases, it can lead to gastric ulcers. Some patients may also experience toxic reactions.
Proactively recalled multiple wash and care products under its umbrella
In 2021, multiple products under Procter&Gamble, including Pantene, were tested for the carcinogen benzene. Procter&Gamble Group announced that it is actively recalling multiple spray type cleaning products from four brands, including Pantene, produced in the United States. The recalled products include Pantene, Phytophilia, Australian silk kangaroo and some dry hair spray products of Waterless.
Procter&Gamble stated that daily exposure to the detected levels of benzene in products is not expected to have a negative impact on health. But due to cautious considerations, a recall is currently underway.
Benzene is an organic compound that can cause cancer when humans and animals come into contact with it through respiration, oral administration, and skin contact. It is classified as a carcinogen by the International Agency for Research on Cancer of the World Health Organization.
At that time, P&G's official microblog in China said that the dry hair spray products recalled by P&G in the North American market were only limited to some batches produced in North America. China does not import the above products. "All hair care products produced and sold in the Chinese market comply with relevant national regulations and standards, with reliable quality, safety, and reliability. Please use them with confidence."
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Second quarter net profit of Procter&Gamble Group
First occurrence of double-digit decline
In 2023, consumer goods giant Procter&Gamble Group recorded a record high of 83.89 billion US dollars (approximately 604.327 billion yuan) in revenue. However, the Q1 (natural year: July September 2023) financial report of Procter&Gamble Group released recently showed that its net sales in the second quarter of the 2024 fiscal year were 21.441 billion US dollars (approximately 153.83 billion RMB), a year-on-year increase of 3%; The net profit attributable to the parent company decreased by 12% year-on-year to 3.468 billion US dollars (approximately 24.88 billion yuan).
The group achieved a slight increase in net sales in the second quarter of fiscal year 2024, but compared to the performance of the second quarter in the past five years, the current net profit attributable to shareholders was at its lowest level, marking the first time a double-digit decline in net profit has occurred.
In response, the financial report analyzed that "non cash expenses damaged the book value of the intangible assets of the Gillette trademark, as well as an increase in non core restructuring expenses.". In fact, as early as December 2023, Procter&Gamble issued a statement stating that it plans to allocate $2 billion to $2.5 billion for the restructuring and impairment of certain businesses, of which $1.3 billion is planned for pre tax non cash impairment expenses of the Gillette brand.
Procter&Gamble's CFO, Andre Schulten, stated that although the potential market growth rate in Greater China has declined to the median to high single digits due to weakened consumer confidence, the company remains optimistic about the medium to long-term development potential of the Chinese market, mainly considering opportunities such as the size of the Chinese potential market, the potential development of the middle class, and the development space of Procter&Gamble's product penetration rate.
In recent years, daily chemical companies have generally experienced profit setbacks, and many companies have taken strengthening online marketing as a lifeline. In order to reduce costs and regulate efficiency, Procter&Gamble has adjusted many of its brands and factories, and stated in a financial report for the 2021 fiscal year that Procter&Gamble's future marketing budget allocation and product packaging ideas will be closer to online.
As of the time of publication, Procter&Gamble's stock price rose 0.42% to $156.10 per share, with a total market value of $367.3 billion (approximately RMB 2657 billion). It is expected that on April 19th, Procter&Gamble will disclose its third quarter report for the 2023 fiscal year before the (US East) trading session.