Two Recalls Dampen Holiday Cheer

enfamil infant formula recallThis is the time of year when retailers can't seem to move product out of their stores fast enough, but now we have Target (TGT) and Walmart (WMT) scrambling to get some of their merchandise back.

The country's two largest discount department store chains have issued product recalls this week.

Walmart's situation is the graver of the two. A 10-day-old baby died from a rare bacterial infection in Missouri, and it may have been the result of Mead Johnson Nutrition's (MJN) Enfamil sold at Walmart.

The retailer is pulling the infant formula batch with the problematic lot number as investigators determine whether the Enfamil powder, the water used to mix the formula, or something else led to the infant's tragic death.

There's obviously a fair chance that the formula itself had nothing to do with the baby's passing, and even if it is the case, it will be Mead Johnson Nutrition taking the real hit here. Shares of Mead Johnson were trading as much as 12% lower today on the news.

Target's recall involves excessive levels of lead paint in a kids travel case, but there have been no reports of any children getting sick. Target sold 139,000 of the Circo travel cases between April and August of this year, and the retailer is initiating a recall of the Chinese-made products because the surface coating on the cases exceed the federal lead paint standard.

Recalls happen all the time, and the real challenge is simply getting the word out. How many of those 139,000 buyers will ever know that their kids are toting around a travel case coated in excessive lead paint?

Retail isn't perfect, especially now, during the madcap holiday shopping season.

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At the time this article was published The Motley Fool owns shares of Wal-Mart Stores. Motley Fool newsletter services have recommended buying shares of Wal-Mart Stores as well as creating a diagonal call position in Wal-Mart Stores. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

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Dan

As @Bury1of6, Buy American made product's...................At what point will corporations view the cost difference, and the (Name Recognition/Goodwill for consumers). Once enough issues are realized, you can't cut the cost enough to get a consumer to get a second or perhaps a 3rd chance. China is well aware, (I am sure) of the quality of product manufacturing for American Companies) but choose to take their own path. Not all Chinese companies go into this pot, but even a few are a few too many (especially when it is a Child's product).. Wake Up Execs.

December 27 2011 at 9:52 AM Report abuse rate up rate down Reply
bury1of6

I have a better idea, Buy made in America! Shop at the local Mom & Pop stores, stay away from Big Retail Chains.
They buy cheap from China & mark the Hell out of the Prices & you think your getting a bargain. Some bargain, Poison your Children with products that are not properly Safety tested from our Enemies ( remember Red China is no Friend of ours), they bleed our hard earned money to support their Blue Water Navy. People wake up support products made in America, that's how we will come out of this Prolonged Recession, still 10's of millions in the US of A w/o a job, or Presents for their Families. How many deaf ears will this fall upon? I'm neither a Dem or Rep., just someone that wonders how is this Nation going to pay back the Trillions of Dollars in Debt to the World?
I have yet to hear 1 Dem or Rep. tell us HOW. Have a Merry XMAS & a Happy New Year! Are your Presents Made in the US of A?

December 23 2011 at 11:28 PM Report abuse +1 rate up rate down Reply
zackchem

Does a retailer like Target has a quality control inspection group?. In today's age this is unacceptable especially since the US banned lead containing paints in the early 1970's. This is inexcusable and the industry should bann all products made in China until China gets it's act together on lead. Shame on them.!

December 23 2011 at 3:35 PM Report abuse +2 rate up rate down Reply