123 Mart fined $337,000 for selling unsafe products

Commerce Commission warns all retailers

Wellington, October 13, 2017
The Commerce Commission is urging importers, distributors and retailers to ensure that the products they sell comply with all relevant mandatory product safety standards and consumer information standards.
The safety standards cover products, including toys and children’s nightwear, that have the potential to cause serious injury. The consumer information standards require that clothing is labelled with origin and fabric care details.
The Commission’s call follows the conviction and $337,000 fine imposed today against low-cost retailer The 123 Mart Limited (123 Mart). It was prosecuted by the Commission for selling approximately (a) 9000 units of seven types of toys that did not comply with the safety standard for children’s toys and were unsafe for children aged 36 months and under (b) 1200 items of children’s sleeping pants, which did not have the required fire danger labels (c) 11,000 items of clothing, which failed to comply with consumer information labelling requirements for care, origin and content.

Hazards to children

Toys fail to comply with the standard and are unsafe if they have small parts that present choking hazards for young children, or parts which might break off during reasonably foreseeable handling and become a choking hazard.
Commerce Commission Head of Investigations Ritchie Hutton said, “With Christmas approaching, the Commission urges toy importers, distributors and retailers to ensure that the products they sell comply with all of the mandatory standards and most importantly, are safe for use by young children,” said Ritchie Hutton, the Commission’s Head of Investigations. In sentencing today in the Auckland District Court, Judge Rob Ronayne noted that 123 Mart was twice warned by the Commission and even after prosecution commenced it continued to offend and lied as a cover-up. Its behaviour had been cavalier and brazen.
“It is important that where babies and children are concerned the product safety standards are complied with; choking hazards in this case exposed young children to the risk of injury or even death. The lack of any known harm was fortuitous.”
Company liquidated
During the charge period 123 Mart operated approximately 60 retail stores throughout New Zealand under four different brands: The 123 Mart, Dollar Store 123, King Dollar Store and Max!Out.
In late September, 123 Mart went into liquidation and Judge Ronayne said he did not know if there will eventually be an ability to pay the fine imposed, “but it is appropriate to send the right message in this case.”
The prosecution arose from the Commission’s programme of unannounced visits to retail stores, and further investigations and litigation are underway.
“Product safety is an enduring priority for the Commission and our current investigations are likely to result in prosecutions. The aim of this work is awareness and deterrence. We want to make importers, distributors and retailers aware of the standards they must comply with, and aware of the consequences of not doing so,” Mr Hutton said.
In July, 123 Mart was found guilty in the Auckland District Court on 17 charges under the Fair-Trading Act for supplying unsafe toys. During the July hearing 123 Mart pleaded guilty to five charges relating to children’s sleeping pants and clothing which failed to comply with labelling requirements for care, origin and content.
There are currently six product safety standard regulations:

baby walkers

children’s nightwear

children’s toys

cigarette lighters

household cots

pedal bicycles

There are five consumer information standards regulations:

Care labelling

Clothing and footwear country of origin labelling

Fibre content labelling

Used motor vehicles

Water Efficiency Labelling Scheme (WELS)

You can access the regulations and the Fair-Trading Act online at www.legislation.govt.nz. The regulations identify the standard that suppliers must comply with.
The standards referred to in the regulations are available for purchase from Standards New Zealand by calling 0800 STANDARDS (0800 782 632) or via its website
Product recalls
During the course of the Commission’s investigation 123 Mart voluntarily withdrawn various toys and clothing from sale. The recall notices with photos can be seen on the Product Recalls website by searching for 123 Mart.



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