If the development has cascading effect and more retailers pull J&J’s baby talc powder from shelves, it could significantly impact its earnings. Already J&J is facing lawsuits over allegations of asbestos in its talc.
Following U.S. healthcare conglomerate Johnson & Johnson’s recall of its baby powder, three major U.S. retailers, including Walmart, are removing all 22-ounce bottles of the company’s baby powder from their stores.
On Thursday, CVS Health Corp had stated it would remove the bottles from its online store as well. However, all other sizes of the talc powder would remain on its shelves.
On October 18, Rite Aid had informed its stores to pull “all 22-ounce bottles of Johnson’s Baby Powder from its shelves and store them in a secure location”, said Chris Savarese, the company’s spokesman. “Additionally, we’ve applied a point of sale system block for this product to prevent it from being sold.”
Incidentally Johnson & Johnson is facing thousands of lawsuits over a variety of products.
Last week, following U.S. health regulators finding traces of asbestos in samples taken from a bottle purchased online, the company said it was recalling nearly 33,000 bottles of baby powder in the United States.
The development assumes significance since this is the first time that Johnson & Johnson is recalling its iconic baby powder for possible asbestos contamination; it is also the first time U.S. regulators announced finding of asbestos in the product.
Asbestos is a known carcinogen that has been linked to deadly mesothelioma.
Johnson & Johnson has said, the voluntary recall was limited to one lot of its Baby Powder that was produced and shipped to the United States in 2018. The company went on to add, the FDA found no asbestos in its talc, after testing, as recently as a month ago.
“It’s not important at all in terms of the dollar figure to either CVS or J&J. What it tells you is that retailers are being extra cautious with how they are dealing with J&J’s voluntary recall,” said Jared Hol, an analyst with Jefferies healthcare.
Commenting on CVS’s move, J&J spokesman Ernie Knewitz said, “It’s temporary … They are doing it store-wide because they don’t have the resources to go through at the store level and check all the SKUs (stock keeping units), check all the lot numbers.”
According to Eric Schiffer, CEO of private equity firm Patriarch Organization, other retailers are expected to remove the product from their shelves as they will want to avoid liability,
He went on add, “It wouldn’t surprise me to see Amazon and other online retailers do the same”.
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