The charges were laid under fair trading laws after it was found the small cars failed to meet product safety standard laws because the wheels could easily come off.
Just over 100 were returned during a later recall.
Hundreds of the toy cars are still thought to be in circulation, despite an earlier product recall. Photo / Commerce Commission
Judge Evangelos Thomas said during sentencing in the Auckland District Court that the company’s culpability was “highly careless”.
Three months before Allen Trading made the order, it was put on notice regarding standards applicable to a different product.
The brightly coloured toy car was “generously sized”, had no moving or opening parts other than the wheels, which were on a simple axle and could be easily detached.
They were sold in brown cardboard boxes, which contained a number of individual units that were not packaged or labelled.
The label on the box showed the toy was intended for children aged 3 and above, but it was accepted it would have been an appealing toy to many children younger than 3.
Judge Thomas said Allen Trading, which operated as a wholesaler, had no control over how the individual units were packaged or advertised for sale by a retailer.
He said when the company was told about the commission’s investigation, it triggered a recall that led to 138 of the toys being returned.
It was not known how many remained in circulation but it could be hundreds, Judge Thomas said.
He said while there had been no reports of a child having choked while playing with the toy they remained a risk.
In setting a sentencing starting point, Judge Thomas said they were products that carried the greatest risk of abuse, through being aimed at children and used over a long time, likely at times when a child was not being supervised.
“They are not simply rolled or pushed but they are thrown and kicked and stood on. There is a vital need for compliance as a result,” Judge Thomas said.
He said based on the company already being on notice with another product, Allen Trading did not have an adequate excuse.
Judge Thomas said while the two products were different, Allen Trading was aware the safety of children using its toys was something governed by strict safety standards.
The maximum fine on each charge was $600,000.
From the lowest possible starting point of a $200,000 fine, the company was given a 10% discount for its co-operation, the fact it had traded for some time and has responded responsibly and fully to the investigation.
Judge Thomas said in fining the company $28,000 on each charge there was nothing about the company’s circumstances that meant it should not pay the appropriate fine.
Allen Trading has not responded to NZME’s request for comment.
Tracy Neal is a Nelson-based Open Justice reporter at NZME. She was previously RNZ’s regional reporter in Nelson-Marlborough and has covered general news, including court and local government for the Nelson Mail.