McDonald’s Recalls 12 Million “Shrek” Glasses

McDonald’s (NYSE: MCD) describes its collaboration with the producers of the animated “Shrek” movie, which appeals to youngsters, as a way “to encourage kids around the world to make balanced eating choices. ” It is also part of the largest fast food chains “commitment to responsible marketing for children.”

The image McDonald’s is trying to promote with the program was shattered by news that it will have to recall 12 million “Shrek” glasses, which have been tainted by the toxic metal cadmium. According to the AP, “The U.S. Consumer Product Safety Commission, which announced the voluntary recall early Friday, warned consumers to immediately stop using the glasses; McDonald’s said it would post instructions on its website next week regarding refunds.”  The metal can cause weakening of bones and kidney problems.

If the problem causes a strong negative reaction by consumers and a government probe, its  impact could rival the 2007 Mattel lead toy recall.Mattel had to deal with the fallout of its recall of nine million toys made in China.  It eventually had to pay The Consumer Product Safety Commission a fine of $2.3 million. The negative press from the incident cost Mattel far more than that.

McDonald’s has made a business of joint ventures between popular children’s films and product promotions in its stores. The programs bring in millions of kids and McDonald’s in many cases sells them promotional items based on characters and themes from films.

It is clear now that the promotions have a risk. They often involve manufacturing items that McDonald’s does not use in its daily food preparation. If the fallout from the “Shrek” product recall is great enough, the companies entertainment joint venture days may be over.

Douglas A. McIntyre

Sponsor: 3 Recovery Stocks to Own Now – Get the names of the best cheap stocks to rebuild your wealth in 2010 and beyond.