It looks like China's answer to sending us contaminated toothpaste, tainted ingredients that Baxter (NYSE: BAX ) eventually made into heparin, and toys with lead paint on them sold by RC2 (Nasdaq: RCRC ) and Mattel (NYSE: MAT ) , is to respond with a childish, "I'm rubber, you're glue; everything bounces off of me and sticks to you."
This week, China's Food and Drug Administration said that it's investigating products made by our beloved Johnson & Johnson (NYSE: JNJ ) , after a U.S. group reported that there may be carcinogens in J&J's baby shampoo. Big deal? Frankly, no.
You see, carcinogens are everywhere. Some are manmade, but there are also natural carcinogens in the food we eat: broccoli, nutmeg, peaches, and radishes, for instance. (Kids around the world rejoice: No more broccoli!) You'll even find them in tasty drinks. It's the concentration that's important -- in this case, size (or amount) does matter. Johnson & Johnson reports that there are just "trace levels" in the shampoo.
I can see how China might be on edge after finding toxic melamine in baby formula, but this seems a little blown out of proportion. I'd liken it to biotech corn ending up in Kellogg (NYSE: K ) cereal and Yum! Brands' (NYSE: YUM ) Taco Bell tacos. It's highly unlikely that the shampoo will hurt anyone, but it's still a public relations nightmare.
Johnson & Johnson handled the Tylenol contamination in the 1980s -- which wasn't the company's fault -- quite well. But for minor public relation issues, it's had a few missteps recently. It sued the beloved Red Cross because it uses the same trademark, and its Motrin-moms advertising campaign created enough of a negative reaction that it had to pull the ad. Those public relation blunders don't get you very high marks with consumers.
And that should be the big worry here for investors. Not that the shampoo is contaminated, but that merely hearing the word "cancer" will be enough to cause consumers in China and the U.S. to look elsewhere. Johnson & Johnson needs to nip this one in the bud, pronto.
Lather, rinse, repeat to further Foolishness: