Business: Tampon Tussle

Fallout from the TSS shock

Cars, tires, soup and other items have been pulled off the market for reasons of consumer safety. But rarely, if ever, has an entire industry had to deal with the problem faced by the makers of tampons: a product that is widely used, worth tens of millions in sales and profits, and is now shadowed by concern about possible disease-causing properties.

The drama began in June, when researchers at the U.S. Center for Disease Control in Atlanta determined that a disorder called toxic shock syndrome (TSS) was related to women's use of tampons. In September Procter & Gamble's popular Rely tampon was identified as the brand most closely associated with the illness, and within days the company withdrew it from sale. Then some tampon makers voluntarily began running newspaper ads describing the health hazards linked with the product.

Last week the Food and Drug Administration proposed a caution that all tampon packages may soon have to carry. It says, "Warning: Tampons have been associated with toxic shock syndrome, a rare disease that can be fatal. You can almost entirely avoid the risk of getting this disease by not using tampons. You can reduce the risk by using tampons on and off during your period." Users are also urged to see a doctor if they develop a fever, vomiting or diarrhea during their periods.

Since 1975 there have been more than 400 reported cases of TSS, which is caused by the common Staphylococcus aureus bacterium and occurs primarily in menstruating women under 30. While fatalities have been few—only 40 have been recorded—the revelations about TSS disturbed tampon makers, who have built a market of 50 million regular users. First marketed in 1936 by Tampax, which had bought the patents for the product from the Colorado doctor who invented it, tampons are big business. All told, sanitary products account for roughly $800 million of the $10 billion spent each year on medical devices, and sales of tampons have pulled even with those of the older, clumsier napkins.

While Tampax, which makes only tampons, remains the industry leader, it has been pressed by four marketing giants that entered the field later: Procter & Gamble, Playtex, Kimberly-Clark, and Johnson & Johnson. The powerhouse among them was P&G. Armed with the marketing muscle it has as the nation's largest seller of bar soaps and shampoo, the company propelled its Rely brand to 20% of total tampon sales by last August.

It is an old retailing axiom that the company whose products command the most space on store shelves leads at the cash register, and giant P&G generally has more space than its rivals. The competitor that suffered most from P&G's push for Rely was Tampax, whose market share slid from 52% to 40% as Rely's grew. Playtex tampons, Kimberly-Clark's Kotex and Johnson & Johnson's o.b. also lost ground to Rely.