Colgate Total in spotlight amid triclosan concerns

New research indicating that products containing bacteria-fighting triclosan could expose consumers to a probable human carcinogen is bringing attention to Colgate-Palmolive Co., as its Colgate Total toothpaste contains triclosan.

Researchers at Virginia Tech found that the use of antimicrobial soaps and other products may expose people to significant quantities of chloroform. When triclosan, found in many antimicrobial soaps, reacts with chlorine found in tap water, chloroform is produced. The Environmental Protection Agency classifies chloroform as a probable human carcinogen.

The study, reported this month in the online edition of Environmental Science & Technology, dealt with triclosan in dishwashing soaps, not Colgate Total.

In a statement for the American Dental Association, New York-based Colgate said the "research did not involve toothpaste in any way and its conclusions have no applicability to Colgate Total. Triclosan-containing toothpaste would not generate chloroform when used to brush teeth."

A report late last week said that British retailer Marks & Spencer was pulling Colgate Total from its shelves due to the study about triclosan. An analyst said the report was erroneous.

"Marks & Spencer only carries own-label household & personal care products, i.e. it does not sell Colgate products. Thus, it is impossible for the retailer to have removed Colgate Total from its shelves. We have confirmed this fact with Marks & Spencer as well as with Colgate," CSFB analyst Lauren Lieberman said in a note to clients earlier this week.

Earlier this week, the China Daily newspaper reported that China is investigating the safety of such products.

"We believe that Colgate's stock has further headline risk due to recent headlines associating Colgate Total toothpaste with cancer," said William Chappell, SunTrust Robinson Humphrey, who has a "buy" rating on the shares.

Chappell said Colgate is sending Chief Operating Officer Ian Cook "to China next week to hold a forum and address concerns. In our opinion, this clearly implies that the issue has grown in magnitude during the past few days," he said in a research note.

Chappell said that he does not expect the news to have "a significant impact on near-term results" at Colgate.

Lieberman, who rates Colgate "outperform," said toothpaste accounts for about 25 percent of Colgate's sales in the United States and the United Kingdom. She estimated that Total is 40 percent to 45 percent of that volume, or 10 percent of Colgate's sales in each of those regions.