Candellini, Inc., Candle Manufacturing Company:

Profits, Pollution, and Consumer protection

The Case
You are a junior manager at Candellini, Inc., a large, publicly traded company that manufactures candles. Candellini is facing a number of choices and requires your input.

Candelllini’s candles are made mostly of paraffin, which releases benzene and toluene when burned. These compounds are absorbed by those who inhale them and remain in the body.

A growing body of anecdotal literature suggests that these chemicals are linked to liver cancer in people. The American Lung Association has issued warnings about unhealthy indoor air quality from burning paraffin candles. Swiss scientists recently found that exposure to airborne benzene or toluene-–the equivalent of burning three Candellini candles–significantly elevates liver cancer risks in mice.

The Consumer Protection Safety Commission (CPSC), the federal agency responsible for regulating harmful chemicals in consumer products in the United States, however, has not banned paraffin candles or required companies that make them to put warning labels on packages.

However, consumer groups are petitioning the CPSC to take action. Other public interest groups are encouraging consumers to stay away from paraffin products because, as a byproduct of the petroleum industry, it contributes to our dependence on crude oil.

You predict that the CPSC will require Candellini to reduce candle toxins within the next 3-7 years. At the same time, public interest groups pressure could lead to increased consumer demand for less toxic candles over the next 3-7 years.

The problem is that paraffin candles are cheap to make. Candellini’s business model has always been based on high volume sales at low prices. The company employs thousands of people and needs to make a profit. The economy has been slow and sales are down this year.

The company needs to decide whether to stick with its existing formula or invest the money to change it. The most expensive option would be to use some proportion of beeswax. Burning beeswax produces no known toxins.

Another option would be to replace the paraffin with soy-based wax, which has no toluene or benzene. Soy wax is more expensive than paraffin, but cheaper than beeswax. Candellini could mix soy with paraffin. The greater the ratio of soy to paraffin, the less toluene and benzene released, but the more expensive it is to make.

Soy wax, does, however, release pesticides when burned. The cheapest soy wax, which is imported from Indonesia, is laced with dangerous pesticides that are prohibited in the U.S.. Human rights groups report that pesticides used to grow soy there enter the water supply and may cause leukemia in local children. American soy wax, on the other hand, is more expensive but has fewer pesticides.

However, Candellini could probably get away with using Indonesian soy wax in its candles for years to come without anyone asking questions because the issue of pesticides in candles is not on the radar screens of the CPCS or any consumer group here.

Your brother runs a well-regarded engineering consulting company that could advise Candellini on how to alter the composition of its candles. You own a minority stake in your brother’s company. Both of you would make a lot of money if Candellini hired your brother’s company.

Questions

Write a five to six page double-spaced essay addressing the following questions. For every issue raised, be sure always to refer to your textbook, reading materials, and class discussions. Incorporate the model steps for resolving ethical dilemmas and the ethical theories that you studied. Also incorporate your own personal experience.

(a) Referring to the ethical theories that you have studied, what should Candellini do about the potential hazards of benzene and toluene? What pressures do you and Candelllini face as you decide what to do? Should Candellini make a change in its candle ingredients? How would Candellini’s decisions affect different people/entites? Describe the short and long term effects of Candellini’s various choices on as many affected people/entites as you can. What questions should you ask yourself as you decide what to do? How would you answer each of these questions?

If you decide that Candellini should change its ingredients, based on what principles should you select your new ingredients? Would you choose beeswax or Indonesian soy wax or American soy wax? Why? How should you decide the ratio of the mix? What questions would you ask yourself to decide this? Refer to the ethical theories you studied in class, your book, and readings.

(b) If you decided that Candellini should not alter its candle ingredients, explain why. Should Candellini at least put a label on its candles to warn consumers of the toxins released? If so, what should the labels say?

(c) Should you suggest to your boss that Candellini retain your brother’s consulting company? What pressures would you face that might cloud your judgment? Should you disclose your stake in your brother’s company to your boss? Who/what entities would be affected if you decided to retain your brother’s company without telling your boss about your stake in his company? How would these people/entities be affected in the short term and the long term? What questions should you ask yourself as you decide whether to disclose your stake in your brother’s company and suggest that Candellini hire your brother’s company? Be sure to identify the kinds of issue you face and to refer to the ethical theories and methods of resolving ethical dilemmas that you studied in your textbook and in class.

 

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