Consumer Defensive Stocks
In a consumer economy, consumers have many rights, including the right to demand redress for defective goods or services. To defend the interests of consumers, governmental bodies have established mechanisms for dealing with complaints. These include the Consumer Protection Agency (CPA) or the Office for Fair Trading (OFT). Consumer protection agencies are responsible for monitoring and enforcing laws and regulations relating to the sale of goods or services, the provision of information and the formation of contracts. In addition, they are tasked with protecting the health and safety of consumers.
The consumer protection law covers the sale of all types of goods or services, and it prohibits false advertising, phony sales and special offers with hidden conditions. It also sets out proper behavior in the collection of debts.
Moreover, consumer protection requires that professionals take the precautions necessary to ensure that products or services do not put consumers’ lives or health at risk. This includes carrying out tests, informing the consumer of any risks and providing a record of any accidents or injuries which have occurred as a result of the use of the product or service. In certain cases, a professional may even be liable for manslaughter or battery if a product or service causes death or injury to the consumer.
In France, the DGCCRF is in charge of enforcing consumer protection rules. This is accomplished through a network of national authorities in charge of consumer protection, implemented by the Regulation on European cooperation between authorities responsible for the enforcement of consumer protection laws. In addition, specific governmental decrees can set out detailed rules on specific sectors such as transport, insurance and environment.
Companies which produce or sell consumer staples, such as food, hygiene and cleaning products, drink and tobacco, are considered to be defensive stocks because people tend to purchase these items regardless of economic conditions. These stocks are generally able to generate steady cash flow and stable earnings, and they tend to outperform nondefensive or consumer cyclical stocks during periods of slow economic growth.
Consumer defensive stocks are also often dividend-paying and can provide investors with a source of income during periods of market volatility. One of the leading consumer defensive companies is The Procter & Gamble Company, which manufactures and distributes personal care, household, and health products.
The firm operates through the Beauty & Personal Care; Foods & Refreshment; and Home Care divisions. Its brand portfolio includes a number of well-known brands, such as Gillette, Oral B, and Olay. The company has a strong presence in the United States, as well as in Europe and Asia. Its diverse product offerings and global distribution capabilities allow it to serve a variety of customers, from individuals to large businesses. In addition, its robust research and development programs help the company stay ahead of the competition. The company has more than 100 manufacturing facilities worldwide. In fiscal 2013, the company generated revenue of $65.2 billion. The company also has a strong balance sheet and is profitable.
