Toymakers Assail Costs of New Law
Sunday, December 21, 2008
Selecta, a German toymaker, carves whimsical cars and characters from native woods, colors them with vegetable dyes and coats them in silky beeswax. No lead, no toxic varnishes. Not even waste -- the company heats its factory with leftover woodchips. Just the kind of toymaker in demand after scares about tainted playthings from China.
But this holiday season, Selecta is preparing to pull out of the U.S. market. Its problem, executives say, is consumer legislation that is adding crushing costs to selling toys in America.
The law, which takes effect Feb. 10, was passed by Congress in response to recalls of lead-laced toys and growing health concerns about chemicals in plastics. The $22 billion toy industry says the requirements have created confusing bureaucratic layers and startling new costs that will decimate a business already struggling through a punishing recession.
For the first time, manufacturers will have to pay independent testing laboratories to verify that every component of a product meets new limits for lead and does not contain six chemicals that Congress has banned from plastic children's products.
Learning Resources, an Illinois manufacturer of educational toys, says one lab wants $24,000 to test a certain model of children's telescopes. Many companies say that the law does not spell out exactly what must be tested and that the uncertainty is creating havoc with business plans.
Manufacturers say the law will have unintended consequences: halting the sale of kids' bicycles, requiring clothingmakers to discard millions of dollars in inventory, and banning products that pose little or no safety threat.
"This business is being ruined, and it has nothing to do with safety," said Rick Woldenberg, chairman of Learning Resources. "It has to do with mania."
Consumer advocates say the law offers needed protection. "There's no unfettered right to sell your products if you can't prove they're safe," said Rachel Weintraub of the Consumer Federation of America.
Toys on shelves now are a mix; some would meet the new safety regulations, others would not. Some large retailers, such as Wal-Mart and Toys R Us, are requiring suppliers to comply with the new requirements ahead of their effective date. But other stores are selling old stock this holiday season, sometimes at a discount, to shed inventory before the law takes effect. Shoppers concerned about lead and chemicals should ask retailers or manufacturers about the contents of their products, experts say.
While toy giants such as Hasbro and Mattel began changing their materials even before the law was passed, some owners of medium and small businesses say they do not have the time -- or the money -- to comply with the tough new provisions.
Backers of the new law say the toy industry had plenty of warning that government was making safety regulations tougher. California, which has the largest state economy and often sets trends because of its market muscle, approved a toy safety overhaul similar to the federal legislation in 2007. That ban takes effect next month.
Lead, a neurotoxin that can injure the brain, reduce IQ and cause behavioral problems in young children, has been banned from paint in the United States since 1978.