The “Little Guy” Strikes Back:

Solutions and Concerns About the Future of the Toy Industry

Since last year’s recalls and the ensuing scrutiny by the media and general public, many toy manufacturers, retailers, and distributors have had to take a new look at the definition of “toy safety.” This is an ongoing process, and one sure to result in legislation with varying levels of success. Who better to address how this situation has impacted the industry than people who make their livings from the industry – SafeToys.com consulted with representatives from small-scale toy companies to gain perspective on how new proposed legislation would affect the “little guy” and to hear suggestions about how to handle the new need for better safety standards.

“We received a large number of calls and emails [last year] asking us where our products were made, and if they were safe,” said Debbie Butera, co-owner, MonkeyBean Toys (http://www.monkeybeantoys.com). The company’s toys are made all over the world, so it contacted every vendor to request safety statements from them, which have been posted on the company’s Web site. MonkeyBean Toys also rented an XRF (X-Ray Fluorescence) Metal Analyzer and hired a consultant to help screen its Chinese-made wooden toy inventory for lead. “While we believed our vendors, we thought that going through that extra step could maybe help to alleviate some of the fears and concerns that our customers were having,” said Butera. Everything on the site tested negative for lead.

Before last year’s recalls, toys were assumed to be safe by both consumers and some manufacturers, according to Mike Rainville, president, Maple Landmark Woodcraft (http://www.maplelandmark.com). But now, it is a primary concern and is no longer taken for granted. “We have had to look at safety from a deeper perspective. It is no longer enough to meet federal and industry safety standards; our customers have concerns beyond that,” said Rainville. “We are introducing new product and changing some older product to meet consumers’ changing expectations.”

Holgate Toys (http://www.holgatetoy.com), which has safety tested its toys for years using an independent testing laboratory in the United States, was prepared for questions from the public. “We have always been on top of toy testing so nothing has changed with our way of doing business,” said Richard Bly, president, Holgate Toys. He also said the company continually tests new toys as and tests the finishes used on them. “Holgate has used the same paint supplier for 20 years, a family-owned business that has been in the paint finish business for more than 75 years. We know the suppliers we work with, require them to provide safety data sheets from the chemical companies they work with, and continually test their product at random,” he said.

Still, last year’s crisis has raised questions about long-term solutions. For example, what is the responsibility of the large toy manufacturers?

“I think the ‘mega’ toymakers/manufacturers, especially, need to put in procedures that help them confirm that their toys are manufactured correctly and conforming to the standards set by the U.S. and/or E.U. to protect our children,” said Butera. “There needs to be more communication between the toy companies and their production partners abroad, etc. It seems that there was a breakdown in the ‘checks and balances’ and they lost sight of what was actually happening. I feel that parents have a right to know that when they purchase a toy for their child, that it is safe. I don’t believe there should be any doubt.”

Rainville said the problem is not the standards themselves, but the toy industry’s inability to meet those standards. “Short of massive increases in testing requirements, it is rather difficult to assure piece-by-piece compliance, especially when foreign supply chains are subject to corruption,” he said. “That is a systems breakdown, not a standards problem,” he said.

The problems stem from large toy companies having products made in China, said Bly. “Although some of these factories in China were ISO certified, there appears to be a huge problem of toys that have been imported in the U.S. during the past 10 years or longer that went undetected at the U.S. custom borders.”

For Bly, while the federal government is looking to re-write toy safety standards, the concern is that these new regulations will negatively impact small U.S. toy manufacturers. “It may cost thousands and thousands of more dollars per year to test because of the problems that these large national companies have exposed to the U.S. consumer. And these large companies have another advantage, they test their product overseas, thus costing considerably less. I don’t believe this is fair for small U.S. companies,” he said.

Butera believes the big toy companies should do all testing here in the States and should make sure their products are safe before shipping to retailers. “I still have a hard time wrapping my head around the fact that so many millions of lead-tainted toys made it to the shelves last year (and how many years prior?). It was a horrible fiasco for the Toy Industry as a whole. Hopefully a lot of lessons will be learned,” she said.

Rainville’s company is also concerned that any solutions will disproportionately impact smaller manufacturers, “especially domestic manufacturers that already have an extremely high cost structure,” he said, adding that domestic manufacturers were not included in last year’s recalls of lead-tainted toys. High quality/low volume producers “are the ones that many consumers have been turning to for safe toys in recent months,” he said. He also claimed regulations for big producers won’t work for the small manufacturers but said “unfortunately larger companies have greater influence in this process than smaller companies.”

The patchwork regulation that Rainville fears will come from state initiatives intending to do what the federal government is not, will be difficult for manufacturers to navigate, especially low volume producers. “It will be sadly ironic that the main victims of the increased requirements may be the very same manufacturers that the American public turned to (successfully) for safe toys during the 2007 holiday period,” he said.

Some proposed testing regimes will end up taking some very good products off the market, he said, pointing to the expense of independent testing. “If a product doesn’t have sufficient volume or margin to cover those costs, it will disappear. There is even the likelihood that some good companies will be forced to leave the business. All for a less-than-certain assurance that certification programs will actually be faithfully conducted,” he said.

Rainville has heard few solutions to the problem which he considers viable. “The best answer is to allow and encourage the market to punish the violators. Consumers are slowly learning that maybe there is no free ride after all,” he said. He also said consumers must consider the origins of the products they buy.

Bly feels that the Consumer Products Safety Commission needs more help to stop unsafe and toxic toys from making it to American shelves. “There should be stiff penalties imposed on companies that get caught [importing unsafe toys] at the borders - and a regulation that would ban that company for a period of time from importing any products into the U.S.,” he said. “I think this regulation would motivate those companies having toys made in China to comply with U.S. standards quickly. And it might also bring some of these companies back home again.”