New federal legislation, market pressures elevate scope of Toy Industry Association’s advocacy efforts.
Like a kids’ favorite action hero figure, the toy industry has shown its figurative muscle in the face of tough new legislation [Consumer Product Safety Improvement Act], an economic recession, and increased material and labor costs. In 2008, retail sales of toys generated $21.64 billion, a decline of just 3 percent versus the year prior. Although toy sales took a 5 percent dip in the fourth quarter, the industry stayed the course in comparison to the double digit decreases of other industries such as real estate and automobiles. The relative strength of toys speaks to the category’s creativity, innovation and ability to provide affordable, year-round entertainment to both kids and families.
Toys are low-price, thin-margin, high-volume products with an admirable safety record. The average price of a toy sold in the U.S. is just $8, which increased by 2 percent in 2008. Ours is a technology-trailing industry, meaning that toy makers often adapt technology developed for other applications (such as integrated circuits) for new creative uses, once it is demonstrated to be safe and has become inexpensive. For today’s youth who are digital natives, the ongoing stream of tech-friendly playthings adds to the category’s accessibility and competitive advantage.
As the trade association for the North American toy industry, Toy Industry Association serves the needs and interests of our members by producing market-driven trade events such as American International Toy Fair and Fall Toy Preview; initiatives such as the Toy Safety Certification Program (see sidebar) and effectively representing industry interests in legislative and regulatory affairs. The passage of the sweeping new CPSIA in August 2008 strengthened the need for the association to step up its advocacy efforts. We expect the legislative and regulatory environment to continue to be dynamic and multilayered, with new challenges emerging for the industry at federal, state and international levels.
WORLDWIDE COMMITMENT NECESSARY
Much pride is taken in the industry’s excellent safety record, which dates back to the 1930s, when the TIA (then called the Toy Manufacturers of America) established a Toy Safety Committee and began a partnership with the National Safety Council. An annual ranking by the Consumer Product Safety Commission consistently places toys among the safest of 15 products found in the home. Still, our members are constantly working to strengthen and improve their safety practices. Key issues the industry has focused on include lead and detachable magnets with which there were earlier issues. We are especially proud that the total number of toy recalls during the second quarter of 2009 decreased 75 percent versus the same time period the year prior, which confirms that the safety assurance programs followed by toy makers are indeed working.
Advocacy is central to Toy Industry Association’s mission and TIA was and continues to be heavily involved in advocating for sound federal legislation that would prevent the proliferation of different state regulations affecting toys. Following the signing of the Consumer Product Safety Improvement Act by President Bush in August, 2008, we have been working closely with legal counsel, our members, major toy retailers and other stakeholders to develop proposals and guidance for the CPSC to write regulations that fulfill the requirements of the new law and are at the same time practical and reasonable for industry.
Throughout 2008, we worked shoulder-to-shoulder with industry partners including the American National Standards Institute (ANSI) and ASTM International in support of toy safety. Significant strides have been made toward the international harmonization of toy safety standards, as representatives of China, Europe and the U.S. reviewed national and regional standards with a view towards convergence. The ultimate goal is to have a single set of clear requirements for the worldwide toy industry that will be applicable in all markets. Participants will continue their coordination efforts throughout 2009 recognizing there will need to be broad commitment. As part of this effort, TIA co-sponsored, with the U.S. government, a conference on toy safety regulations for regulators from Pacific Rim nations (APEC) in Singapore in early August.
A second workshop, entitled An Open Dialogue on Toy Safety for All Stakeholders, will be held on the margins of the Hong Kong Toy Fair in January 2010.
With the proliferation of cutting edge technology, new play patterns, and an abundance of virtual worlds which build brand loyalty, the toy industry will continue to wow consumers. We will support these efforts by deepening relationships with government, regulatory agencies and key stakeholders around the globe, to fine tune the new regulatory measures and build toward international standards harmonization.
Carter Keithley is president, Toy Industry Association, Inc., the not-for-profit trade association for producers and importers of toys and youth entertainment products sold in North America. For information visit www.toyassociation.org.