Congress Battles Over Rules as States Boost Safety EffortsThe $33 billion-plus U.S. children's product industry faces increasing state efforts to regulate its products while Congress wrangles over federal rules that won't be in place in time for this year's holiday shopping season.
That could fuel consumer worries about another slew of safety recalls and leave many makers of children's products uncertain about how to comply with a proliferation of state standards and a federal framework that still is uncertain.
Mattel Inc., which had to recall millions of toys last year because of problems that included potentially deadly high-power magnets, said it supports tougher federal standards that give the industry clear and uniform rules.
"Some states have passed extremely restrictive laws that, depending on how they are implemented, may make it impossible to sell many safe toys in these states," said Mattel spokeswoman Lisa Marie Bongiovanni, who said the company supports uniform national standards of regulation. "Fifty different state standards will create a confusing patchwork of regulations, limit certain toys sold in some states, drive up costs for consumers and will not substantively increase toy safety," she said.
Toy manufacturers must comply with a 1970s-era law limiting lead to 600 parts per million for paint used on houses or toys. The push to tighten those standards follows recalls last year of 25 million toys and millions more children's products such as pajamas, jewelry and furniture. Many of those recalls were for lead.
In an overhaul that is the most sweeping in a generation, manufacturers in the U.S. toy and children's product market would have to ratchet lead down not only in paint but also in most components -- possibly even parts not accessible unless the item is taken apart. Complying with lead content limits of 100 parts per million will prove far easier for large manufacturers and retailers than for small outfits that make up the bulk of certain segments, such as jewelry.
Mattel, Hasbro Inc., Wal-Mart Stores Inc. and Target Corp. have more resources and heft to prepare for anticipated changes and have done so already in the U.S. and the more tightly regulated European market.
Wal-Mart has instructed suppliers they will have to meet new lead and chemicals safety standards by the fall that are more stringent than current government regulations. Target has said it is banning phthalates, a plastics additive linked to developmental problems in children, from its store-branded products by year end. Target also is lowering allowable lead limits in children's products and jewelry, ahead of federal action.
Hasbro Chairman Al Verrecchia said the company already ensures that accessible parts in its toys contain no more than 100 parts of lead per million, a level the federal legislation doesn't envision for at least three years.
The problem for consumers is that children's products for the holidays already are starting to ship from China and elsewhere to the U.S. because the manufacturing cycle is nine to 18 months from design to retailer. Manufacturers already are designing 2009's toys without clear federal guidelines.
Congress repeatedly has delayed release of a final version of the safety standards, which are part of a broader overhaul of the Consumer Product Safety Commission, the nation's chief product-safety regulator.
The bill was expected to come to a vote next week but now could be delayed further, because of arguments among House and Senate negotiators over whether the new federal standards could pre-empt state regulations.
After delays in Congress and continued weak federal oversight, 16 states have devised laws that are in some cases stricter than what Congress envisions. A proposal in Washington state would curb allowable levels of lead in toys and other products to at most 90 parts per million compared with the 100 parts per million proposed by the House and Senate bills. Industry lobbyists said the competing rules will confuse consumers, make compliance difficult and encourage multiple actions against businesses.
The engineering division of car-seat maker Sunshine Kids Inc. already conducts 50 sometimes-overlapping tests to comply with competing state and federal standards, adding as much as 30% to the cost of a child seat, the company said. Sunshine Kids's chief engineer said it could take nine months to check a seat's 150 separate parts for lead content, to comply with coming state and federal laws.
Archie McPhee, a quirky toy shop that is a landmark in Seattle, has said it will close if Washington state enacts a law setting the toughest lead standards in the nation and restricting the use of several other chemicals. The standards, slated to take effect in mid-2009, would be far tougher than the federal proposal, which may or may not ignore plastics additives such as phthalates, which would be banned in Washington and California.
The largest retailers still aren't immune. In April, the Consumer Product Safety Commission, in cooperation with Wal-Mart, issued a recall notice of 12,000 Chinese-made "Hip Charm" key chains distributed by the retailer because of charms that can contain high levels of lead, the agency said. That recall followed an alert from the Illinois attorney general, the agency said.
Smaller retailers are anticipating some challenges. Sharon DiMinico, president of Learning Express, a specialty toy retailer and franchiser, said she expects there could be some delays getting certain products from vendors that might have slowed production because of uncertainty about changing regulations.
The CPSC has suffered for three decades from slashes in budget and staffing initiated during the antiregulatory fervor of the Reagan era. The agency of about 400 acknowledges its struggle to police more than 15,000 products in a global marketplace where 80% of toys sold in the U.S. come from China.
Aside from resolving differences on pre-emption, the House and Senate negotiators also have had to resolve divisions on other measures in the bills, including disagreement on whether a final bill would cover products for children of up to age 7 or as old as age 12. The bills also differ on how soon the lead standards should take effect or whether other chemicals should be included.
Manufacturers are fighting a measure in both bills that would post consumer reports of product-safety problems online, saying the database could provide a forum for baseless claims by competitors.
The Bush administration has said it is committed to continuing a strong product-safety system. The administration said the House bill "takes positive steps" to further protect Americans, and the White House supports "many of the measures" in the Senate bill, but it expressed some concerns with others.
By: Melanies Trottman & Elizabeth Williamson
Wall Street Journal; June 18, 2008
