Sunday, August 28, 2011

New Child Product Safety Regs Impact the Promotional Products Industry

It didn’t receive much fanfare, but earlier this month, President Obama signed into law legislation that further tightens the restrictions placed on lead in toys and other items (like promotional products) primarily aimed at children. The amended law also clarifies several ambiguities that have existed since the original Consumer Product Safety Improvement Act (CPSIA) was passed in 2008.

What got tightened (even further) is the amount of lead allowable in children's products. It dropped from 300 parts per million (ppm) to 100 ppm on August 14. Products produced before this date are grandfathered –so only products that are manufactured AFTER August 14 will have to adhere to the stricter limits.

The Background

It’s interesting. Back in 2007, Nissan bought 100,000 ceramic coffee mugs directly from a factory in China and distributed them in Japan to anyone who took a test drive in one of their cars. The mugs contained excessive lead to the tune of 100 times the legal limit (Japan’s) and a lot of people got sick.*

Later that year, The California State School Board forced a recall on 50,000 lunch bags after testing found excessive lead in the lining of the bags. Then came the Mattel toy recalls that made headlines worldwide. And by the end of that year a total of 448 product recalls had taken place – 52% of which involved children’s products – and 100 of which involved excessive lead in paint on the products. The vast majority of these products were manufactured in China.

The Bush administration, Food and Drug Administration and the Congress reacted to all this by quickly passing the Consumer Product Safety Improvement Act of 2008 (CPSIA) which placed sharp limits on the amount of lead allowable in products aimed primarily at children ('children' being defined as anyone age 12 or younger).

About Lead

It’s cheap, it’s everywhere and in industry, it has many uses. At the time of the events I’ve just detailed, China was dealing with some major economic challenges – among them rising salaries, skyrocketing gas prices, high material costs and the margin pressures associated with doing business with some of the big American retailers. Frankly, some manufacturers cut corners and no one noticed till it was too late.

What it Means

The potential for liability, negative publicity and brand erosion. Where the antennae need to be raised is when a promotion is intended PRIMARILY for children ages 12 or under.

Bottom line is products intended for kids in this age group cannot contain lead.

And as for what defines whether a product is "primarily intended for children ages 12 and under" - that unfortunately is a bit of a gray area. There are numerous factors, like functionality of the item, what the imprint looks like (i.e. does it have a cartoon-like caricature), how it’s being distributed etc. In total, there are about 30 different factors, so the best suggestion, we've been told by experts on this, is to simply use common sense.

Our Concern

In an industry with 3500 to 4000 suppliers, we’re concerned that the number of suppliers that will to pay attention to the tougher CPSIA may be a lot lower than one would expect. And given the pricing pressures that exist right now, we expect that many will totally ignore them – which exposes buyers (and sellers) of these products to the negatives that I’ve noted above.


While the events of 2007/2008 caught the entire industry by surprise, there are some who realize the seriousness of this issue and are now trying galvanize the rest of the industry to embrace this issue.

Here's a link to an interview with Geiger CEO, Gene Geiger and and Rick Brenner, the CEO of industry supplier, Prime Line highlighting a recent summit that the two of them chaired to raise awareness about these recent developments.

Where this is headed is anyone's guess, but my biggest fear is that latest round of regs will sour some people to promotional products and the benefits that they provide. At a time when new jobs are not exactly plentiful, making it more difficult for companies to brand themselves to users of their product or service isn't good for anyone.