TIA: Safety Act Puts $2 Billion Crimp in Toy Business
By Playthings Staff -- Gifts and Dec, 3/11/2009 12:39:00 PM
New York — A Toy Industry Association (TIA) survey says that the 2008 Consumer Product Safety Improvement Act has already cost U.S. toy businesses at least $2 billion, and could cost the industry 10 percent of its overall retail value in 2009.
In mid-February, TIA surveyed manufacturers/importers and retailers to collect information about the impact CPSIA legislation is having on the toy industry. Nearly 400 manufacturers and importers and more than 220 retailers responded, according to TIA’s Toy News email newsletter. Those survey's findings include:
• CPSIA requirements have resulted in “an estimated $2 billion negative impact (estimated retail value)” just on the toy companies that responded to the survey.
• In excess of $1 billion worth of inventory has already been returned to manufacturers from retailers or is currently sitting in warehouses as non-salable or is being withheld for CPSIA verification before sale.
• $800 million in previously compliant inventory is in jeopardy of being returned by retailers to manufacturers.
• More than 40 percent of respondents indicated they plan to eliminate jobs as a direct result of CPSIA requirements. Of those manufacturers, in excess of 1,200 jobs are in jeopardy of being cut.
TIA says a more comprehensive analysis of survey results is underway. The trade association plans to report additional information from the survey in at a later date.
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