US: Safety act costs businesses $2 billion

Toy Industry Association survey shows safety act could cost the industry ten per cent of overall retail value in 2009.
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The TIA has surveyed manufacturers, importers and retailers to find information about the impact the 2008 Consumer Product Safety Improvement Act (CPSIA) legislation is having on the toy industry.

Nearly 400 manufacturers and importers and more than 220 retailers responded and findings were that the CPSIA requirements have resulted in “an estimated $2 billion negative impact (estimated retail value)” on the companies that responded to the survey.

In excess of $1 billion worth of inventory has already been returned by retailers, is non-saleable or is being withheld for CPSIA verification before sale. $800 million in previously compliant inventory is also at risk of being returned to manufacturers.

More than 40 per cent of respondents indicated they plan to make job cuts as a direct result of the act’s requirements. Of those manufacturers, in excess of 1,200 jobs are in jeopardy of being cut.

The 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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