Safer toys won't be cheap - Buyers can expect to pay 10% more as soon as Januar

Safer toys won't be cheap - Buyers can expect to pay 10% more as soon as January
By Anne D'innocenzio
Copyright © 2007, Chicago Tribune and The Associated Press
September 14, 2007


NEW YORK - American consumers will be bearing the cost of safer toys, but not until after this year's Christmas season.

Shoppers can expect price increases up to 10 percent next year to pay for increased vigilance by toymakers and stores after more than 3 million lead-tainted toys from China were recalled worldwide since June. That means a $6.99 Barbie doll could go up to about $7.70, or a $70 child-friendly digital camera could retail next year for almost $80.

A 10 percent average increase would be the biggest one-time price hike in toys in several years, analysts say. And it's more than twice the government's measure of consumer inflation of 4.7 percent during the first seven months of this year.

Consumers could also see higher prices on other Chinese imports such as fish and children's apparel, but the big price gains in toys could be more jolting.

Shoppers have become accustomed to cheap playthings from China because Wal-Mart Stores Inc. and other discounters have waged cost-cutting campaigns. Critics say real safeguards were sacrificed to keep prices low, however.

Analysts said the price increases are unlikely to hit until at least January because manufacturers and sellers already ordered for Christmas. That's no consolation for parents, though.

"I will pay more [for toys] because I know it will ensure safety," said Lisa Sallese, a Wilton, Conn., mother of a 7-month-old boy and a 2-year-old daughter. "But it stinks. It should have been safe to begin with."

Most of the rising costs come from emergency third-party testing in the U.S. by both makers and sellers as they aim to root out any unsafe products, analysts say.

Mattel Inc.'s three high-profile recalls of lead-painted toys since the beginning of August have pushed product testing to a frenzied pace. Companies are removing playthings from shelves and sending them to independent laboratories to be examined. The price of labor, overtime and testing will drive up costs in the short term, analysts said, but increased regulation will likely keep them higher.

The U.S. Toy Industry Association supports a federal requirement to make safety testing and inspection mandatory and is working with the American National Standards Institute to develop industrywide safety procedures. But during Wednesday's congressional hearing on toy safety, senators urged even more stringent measures including stepping up fines for selling or failing to report dangerous items.

This week, Toys "R" Us Inc., the nation's second-largest toy seller, behind Wal-Mart, said it would be using an independent laboratory to test every branded product, according to Kathleen Waugh, a company spokeswoman. The retailer will be absorbing the extra costs this year, but Waugh said that she believes next year "pricing could increase."

The Walt Disney Co. -- hit by Mattel's recall of 436,000 cars based on "Sarge," a character in the Disney-Pixar movie "Cars," that were believed to contain lead paint -- will independently test toys featuring its characters. The tests will begin in the next two weeks and will include all categories of products from about 2,000 licensees, including Mattel, which is the largest maker of Disney-related toys.

Chris Byrne, a New York-based toy consultant, said shoppers can still expect price wars this holiday season, led by Wal-Mart.

Some shoppers say they are postponing toy buying until they are comfortable that the toys are safe.