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TOP BULK VENDING STORIES: Consumer Groups Sue CPSC; Tomy Yujin To Exit U.S Market

Posted On: 12/9/2008

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Phthalates Fight Continues: Consumer Groups Sue CPSC

WASHINGTON, DC -- A recent decision by the Consumer Product Safety Commission allowing the sales of products containing phthalates, before a congressional ban goes into effect early next year, has already met with dissent from two consumer advocacy groups. The Natural Resources Defense Council and Public Citizen filed a lawsuit on Dec. 4 that seeks to amend the CPSC announcement that toys manufactured prior to Feb. 10, 2009, could contain phthalates and still be sold. The groups suggest that the CPSC ruling allows manufacturers to stockpile toys in attempts to bypass the law.

In a letter that circulated through the bulk vending industry, the CPSC attorney said that unlike the provisions made for lead, which apply retroactively to existing inventories, those for the common plastic- softening agent apply only to production following the February deadline. See story here.

According to the NRDC, the CPSC is guilty of creating a "loophole" in the law and negating its responsibility to carry out enforcement of the ban. This position has been supported by a number of lawmakers, including Sens. Barbara Boxer and Dianne Feinstein, and Rep. Janice Schakowsky.

"The Consumer Product Safety Commission is ignoring the will of Congress and threatening our children's health," said Dr. Sarah Janssen, an NRDC scientist. "Overwhelming evidence led Congress to ban these toys, a ban that some retailers have already started to adapt. The CPSC decision completely undermines these efforts by allowing banned toys on the same shelves as the safe ones."

The CPSC has not officially responded to the lawsuit, though it may be a moot point for many in bulk vending. According to industry experts, the interpretation of the law by the CPSC does not affect state laws that have already banned the substance.

"It's the job of the CPSC to protect us from harmful products, yet they have done the exact opposite in this case - creating legal loopholes where they did not exist," said Aaron Colangelo, an NRDC attorney. "They've strayed from their basic mandate to protect consumers."


Tomy Yujin To Exit U.S. Bulk Vending Market In February

NEWPORT BEACH, CA -- Tomy Yujin Corp. will cease all U.S. vending operations on February 28, 2009, according to a company official. The bulk supplier has no plans for any new product introductions as it liquidates existing inventory. The official said the closure of the U.S. vending business will not affect the company's bulk vending operations in Asia or Europe, or its U.S. retail toy division.

"The move is due to global economic factors, including the increase in manufacturing costs in China," reported Amanda Newhard, Tomy's sales and marketing manager. "There was just an inability to expand beyond the $1 price point in the U.S. market, while in Europe and Asia products are regularly vended for the equivalent of up to $4 in larger capsules."

TYC is a division of the Tokyo-based Tomy Co. Ltd. Founded by Eiichiro Tomiyama in 1924, the firm is reportedly the second-largest toy manufacturer in Japan, and fifth largest in the world.

TYC entered the U.S. vending market with its Gacha machine and $1 capsuled novelty lines in April 1999. Since then, it has sold hundreds of millions of capsuled toys based on such high-profile licenses as The Lord of the Rings, Pokémon, Hello Kitty, The Simpsons and a wide variety of Disney films. Throughout its nearly 10 years in the U.S. bulk vending market, the firm adhered to a strategy focused on bolstering consumer demand and collectability through well-known licenses and limited production runs.

The Gacha vending system consists of four heads topped with an attractive display case. Each head can hold approximately 175 capsules, 2" in diameter. The display shows consumers exactly what they are buying, helping to increase sales. Multiple units can be joined together by plates to create an impressive vending bank.

The machines are most prominent in Asia. In Japan, Yujin says it commands about 40% of the novelty vending market. Special Gacha festivals are held there throughout the year in which machines are lined up, loaded with product and shopped by vending patrons looking for missing pieces to their toy collections (see photo). While the festivals never caught on in America, an estimated 15,000 Gacha machines may have been placed.