Sanjay Luthra on: What’s next for the European Toy Industry?

What’s next for the European Toy Industry?

Sanjay Luthra is Managing Director EMEA at Mattel and President of Toy Industries of Europe (TIE). Sanjay has extensive experience in the toy industry, having worked in several global roles for Mattel since 2003, as a member of TIE’s Board of Directors since 2018, and guiding TIE through the turbulence of Brexit and COVID in its role as Chairman since April 2019. TIE is the European toy association that represents the toy industry in Brussels. TIE exists to facilitate dialogue between members, represent the industry to European policymakers, and keep members informed of legislative changes that will impact the toy market.

Guiding Toy Industries of Europe through one of the most turbulent times for the industry has been a real challenge for its Chairman, Sanjay Luthra. Here he gives his thoughts on the toy industry as it emerges from the difficulties of the past years and as it prepares for what lies ahead.

The past two years have been some of the toughest the industry has ever faced. We have collectively battled on all fronts: managing ongoing supply chain issues, component price increases, and retail closures; maintaining staff wellbeing and supplier and retailer relationships throughout lockdowns, as well as facing the implications of ongoing political changes. It has been difficult for many, but as a resourceful and resilient industry we are emerging from some of those challenges as strong and creative as ever. It is clear we are now in a phase of constant change, and we will need to continue to be creative to meet the expectations of regulators as well as consumers.

But the industry pulls together positively whenever it is needed. The most recent global challenge, the war in Ukraine, has seen the toy industry mobilise efforts across the globe to provide support and comfort to many innocent children and families affected by this invasion.

An important lesson from the pandemic

During the pandemic, play had a more important role than ever before. Toys were parents’ best allies in keeping their children entertained through tough times. Consumers always managed to find ways to purchase toys even when stores closed during lockdowns. It confirmed what we knew – that toys are essential for children’s educational development – and the pandemic helped parents to realise it too.

As an industry, moving forward, we must all find ways to promote that importance, a collective voice strengthens the message. This is one of the key goals of TIE, especially when it concerns convincing policy makers: they need to fully realise the importance of play and toys when starting the conversation on any legislative proposal affecting our industry.

TIE has been trying to keep up with a very busy political agenda

As chairman of TIE, I work closely with the board and secretariat to identify the issues that will impact the toy industry and we have noticed that during these two years of Covid, the number of issues we need to deal with has never stopped growing. EU legislators used the quiet of the lockdown to work on ever more proposals for revisions or new legislation.

At TIE we always try to look at the opportunities such initiatives may create for our industry, but it is equally, if not even more, important to look out for the challenges and be sure to address them in the best possible way. Whatever is put on paper as a proposal in Brussels will in many instances lead to significant changes on how toy makers run their business, design their toys and market them to consumers. We must remain vigilant and make sure our voice is taken into account as these new rules are shaped and implemented.

Safety and fair rules remain our main concerns

TIE’s main concern for many years has been about defending the status quo of the Toy Safety Directive. Recently, however, the Green Agenda of the European Union has also pushed for far-reaching changes for our industry that will impact toy safety legislation.

But in the end, the most immediate and greatest impact we can expect is probably still related to the Toy Safety Directive (TSD) which will be reopened so all aspects of it are up for discussion, nothing is off limits. The TSD governs the production and sale of all toys on the European market. It has been the safety bible for reputable toy manufacturers since 2009 and is regarded as a global benchmark by worldwide regulators. The European Commission – backed up by the European Parliament – feels it is time to check whether the TSD continues to be as strict as necessary to protect children, especially where chemicals are concerned. At TIE, we fear unnecessary bans on chemicals that would not result in safer toys but could force some toys and SMEs off the market – and would only benefit rogue traders who disregard the rules. Today, a spoon from a toy tea set is already subject to stricter requirements than a real spoon a child eats with. The TSD must continue to impose a rigorous scientific approach to the use of chemical substances in toys.

TIE, and its members, is committed to collaborating closely with EU policy makers and standardisation organisations to ensure the new TSD continues to be a role model of workable safety regulation across the world, enabling a wide choice of safe, fun and affordable toys for children.

It is TIE’s job to make sure that reputable toy makers are able to continue to grow. For several years now, TIE has strongly advocated for the closing of loopholes in EU law that continue to allow illegal traders, often based outside the EU, to sell dangerous toys or counterfeits to EU consumers online. These criminals undercut the prices of reputable manufacturers who play by the rules, as they don’t invest in making legally compliant toys. By doing so, they put children at risk, diminish trust in eCommerce, undermine the industry’s reputation and cast doubt on the strength of the current regulation.

Policy makers and customers alike call for minimal environmental impact

There is, and will continue to be, growing pressure on all sectors to reduce their environmental impacts – and the toy industry is no exception to that. Policy proposals are being discussed that will set new rules for packaging and packing waste, use of batteries, plastic recycling and plastic reduction, just to name a few.

Looking forward, we need to become more environmentally aware. It will be good for our planet and also makes commercial sense as customers are increasingly making green choices. I am not saying it will be easy, but TIE will voice the interests of our companies and ensure the change happens in the best and fairest way possible.

Toys can make the world a better place

I love the way this industry connects with kids and am proud of how we can help influence society through that connection. I can only encourage the wider toy sector to continue to promote social change, such as encouraging diversity and inclusion. So much progress has been made in the development of toys that break boundaries based on outdated ‘norms’ of social status, ability, sex, race or religion and we need to continue to build inclusivity into all the toys we make and market. This is something I am extremely proud of at Mattel and I know there are many other good initiatives across our sector.

I believe the industry can only benefit by looking forward and investing in changes that reflect modern values and expectations. As chairman, I’m really proud of TIE’s Play for Change Awards which promotes toy makers that go the extra mile when developing their products and company values. I passionately believe we should celebrate companies that are working to protect the planet, encouraging children’s respect for one another or investing in the skills they need to succeed in the future.

TIE unites the toy sector and prepares it for the future   

It is clear we would not be able to do the work we do without the good pan-industry collaboration within the organisation. We have a common interest and all our members invest in the overall objectives, from large multinationals to much smaller companies: we are in it together.

And of course, the collaboration with our national association members, from across the EU Member States and the UK, is often the key to our success.

Personally, I believe membership is important for companies across Europe.  It is because of TIE’s finger on the pulse that Mattel knows about upcoming legislative changes way ahead of them becoming official. That gives us time to adapt or to react in case we deem them unworkable for our sector or our company, helping us to offset costs and to better control our materials and supply chains. I can only imagine that this is important for every toy company.  And for TIE, the more representative their membership, the better.

If you would like to keep up-to-date on policy news, find out more about the topics in this article or join the discussion on future legislation, please get in touch to find out about membership – www.toyindustries.eu or contact info@toyindustries.eu.