Will the U.S. Senate Hurt Small Businesses Again?

A new law threatens to bury small handmade makers of soaps, lotions, creams, lip balms and scrubs.

By Mark Riffey

About six years ago, there was a big fuss about the CPSIA, a law that was written to sharply reduce lead in clothing, toys and other items made for children under 12. Why lead? Lead poisoning causes developmental and neurological damage in young children, including by breathing dust from peeling lead paint.

I made some noise about the law as originally passed because it would force the makers of handmade childrens’ items out of business – and a lot of those businesses exist here in Montana. It wouldn’t have put them out of business because their products contained lead, but because of the costs of per-batch independent lab testing to prove they were lead-free.

The law passed unanimously. Imagine that happening today.

Fixed eventually, but too late for some

CPSIA passed in response to the recall of millions of lead-tainted toys in 2007-2008. However, there was an uproar from makers of small motorcycles and bikes. Lead appears in tire valve stems and other unlikely contact areas, which left them subject to the law.

The publicity resulted in a number of public forums. In a response to my question during the Kalispell forum, my U.S. Representative lied to my face that he didn’t vote for the bill (the link shows otherwise). He then took the side of the youth motorcycle manufacturers (rightly so, I think) and said he’d fix the poorly-written law he’d voted for.

The law eventually got fixed, mostly, via an amendment exempting both small volume (often handmade) manufacturers – the ones who couldn’t possibly afford the testing requirements of the original law – and those reselling items they didn’t manufacture. While it didn’t save thousands of small handmade manufacturers from their losses prior to this amendment, it did stop the bleeding.

I say “fixed, mostly” because the law was amended to allow Mattel to perform their own lead testing rather than use independent labs other manufacturers must use by law. The irony? The slew of lead problems that provoked Congress to act involved millions of toys manufactured by Mattel and their subsidiaries.

What’s this got to do with soap?

I share all of that for a couple of reasons.

One, there are parallels in the CPSIA story to a new bill that could affect manufacturers of handmade soaps, lotions and the like, Senate Bill S.1014, the Personal Care Products Safety Act.

Two, as with CPSIA, there are a number of small manufacturers of homemade soap, lotions, creams, lip balms and scrubs in the Flathead.

Three, when the press microphones are on, there’s a high likelihood of horse biscuits along the lines of “I voted for it before I voted against it” or “My vote was a shot across the bow“, so have your biscuit filter ready.

S.1014 is on the agenda of the Senate Committee on Health, Education, Labor, and Pensions, which is full of high-profile personalities, including two Presidential candidates. The needs of your small business or your employer may not mean squat in the context of Presidential candidate image makers advising these people.

Handmade manufacturers on alert

As in the CPSIA situation, an industry group has worked to provide exemptions for small handmade manufacturers. The Handmade Cosmetic Alliance (HCA) has for months tried to educate and reason with the bill’s authors and suggest that they include small manufacturer exemptions like those found in the 2011 Food Modernization Safety Act (FSMA). Despite that, these small handmade soap, lotion and cosmetic manufacturers will be held to the same standards that makers of prescription drugs and medical devices meet.

Most of the 300,000 (!) small manufacturers of soaps, lotions and scrubs use food ingredients found in grocery stores, even though customers don’t eat them or use them to treat a medical condition. We’re talking about olive oil, oatmeal, sugar, coconut oil, etc. My wife’s business buys olive oil for their creams off the shelf at Costco.

This law will force businesses to pay user fees that will result in higher prices, plus it will add more paperwork by requiring businesses to file per-batch (10-50 units) reports. For the more successful local manufacturers, this could result in hundreds of FDA filings per month. Everyone has time to do that, right?

It’s almost tourist season in the Flathead. Many of the products tourists buy and take home are made and sold locally, and thus feed local families. Speak now or …

Print readers – There are 12 links in this story. I suggest you check out the online version.

Want to learn more about Mark or ask him to write about a strategic, operations or marketing problem? See Mark’s sitecontact him on Twitter, or email him at mriffey@flatheadbeacon.com.

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