Consumer CompaCt the Consumer produCt publiCation that keeps you informed

deCember • 2010

where will the next global retail market emerge?

e-toy market Continues to grow

outdoor industry takes the lead on sustainability

what are the new, emerging markets?

dear reader,

page 2editorial

Does your business strategy focus on expanding into emerging markets? Knowing what markets are bound to experience the largest growth will enable you to get there before your competition. The last 2010 issue of Consumer Compact focuses on emerging markets, both in terms of geographies as well as industry sectors.

Find out what are the new high-consumption markets for textiles and why outdoor textiles deserve the title of “greenest clothing”. As machines are now increasingly capable of communicating between themselves without human assistance, the new “Internet of Things” is bound to reshape the way we use various technologies. With end-of-year celebrations around the corner, find out why E-Toys are so popular and how your packaging can influence your product’s success.

SGS is constantly at your side, supporting you with product quality and product safety services and much more. For the entire range of SGS services visit: www.sgs.com/cts.

The SGS CTS Marketing Team

in this issue

industry newsConsumer produCts - sustainabilityGlobal Social Compliance Programme A Tool to Reduce Audit Fatigue or Yet Another Initiative? - read article Page 3

softlinesWhere Will the Next Global Retail Market Emerge? - read article Page 4 Outdoor Industry Takes the Lead on Sustainability - read article Page 12

eleCtriCal & eleCtroniCsUpdates on Standardization Efforts of Machine-to-Machine Technologies - read article Page 6 All You Need to Know About Exporting Electronics to Russia - read article Page 7

foodAnimal Drug Residues - Do You Know What’s in Your Product? - read article Page 8 Deceptive Food Packaging is Bad Business - read article Page 9

hardlinesE-Toy Market Continues to Grow - read article Page 10New Rules for the EU Cosmetics Market - read article Page 11

sgs in the newsNew events, new services and accreditations. Page 13 to 15

safeguards Page 16 SafeGuards, are SGS technical bulletins concentrating on new product standards, regulations and test methods. See list of featured SafeGuards.

produCt reCalls Page 16 SGS Product Recalls is offered for no charge as part of our SafeGuards publication. See more details.

sgs ContaCts Get in touch with one of our regional contacts Page 17

dear reader,

page 3industry news - Consumer produCts - sustainability

global soCial ComplianCe programmea tool to reduCe audit fatigue or yet another initiative?For some time now, factories have been complaining about audit fatigue caused by the multiple ethical audits requested by their customers. This has come about because customers have their own programmes, mostly based on the same core ILO conventions with slight variations in content or audit methodology. As mutual acceptance has failed to materialise, factories report having to undergo multiple audits leaving them little time to tackle the resulting action plans or implement sustainable solutions to rectify any nonconformities.

Companies have been discussing ways to overcome these hurdles. In 2007, some of the biggest global retailers came together to develop a Unified Code of best practices to improve labour standards in their supply chains. This initiative became the Global Social Compliance Programme (GSCP) and the initial retailers, Carrefour, Metro, Migros, Tesco, and Wal-Mart were soon joined by many others. The programme now has more than 650 retailers, manufacturers, service providers and other stakeholders working on developing a shared, global and sustainable approach for the continuous improvement of working and environmental conditions.

These participants have existing ethical and environmental codes of their own, many based on existing programmes such as Business Social Compliance Initiative (BSCI), Ethical Trading Initiative (ETI), Initiative Clause Sociale (ICS) or others. However, they have all agreed to set aside their own preferences to:

build consensus on best practices

develop a clear and consistent global message for suppliers

drive convergence by building comparability and transparency between existing systems

reduce audit fatigue and duplication

strengthen collaborative efforts for building capacity and training

The programme is also fully inclusive, allowing companies to choose to adopt its Code and tools or to use their own if they meet the same criteria.

new gsCp Code and tools

Three years on, GSCP has published a reference code and tools covering labour standards, environmental management and auditor competence as well as a methodology to allow companies to benchmark their codes against these tools. The group also has a number of other work streams in process looking at Management Systems, Data Sharing and Remediation.

In order to maintain their inclusive approach the work streams apply a consultation process and input is welcome from all interested parties. The whole process and outcome is reviewed by an advisory board made up of a variety of civil society international stakeholders such as NGOs, trade unions, academics and the like.

what is the point of the initiative?

There currently exists a high number of codes and programmes as well as local laws intended to regulate the way companies operate. The initiative gives suppliers a single set of requirements to meet and the possibility of undergoing a single audit accepted by multiple buyers. This should lead to significant cost savings both in terms of audit fees and lost productivity while audits take place. At the same time buyers hope to benefit from a process reduction in the need to audit all their suppliers. This should, in turn, release resources for follow-up and remediation.

what next?

GSCP members are now benchmarking their systems against the GSCP reference tools to identify changes required to their systems where they wish to continue with

their own programme rather than adopting the tools themselves. The equivalence process will then give members a way to recognise other programmes and ensure that they can accept each other’s reports.

SGS has been actively engaged with the GSCP programme since its inception and is well placed to conduct audits against the current reference tools and to help companies integrate the social and environmental modules, providing them with a cost and time-effective approach.

Suppliers can also get ahead by proactively being audited against this programme. Where customers still want to have their own audits undertaken, suppliers will be better prepared by having undergone the GSCP audit process.

Effie MarinosSocial Responsibility Solutions Manager SGS United Kingdom Ltd.effie.marinos@sgs.comt +44 203 008 7860

where will the next global retail market emerge?

page 4industry news - softlines

Today, almost all global fashion brands explore business opportunities in Asian markets. In the midst of the economic downturn, sales of US and European fashion brands were severely hit by a weak wholesale market. The situation is aggravated by the unfavorable global currency fluctuations which greatly impairs brands’ revenue growth. For example, if the cost of a product remained unchanged at 100 units of currency, the product would cost 152 units of currency in Russia, 112 units of currency in China and Korea and only 101 units of currency in Japan, based only on currency revaluation.

The combination of the economic downturn and the revaluation of some currencies has been a growth opportunity for many global brands to drive expansion towards emerging high consumption Asian markets such as China, Japan, Russia and Korea. With a view to achieving a balance in business, increasing returns and minimizing risk, US and EU fashion brands are diversifying their market presence by attempting to increase their Asian market share.

Japan and russia

At present, many leading US brands have established their presence in Japan: Levi’s, Gap, Ralph Lauren, Calvin Klein, Coach, Nike, Tiffany and Timberland. Victoria’s Secret has announced plans to expand into international markets including Japan and Russia. Entering Asian markets is a significant strategy for retailers wishing to achieve global brand positioning and establish brands without boundaries. In some situations, Japanese women would spend 30% of their income on clothing and skin care product consumption, the rise of women’s income and the spending behavior of this region is one of the driving forces for entering this market.

korea

South Korea is another emerging market for global fashion brands. The market is filled with international brands such as Spain’s Zara, Sweden’s H&M, U.S.-based brands like Gap and Forever 21 and G2000 and Giordano from Hong

Kong. These international brands offer various options to accommodate the preferences of Koreans. However, it has been noted that there is a tendency for local Korean stores to emulate the

Japanese Chain store “Uniqlo” in order to compete with the global brands. Many foreign brands prefer to position themselves in the high-end market.

page 5industry news - softlines

GB 18401-2003: CHINA NATIONAL GENERAL SAFETY STANDARD FOR TExTILE PRODUCTS

The General Administration of Quality Supervision and Inspection and Quarantine of the People’s Republic of China has published a national standard GB 18401-2003 “National General Safety Technical Code for Textile Products”. The new standard specifies general safety requirements for textile products manufacturing, distribution or use in China, and it has been in effect since the 1st January 2005.

Find more info here.

China

KOREA CERTIFICATION (KC MARK): IMPACT ON KOREA TExTILE COMMODITIES

The Ministry of Knowledge Economy (MKE) of Korea has implemented a New National Unified Mark, called KC Mark (stands for “Korea Certification”). This is a legally compulsory certification mark that must appear on products as specified in related laws and ordinances.

Find more info here.

south korea

China

Though China has in the last two years fallen from its former double-digit GDP growth rate, it has recovered this year to have an estimated year-on-year increase of 11.1%. This is 3.7 % points higher than for the same period last year. Sales for domestic consumption reached a year-on-year rise of 18.2% in the first half of 2010, valued at about 7.26 billion Yuan.

Clothing consumption in China averaged an annual growth rate of 14.7 % from 2001 to 2008, and over 15% in 2009. In November 2009, China’s total clothing retail sales increased by 25.8% compared with November 2008. In 2010, the total capacity of the apparel market is expected to be more than 6300 billion Yuan. A conservative estimation of the expansion rate of the apparel market by 2015 is around 10.5%.

The Chinese fashion market is very appealing to many key players. Brands are stepping into the market seeking new retail expansion prospects. China seems to have an unending appetite for luxury brands. In 2009, China’s luxury goods consumption hit $9.4 billion, accounting for 27.5 % of global luxury sales. The Chinese luxury market is on the way to become the largest in the world. Louis Vuitton is opening its’ twenty-first direct shop in the China Jiangsu Province. Versace plans to double the number of its stores in China to 44 by the end of 2010, while the Burberry Group will continue its push into China with its network of 50 stores in 30 Chinese cities.

As Asian countries continue to lead the global economic recovery. The next region for retail expansion and future growth will probably be the Asian market.

SGS has a knowledge base of all applicable regulations, as well as a global network of textiles experts that can help fashion brands expand their business to new markets.

Find out more about SGS Softlines Services.

Karen E. Kyllo, Ph.D.Deputy Vice President, Global SoftlinesSGS U.S. Testing Company, Inc.karen.kyllo@sgs.comt +1 973 461 7934

page 6industry news - eleCtriCal & eleCtroniCs

updates on standardization efforts of maChine-to-maChine teChnologies

From its modest wired applications beginnings, the surge in Machine-to-Machine (M2M) applications has been the result of wireless M2M communication solutions, which use wireless and satellite infrastructures to create open communication environments for machines. M2M is not one single growing technology, but rather a collection of solutions from the electronics, telecom and software industries. This means there are more stakeholders affected by its success.

steady market growth

M2M related technologies have established themselves as viable solutions for many industries and have immense growth potential. In 2007 shipments of cellular M2M devices amounted to 11 million units worth approximately EUR 6 billion while the rapid growth is estimated to reach 61 million modules by 2012, worth EUR 38 billion.1 The rapid market growth of M2M solutions has also been facilitated by significant drops in the cost of the various modules used, as well as the emergence of innovative technologies such as Edge Intelligence, which allows real-time data capture and analysis.

The M2M markets that enjoy the fastest growth rates are those for: vehicle telematics, smart buildings, healthcare solutions and connected buildings. The growth of these specific sectors has been supported by governmental projects and legislation focused on these areas and also by the emergence of M2M based initiatives from some of the world’s leading IT and Telecom companies.

standardization is key to future

M2M solutions are slowly becoming mainstream and the continuous success of M2M technologies relies on the standardization efforts of the various protocols. Standards serve as the foundation for the development of innovative solutions that will enable M2M to evolve beyond industrial applications and be used in smart grids, security solutions, home appliance connectivity and public infrastructures.

The emerging array of smart devices is completely dependent on the development of suitable standards that allow them to communicate easily. To ensure the interoperability of M2M solutions several dozen national and international committees and alliances have formed technical groups charged with the development of M2M standards. Some of these initiatives focus on further developing existing standards to suit M2M growth needs, while others are focusing on the creation of dedicated standards. Some of the

most recent initiatives include:

the Telecommunications Industry Association’s (TIA) TR-50 Smart Device Communications engineering committee2 - effort to develop a multi-part standard for Smart Device Communications

the IEEE 802.15.4-2009 standard

China Communications Standards Association’s (CCSA) TC10,

the ZigBee IP Stack

3GPP SA2NIMTC (TR23.888)

the European Telecommunications Standards Institute’s (ETSI) TC M2M

current work by the CTIA CPWG

ERP M2M sub group

While all these standardization efforts lay the path for future innovations, there is also a risk that they will lead to conflicting or redundant standards.

Machine-to-machine (M2M) communication, which has the potential to connect billions of machines and objects, can no longer rely on the existing cellular networks designed mainly to support communication between humans. As the full potential of M2M communication is gradually being tapped into, a multitude of new electronics, telecommunication and information technologies are being developed to improve this communication. This has lead to the development of various technology standards, which now raise the need for global compatibility and collaboration between standardization initiatives.

1 Smart Machines and Connected Objects2 Access Agnostic Smart Device Communications

Continued on next page

page 7

all you need to know about exporting eleCtroniCs to russia

Russia, Ukraine, Kazakhstan and the other CIS countries can offer exciting business opportunities, if companies follow market-entry requirements established for this otherwise hard to

reach part of the world.

Crossing the russian border

Despite close ties with Europe and a large, expanding consumer base, exporting to Russia/CIS can still be difficult. CE marking or international certificates are not recognised by Russian and other CIS authorities for the purpose of conformity assurance. Only by complying with national standards of product quality and safety, can you eventually get your products into Russian/CIS markets.

Depending on the nature of your electronic products you may need to comply with one or more certification requirements and there are up to 18 mandatory systems and over 500 voluntary ones. If this though is for you business as usual, then lengthy certification processes, unpredictable costs and irregularity with Russian authorities might just make you change your mind.

produCt CertifiCation key to a smoother proCess

The most commonly used certification system in Russia is the GOST R Certificate of Conformity. GOST-R verifies consumer products meet the necessary safety standards for customs clearance, sale and consumption in Russia.

industry news - eleCtriCal & eleCtroniCs

The GOST R Certificate of Conformity can be issued for single shipment and is then valid for that one consignment only; or it can cover serial production, enabling you to export unlimited times and quantities of E&E products during the certificate validity period.

Product-related certificates and permits issued by accredited certification bodies apply to the whole of the Russian Federation, even when the certification is granted by a regional certification body.

As in January 2010, Russia, Belarus and Kazakhstan formed a Customs Union, the Russian GOST-R certification is now a valid market-entry tool also for these countries, provided that your product is included on the Unified Product List of the new Customs Union.

SGS is the only global company accredited to provide GOST-R Certifications. SGS labs in Asia and Europe are accredited by Russian authorities to support our GOST-R certification services.

Vladimir OvcharovHead GOST R Competence CentreSGS Vostok Limited Vladimir.Ovcharov@sgs.comt +7 495 775 46 21 ext. 227

Russia and the Commonwealth of Independent States (CIS) are becoming increasingly attractive for the electrical and electronics (E&E) industries, due to their high level of investment in machinery and technological solutions as well as for the growing markets for a wide range of consumer products. But when exporting E&E products to Russia and the CIS you will have to go through a unique market-entry process.

inCreased Coordination of standardization efforts needed

The development of globally compatible standards is seen as key in enabling the further growth of M2M technologies. This will require that work is done to ensure global coordination and collaboration exists between standards organizations. Several standardization groups are beginning to coordinate their activities to ensure their work pushes M2M technologies in a common direction. This effort was reinforced at the 15th meeting of the Global Standards Collaboration (GSC-15) in Beijing. Taking place in September 20103 the event saw the creation of the M2M Standardization Task Force (MTSF). This task force was created with the goal of facilitating global coordination and harmonization of M2M standardization work. Such efforts aim to ensure the future M2M ecosystem with its various interfaces will develop harmoniously.

SGS has the knowledge and expertise to support players in the IT and Telecom industries with the integration of M2M solutions in their service offerings.

Find out more about SGS solutions for the Wireless Industry.

Brian M. DorceyGeneral Manager Wireless SGS U.S. Testing Company, Inc.brian.dorcey@SGS.comt +1 858 592 7100 ext. 260

3 GSC-15 Standards Collaboration Beyond Crisis

GOST-R Certification Mark.

animal drug residues - do you know what’s in your food produCt?

page 8industry news - food

Animal husbandry is reliant on effective drugs. Pharmacological treatment to prevent or cure animal diseases is not only important from a financial aspect; it is also part of the responsible care for animals. But when animals are kept for human consumption, drug residues can enter the food chain and this can pose risks to consumers.

Modern farming relies heavily on veterinary drugs to prevent food-producing animals from contracting diseases and to reduce feeding times. In many of the largest meat-producing countries various types of veterinary pharmaceuticals such as antimicrobials, anti-inflammatories and hormones can be lawfully used to facilitate animal growth and health.

However, incorrect use of even legal doses of such substances, without allowing for adequate withdrawal times, as well as the administration of doses above regulated levels may lead to the introduction of drug residues into the food chain. The fact that almost half of all animal drugs used world-wide are feed additives1 reflects the importance that medicinal compounds play in what consumers eat.

effeCts on human health

The consumption of antibiotic residues with food can have adverse effects on consumers due to the various degrees of toxicity of such substances. The ingestion of animal drug residues has been linked to increased drug-resistance of bacteria that cause human diseases. In an attempt to minimise these effects, the European Union has, since 1988, banned imports of animal products from countries that allow the use of growth agents in animal rearing.

The presence of animal drug residues is under strict regulation worldwide. Regional and international organizations such as the Codex Alimentarius Commission are working towards the harmonization of national legislations on chemical residues in food, through the introduction of specific statutory limitations2.

In several countries control systems are now in place to monitor food-producing animals for the presence of illegal drug residues or residues of legal drugs but in concentrations above internationally accepted levels. These systems generally enforce a control on the use of veterinary drugs and monitor the required withdrawal periods to ensure enough time has passed between the administration of pharmaceuticals and animal slaughter. The third control method is the use of comprehensive lab analyses of animal product samples to identify the presence of drug residues.

produCers’ responsibilities

Whether you produce, process, import or export animal-based food, legislation obliges you to comply with

the permitted maximum limits. Farmers and producers need to keep accurate treatment records for all animals and use drugs in accordance with their labelling and prescribed doses. Adherence to the required withdrawal times is also crucial.

As a producer it is highly worthwhile that you ensure that the animal-based food you produce, process or import contains no drug residues. With governments having controls systems in place at various levels along the food chain, consumer safety as well as your profits, track record and brand depend on it.

SGS has the resources to effectively help you through:

extensive competence in the area of animal drug analytics

knowledge database of regulations applicable to the various types of food products in each market.

SGS food safety labs are able to determine individual substance groups and are accredited to perform LC-MS/MS (liquid chromatography & mass spectrometry) analysis processes. SGS experts can reliably determine the maximum residue levels for various pharmacological substances in animal food products.

The scope of our analysis spectrum allows you to offer your customers the assurance that your food meets all statutory requirements. Associations or consumer protection organizations can also use our results for their monitoring strategies.

Find out more about SGS Food Safety Services

Rainer Hofmann Laboratory ManagerSGS INSTITUT FRESENIUS GmbHrainer.hofmann@sgs.comt +49 761 296 48 24 ext.1051

1 Food Safety Concerns of Veterinary Drug Residues in Meat and Meat Products2 Codex Guidelines for Design and Implementation of Programmes Associated with Use of Veterinary Drugs

page 9

why deCeptive food paCkaging will harm your business The primary goal of food packaging is to preserve the quality and safety of food items until they reach consum-ers’ hands. However, food manufacturers also use packaging to present their products in an appealing way, while consumers rely on packaging to help them make the best buying decision. Do you know where the line is drawn between attractive product presentation and deceptive packaging?

Packaging for all types of food products has to meet specific quality requirements, prescribed by relevant national or international regulations. Knowing the specific packaging requirements for your food product is essential to ensure the product’s market success and to avoid issues with authorities and consumer organizations.

striCt regulations in plaCe

In Germany, PTB (Physikalisch-Technische Bundesanstalt) is the government authority responsible for performing verifications of packaged goods, in accordance to the Verification Act (Eichgestz)1. A central requirement of the Verification Act is for packaged products to be designed and filled in such a way that they do not appear to contain more than is in the package.

Besides the Verification Act, regulations such as DIN 55540 stipulate specific requirements for the packaging of powdered, granular and grain products, which includes guidelines for designing containers such as plastic cups and outer packaging, for example boxes and tubes. Similarly there are other standards/guidelines and pieces of legislation present for packages containing baked goods or chocolates.

Packaging for fresh fruit and vegetables sold in the European Union is covered by specific EC marketing standards. Council Regulation (EC) 2200/96, with new implementing measures published in Council Regulation (EC) 1580/2007, presents the correct packaging procedures and the permissible special presentation methods2.

industry news - food

Similarly, for the US market, FDA (the Food and Drug Administration) is enforcing packaging requirements prescribed in Sec. 403. [21 USC §343] of the Federal Food, Drug, and Cosmetic Act (FD&C Act)3. In addition, the Federal Trade Commission supervises eco packaging claims made by manufacturers, to ensure that such claims apply to most of the packaging and not only the minor parts of it.

know all there is to know

Food manufacturers have to constantly be up to date with the packaging regulations that apply to their products. As a food manufacturer or importer, voluntary or involuntary use of deceptive packaging techniques, such as downsizing, slack filling or over-packaging, indented bottoms, extra walls and unnecessary empty spaces will likely harm your business. Violations against packaging regulations

will cost you a lot in any marketplace. This is not necessarily because of fines imposed, but more importantly because of the damage caused by recalls, new packaging production costs and wasted marketing resources. And if your deceiving packaging manages to reach shelves it will likely manage to dent your reputation in the eyes of the consumers.

If at times it might seem hard to stay on top of all the regulations that apply to your products and their packaging, third party organizations can help you reach full compliance. SGS has the food packaging knowledge and experience to advise you in selecting the most appropriate type of packaging. Our experts can examine your packaging’s compliance with applicable legislation before you have it manufactured. The SGS packaging services allow you to:

Determine the regulations and guidelines which are relevant for assessing your packaging.

Determine the total volume and the slack fill of packaging using water displacement / mathematical calculations.

Obtain a test report and an evaluation of results.

Obtain assistance with developing your food packaging.

Find out more about SGS Food Safety Services

Eveline BinderRegulatory Food ConsultantSGS INSTITUT FRESENIUS GmbHeveline.binder@sgs.comt +49 6128 744 283

1 PTB Verification Act2 (EC) No 2200/96 on the common organization of the market in fruit and vegetables3 Section 403 - the Federal Food, Drug and Cosmetics Act

page 10industry news - hardlines

e-toy market Continues to growGrowth in the toy industry is being driven by the popularity of electronic toys (e-toys). Even though the current financial climate has not significantly reduced spending on toys, it has prompted consumers to choose products more carefully than ever.

Despite recent economic challenges, figures show that the toy industry is generally in good shape, with international toy markets growing by 4% in 20091. Moreover, industry forecasts show the international toy market as a whole will continue to grow in 20102. E-toys are central to this market growth. Supplying the high demand for e-toys has now become the central focus of the major toy exporters, including China3.

Changing age demographiCs drive demand

Increasing demand from children, from parents, and from adult consumers is, in each case, contributing to the growth of the e-toy market. Industry reports are showing that children have an increasing preference for e-toys

over traditional toys, putting traditional toy manufacturers in a challenging position. This is especially true for “kids aged 12 or above”, who “easily turn to non-traditional playthings such as video games, computers, music, cosmetics, etc.”4. The younger end of the toy market is also changing, and manufacturers respond by gradually introducing more e-toys designed to encourage creativity at a young age and to stimulate early skills development. As parents fund most toy purchases, parental preference for educational e-toys is having a significant market impact. The Toy Industry Association (TIA) reports that interest in educational e-toys has been a key emerging e-toy trend in 20105.

adult Consumers Contribute to e-toys growth

Demand for e-toys from adult consumers represents a new market frontier. In some e-toy markets, notably Japan, the population is aging. To continue to grow in these markets, manufacturers are seeking to offer toys that will be of interest to adults. E-toys are well suited to fulfill this need. In addition to increasing demand, growth in the production of e-toys is arguably being propelled by lower component prices and faster rates of product development.

safety, Quality driving Consumer ChoiCe

In response to these market challenges, many manufacturers of traditional toys are now merging the traditional with the electronic, leading to increasingly blurred lines between e-toys and traditional toys. This means that producers from across both industry sectors must now more than ever ensure that the products they deliver meet the applicable toy safety and quality standards. Despite the current economic climate, parents have

not significantly reduced their level of spending on toys, but are putting more thought into their purchasing decisions. While consumers place an emphasis on value, they are also concerned about product safety. According to a 2010 TIA report, “toy safety is the number one priority for the toy industry”6.

rigorous testing is key

Given consumer, industry and regulatory emphasis on safety and quality, even with the most well thought out and robust product designs, it is in the best interest of toy producers to ensure that their E-toys are rigorously tested for compliance with applicable legislation.

Depending on the end market, e-toys are covered by various regulations, including the Consumer Product Safety Improvement Act of 2008 (CPSIA) in the US and the new European Toy Safety Directive 2009/48/EC. Wherever they are produced, e-toys generally have to undergo various types of electrical safety tests as well as electromagnetic compatibility (EMC) and Radio & Telecommunications Terminal Equipment (R&TTE) Directive testing. The RoHS Directive and other RoHS-like regulations are also applicable to e-toys.

With state-of-the-art toy testing labs located both in the major toy manufacturing countries and also close to the largest toy markets, SGS has the network, knowledge and tools to help e-toys manufacturers throughout the entire product development process, ensuring compliance with applicable regulations and supporting logistical processes, all the way from the factory to the retail shelf.

Fred Mills-WinklerTechnical Director ToysSGS U.S. Testing Company, Inc.fred.millswinkler@sgs.comt +1 973 575 5252 ext. 22038

1 Toy Markets in the World 2009 2 Toy Markets in the World 2009 3 Global and China Toy Industry Report 2010 4 Profiles of HK Major Manufacturing Industries5 2010 Toy Trends Get Straight “A’s”6 2010 Toy Trends Get Straight “A’s”

page 11industry news - hardlines

new rules for the eu CosmetiCs market Starting from 11 July 2013, players in the cosmetics industry will be obliged to comply with the new Cosmetics Products Regulation, EU Regulation 1223/2009, which is replacing the Cosmetics Directive 76/768/CE. The new regulation is intended to consolidate an internationally acknowledged European Cosmetics management system which aims to strengthen product safety in the light of new technological developments.

The main objectives of the new regulation, which simplifies the earlier Directive, are eliminating legal issues and incoherences, removing any interpretation issues resulting from translations into national legislations, and ensuring that cosmetics available on the EU market are safe.

Some elements of the old Directive, such as the definition of a cosmetic product, the principles of cosmetic product safety, the regulation of certain substances on positive/negative lists and the surveillance responsibilities of EU states have remained unchanged. So has the ban and strict monitoring regime aimed at putting an end to animal testing.

So how is all this affecting manufacturers, distributors and consumers? The new regulation has brought more clearly defined roles to those of the parties involved in the cosmetics production and distribution – the manufacturers, importers and distributors. The regulation also affects companies who are in the cosmetics business, but are not necessarily cosmetics manufacturers. Importers and distributors now have responsibility for products they place on the market or under their name or trademark.

no safety report, no market aCCess

Given that the new regulation will only fully come into effect in 2013, companies can still conform to the current directive, but they will be required to provide a cosmetics report regarding the safety of their products as soon as the new directive kicks in. The goal of this legal reinforcement is to push for extensive analyses of

products on the market in order to scientifically verify product safety claims. EU surveillance authorities, such as AFSSAPS and DGCCRF in France, as well as customs agents will control cosmetics products before allowing them to enter EU markets and they will request the complete cosmetics report which will need to include a safety assessment.

This safety assessment has to be conducted by a toxicology, pharmacy or a similar degree graduate or by an expert who has an equivalent background recognised by an EU member state. The importer or distributor has the obligation to notify the relevant EU member state authorities and poison control centres about the side-effects of certain substances by using an up-to-date electronic portal.

In conclusion, the new regulation clearly defines the responsibilities and legal obligations of the parties involved; it introduces a centralised, electronic communications system between the relevant authorities and creates and reinforces regulations that apply to non-compliant products. This can only prove helpful to consumers, as the safety assessment will mean that there will be a much higher chance that a product available on the market will be free of harmful side-effects.

stay on top of market entry reQuirements

SGS has created a new cosmetics team that brings together knowledge and experience from all industries related to cosmetic products. The team aims to provide comprehensive, streamlined

services through a single, knowledgeable contact for each client. SGS can also provide support with compiling the cosmetics safety assessment with the help of EUROTOx-certified toxicologists.

Find out more about SGS Cosmetics Solutions.

Carine DumasSales Engineer for Cosmetics and Personal & Home CareSGS Francecarine.dumas@sgs.comt +33 1 41 24 86 62

page 12industry news - softlines

outdoor industry takes the lead on sustainability Globally, in order to adapt to future resource shortages, regulations on sustainability and consumer awareness, the outdoor and sportswear industry has been working on cutting edge developments to improve the sustainability of its brands. The outdoor industry is in a prime position to lead the market, due to the traditional focus on product functionality, technical aspects, quality and longevity, as opposed to fast and disposable fashion.

Timberland introduced the “Green Index” back in 2007 a measure of the environmental impact of their products, with the goal of providing consumers with clear information regarding the environmental footprint created by their business. Nike has developed an apparel index – a tool to help guide product development teams to make better environmental choices for all their products. The outdoor industry trade associations, the European Outdoor

Group (EOG) and the Outdoor Industry Association (OIA) in USA, have recently been working on developing an apparel industry standard index, the Eco-index, that can be applied to all outdoor wear and gear, and eventually to other textiles products and sports equipment.

life CyCle approaCh to sustainability

The Eco-index tool, currently in phase 1 of development, and due to be completed in its initial stage by the end of 2010, allows companies to start to assess the environmental stainability of their products throughout the whole product life cycle. The tool at this point is internal-facing, meant to drive improvements through the supply chain, as opposed to being a consumer-facing ecolabel.

The starting point is a set of guiding principles covering the ecodesign of products and packaging, and the implementation of improvements in facilities. Qualitative indicators are then provided, giving an overall score per product for each life cycle step, against a range of environmental indicators such as: incorporation of recycled or certified materials, reduction in components, restriction of chemical substances, and ensured recyclability at end of life. Eventually, when the Index is complete, each major environmental impact identified, e.g. water, GHG emissions, toxicity and others, will have a specific associated quantitative metric, coupled with an outline methodology on how to determine the measure. For Phase One, only Water, Waste, Energy and GHG are in scope for full metrics footprinting. Although a complete set of footprinting tools is not provided, the index provides standards recommendations as well as links to associated tools and resources.

what Can you do?

The initiative is currently running a pilot programme which encourages businesses to test the tool using simple metrics, including practicing the application of the Index using a generic bill of materials (BOM) and applying the index in more detail to a company’s products. The tool will provide a good introduction to companies starting out on the ecodesign process, as it offers a set of high level environmental guidelines as well as techniques for simple qualitative product analysis. The index is intended to have a global reach, with the aim of ensuring a common worldwide approach along with application of the index to other industries and sectors.

support with the eCo-index

The index will also include a tool on Standards and Regulations, allowing users to filter through the maze of existing standards and use the most appropriate ones. The SGS sustainability team has been involved in the working groups for the Eco-index, specifically for the tool on Standards and Regulations. SGS is also working with the Outdoor Group assisting with training and on aspects of validation of the different points of the index. When it comes to quantitative metrics for environmental factors, such as GHG emissions, SGS can also assist through its expertise in carbon footprinting, through either training, assessment or verification.

Learn more on the Eco-index or contact SGS for help with ecodesign projects.

Bethany MurraySustainability ConsultantSGS UKbethany.murray@sgs.comt +44 203 008 7866

page 13sgs in the news

sgs- tÜv gmbh partiCipated in eCarteCh Held in Munich, between October 19-21, EcarTech is an international trade fair on Electric Mobility, showcasing electric vehicles, storage technologies, power train and engine technology and also covers the themes of energy, infrastructure and financing.

The electro-mobility domain opens up the possibility of coming significantly closer to the claim of sustainable mobility. SGS-TÜV GmbH – company of the SGS group and TÜV Saarland e.V. (hereafter referred as SGS-TÜV GmbH) provides, as an accredited partner, support in all the domains of electro-mobility and functional safety. In all probability the future will be driven electrically. Whether it is an E-bike, a

sgs institut fresenius gmbh exhibits again at the semiCon europe SGS INSTITUT FRESENIUS GmbH exhibited at the Semicon Europe in Dresden from 19 to 21 October 2010. This year SGS focused on showcasing its microelectronic and photovoltaic testing services.

Semicon is recognized as one of the most important specialist trade fairs for semiconductor products and services. As one of the leading providers of test and analytical services for the semiconductor and photovoltaic industries, SGS INSTITUT FRESENIUS GmbH is able to

hybrid vehicle or electric car, the safety of these vehicles has the highest priority. This means the areas of functional safety, battery safety and the electrical safety of the drive are becoming increasingly important. SGS-TÜV GmbH can identify different safety risks and weak spots, providing support in all product development phases.

Find out more about SGS- TÜV GmbH e-mobility services.

provide a wide range of cross-industry solutions. For the photovoltaic industries SGS can now provide module testing as well as certification according to IEC 61215, IEC 61646, IEC 61730 1-2, IEC 61701. For more info contact: ines.alte@sgs.com

SGS Thailand organized free public seminars titled “REACH and RoHS II Update” in Chonburi on 12 October and in Ayutthaya on 15 October 2010.

The approximately 250 participants that joined the seminars were professionals

sgs thailand holds free publiC seminars on reaCh and rohs ii

from the Electronic & Electric and Auto industries, including OEM and suppliers. The speaker at both events was Ms. Laddawan Urantpitr, RSTS Manager for SGS Thailand. Attendants were keen to know more about the latest updates on REACH and RoHS regulations. Clarification of issues regarding certain

additional SVHC lists that are to be launched in the near future and of the RoHS II date of arrival were useful for participants. SGS Thailand can support businesses with their preparation for a wide range of new market requirements.

For more info contact: pornpana.lirathpong@sgs.com

sgs-tÜv gmbh - 2011 funCtional safety training and QualifiCation programmeThe new training programme of SGS TÜV on Functional Safety is now available online. Through the SGS TÜV web site anyone

interested in this field can find numerous training opportunities on current topics of Functional Safety. This is the most extensive and most in-depth training programme available on the market.

In addition, SGS TÜV offers a personal qualification programme for“Automotive Functional Safety Professionals (AFSP)“ or Experts (AFSE). Find out more details about the Functional Safety Programme.

page 14

sgs attends maJor sustainable fashion event in londonThe seminar, organized by the RITE Group, was held on 6 October 2010. The RITE (‘Reducing the Impact of Textiles on the Environment’) Group, formed in 2007, is essentially a platform for sharing ideas and innovations in relation to sustainable textiles.

sgs in the news

sgs bioserviCes & reaCh teamextends serviCe portfolioThe marketing of a consumer product is often dependent on specific hygiene & functional characteristics and fittings that form the basis of your marketing campaigns.

In SGS tailor-made practical simulation experiments, consumer products and system characteristics such as weak-points, ageing behaviour and worst-

case-scenario can be analysed. Under the key methodologies of microbiology, molecular biology, biochemistry, and hygiene the SGS BioServices Team offers standardized and individually tailored test methods. These can be used for regulatory accreditation purposes as well as for testing the efficiency of various types of products (eg. shavers, tooth brushes, refrigerators, coffee brewers, air handling units, water conditioning modules).

The event, sponsored by Tesco, showcased some recent technological innovations in sustainable textiles production, touched on the likely future of fashion in relation to sustainability, and debated issues such as cost versus sustainability. The theme of the event was ‘Shaping tomorrow’s industry’ and Forum for the Future set the scene by quoting research on factors that will impact future consumer behaviours.

SGS attended this conference to keep up-to-date on sustainability issues in the textiles sector in order to be ready to inform its clients, and SGS also exhibited at the event to showcase its range of sustainability services for the textiles sector, including life cycle assessment and the certification standard Bluesign.

For more info, contact: bethany.murray@sgs.com

sgs sponsors “engaging suppliers in sustainability 2010” ConferenCe

Held in London, UK, between 9 -10 November, the conference provided an opportunity for companies to question themselves about how they engage their suppliers in their sustainability agenda and to focus on the business processes involved.

During this two-day event, SGS Global Sustainability Director, Charles Ly Wa Hoi explained how companies can combine sustainability assessment with existing supplier assessment. He also discussed ways to point out to suppliers how their support on sustainability issues will be rewarded.

Find out more about the information presented at the conference.

It is part of the SGS philosophy to actively chaperone your product development process from an early stage and further along the production, marketing and recycling/disposal phase. Here the BioServices Team can help to close some gaps.

Find more info contact: ralph.weyandt@sgs.com.

page 15sgs in the news

sgs issued its first produCt Carbon footprint (pCf) labelOn October 22, 2010, Zhangzidao Fishery Group received the first SGS Product Carbon Footprint (PCF) label for its scallops.

Zhangzidao is the largest company of bottom-cultured seafood in China and the SGS PCF label will help promote the green image of Zhangzidao. Through the

application process for the PCF label, Zhangzidao Group underwent a full assessment of carbon dioxide emissions from scallops over their lifetime. The label gives the number of grams of carbon dioxide per 1kg of product, produced over the entire product life-cycle.

Find out more about the SGS PCF label.

sgs attends China international food safety & Quality ConferenCe

SGS Turkey was pleased to announce in May 2009 the launch of its toy lab. Accredited by UKAS, the lab has also been notified by the Turkish authorities in 2010.

sgs turkey is eu notified body for toys

Key personnel from SGS’s Food Safety division have been selected to speak at the China International Food Safety & Quality Conference held between 10 - 11 November, in Shanghai. The conference is designed to facilitate collaboration

America (FDRA) in Dongguan, China.

This workshop offered participants an opportunity to find out more about new and emerging trends in the field of Compliance, Restricted Substances, Product Testing and Factory Security.

SGS Asia Technical Service Director, Dr. Jane Jiang, was one of the speakers to participate in the panel, where discussion focussed on chemical safety and global chemical regulations. Find out more on SGS services for footwear production.

Having the notified body status under the Toy Safety Directive gives SGS Turkey a special role in ensuring the safety of toys under the so-called EC type examination procedure. Experts at SGS Turkey help control the quality and safety of toys

imported to Turkey. They can assist clients in providing interpretation of local and European regulatory requirements and ensuring full compliance of toys.

For more info, contact: banu.senel@sgs.com.

sgs in footwear faCtory training series On 4 - 5 November, SGS sponsored the Overseas Labor Practices (OLP) workshop of Footwear Factory Training Series by The Footwear Distributors and Retailers of

on efforts to improve food safety and to better protect consumers.

Rob Parrish, Vice President, Global Food, served a keynote panel discussion titled “How to Strengthen Confidence in the Safety of Food: The Challenges of Communicating the Effectiveness of Efforts by Producers, Processors

and Regulators.” Michael Zhu, SGS Director of Food in China, gave a solo presentation called “Beyond Compliance: Building a Safe and Sustainable Food Supply Chain.” SGS provides a full suite of food safety services to help safeguard quality and safety as well as assist in sustainable development throughout the whole food supply chain.

page 16

safeguardsSafeGuards, are SGS technical bulletins concentrating on new product standards, regulations and test methods. They are written by SGS experts and dispatched on a weekly basis. Below you can find a selection of SafeGuards titles from the past weeks. TO STAY ON TOP OF ALL REGULATORY CHANGES WITHIN YOUR INDUSTRY subscribe to the SafeGuards technical bulletin.

safeguards

Consumer produCts Non Governmental Organizations Join Forces to Follow Up on REACH

Requirements - read the bulletin

UK Ministry of Justice Launches Consultation on Bribery Act 2010 - read the bulletin

eleCtriCal & eleCtroniCs Recast of EU Energy Labelling Directive Extends to New Industries, Product

Types - read the bulletin

Safety of Lithium-Ion Batteries in Mobile Communication Devices - read the bulletin

food New EU Regulation for Aflatoxin Level in Foodstuffs - read the bulletin

Implementation of the Menu Labeling Provisions - Affordable Care Act - read the bulletin

hardlines California Regulates Total Cadmium in Children’s Jewellery - read the bulletin

New EU Toy Safety Directive 2009/48/EC Guidance Document for Packaging - read the bulletin

softlines Cadmium Ban May Extend to Textile Products - read the bulletin

UK FFR Aligned – Official - read the bulletin

Browse the SafeGuards library: www.sgs.com/safeguards

SGS compiles recall cases notified in the EU, US and Australia for consumer goods. They can help you minimize costly recalls by increasing your awareness of recall cases related to your business. SGS Product Recalls is now offered for no charge, and is included twice per month in the SGS SafeGuards publication.

Browse the Product Recalls library: www.sgs.com/productrecalls

Subscribe to SafeGuards to receive Product Recalls publication.

produCt reCalls

get them when they Come out!

Subscribe to “Consumer Compact”, and “SafeGuards & Product Recalls”

To subscribe click here.

subsCriptions

for enQuiries

Please contact:consumer.products@sgs.com

© 2010 SGS SA. All rights reserved. This newsletter is a publication of SGS SA. It is intended to provide general information on a particular subject or subjects and is not an exhaustive treatment of such subject(s). Accordingly, the information in this newsletter is not intended to constitute consulting or other professional advice or services. This newsletter is provided “as is” and SGS SA does not warrant that the information contained therein will be error-free or will meet any particular criteria of performance or quality. SGS SA expressly disclaims all implied warranties including, without limitation, warranties of merchantability, title, fitness for a particular purpose, non-infringement, security and accuracy. The information may not be quoted or referred to in any other publication or proceeding without the prior written consent of SGS SA.

ContaCts

ameriCas

SGS US TESTING SERVICES291 Fairfield Ave, FairfieldNew Jersey 07004Tel: +1 973 575 5252Fax: +1 973 575 7175E-mail: marketing.cts.us@sgs.com

asia

SGS HONG KONG LTD.5-8/F & 28/F, Metropole Square,On Yiu Street, Siu Lek YuenShatin, N.T. Hong Kong, SARTel: +852 2334 4481Fax: +852 21447001E-mail: mktg.hk@sgs.com

europe

SGS S.A. SGS UNITED KINGDOM LTD.Saunders House,52-53 The MallW5 3TA Ealing, London United Kingdom Tel: +44 (0) 203 008 7860Fax: +44 (0) 203 008 7870E-mail: gb.cts.sales@sgs.com

middle east

SGS SGEKS A.S. ABIDE-IHurriyet Cad. GecitSk. No.10 Sisli Istanbul, TurkeyTel: +90 212 368 40 00Fax: +90 212 296 47 82/83E-mail: sgs.turkey@sgs.com

australia

SGS AUSTRALIA PTY.LTD10 Reid Road, Perth International Airport,Newburn WA 6105, AustraliaTel: +61 1300 765 725 Fax: +61 8 9373 3556E-mail: au.cts@sgs.com

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regional ContaCts

editorial team

Jennifer Buckley - FOOD

Silke Hilmer - ELECTRICAL & ELECTRONICS

Stéphanie Meyer-Pionchon - HARDLINES

Susanne Sun - SOFTLINES

Swati Tyagi - AUTOMOTIVE

Emilie Viengchaleune - SUSTAINABILITY

www.sgs.Com/Cts

www.sgs.Com

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