Beware of toy inflation as Hasbro raises prices

Hasbro monopolyBoth Hasbro and Mattel are involved in high-profile lawsuits at the moment, which makes me scratch my head and wonder about the other news coming out about these companies during corporate earnings season.

Hasbro, which is taking on the makers of the Facebook application Scrabulous over copyright issues, just announced that it is raising its prices for the second time this year because of higher production and shipping costs. And legal costs? Surely, the cost of doing this kind of business doesn't need to be passed along to the consumer. Hasbro's profits are actually up for the year, and the stock has gone up 46% in 2008. Iron Man toys are selling briskly, as well as items from the Indiana Jones and Incredible Hulk sequels.

It's likely that Mattel will follow suit, no pun intended. The rival toy company is also tied up in a tricky copyright suit at the moment over the origin of the Bratz doll line. In a weird twist of the case, the proceedings were suspended on Friday because a juror made an ethnic slur against the CEO of the company suing Mattel -- he's an Iranian Jew. Now there may be a mistrial, which is expensive bad news for Mattel, because they had been winning pretty significantly.

As a consumer -- and mom of two who frequently purchases toys -- I would understand more if price increases came because toy companies were putting extra measures in place to insure toy safety. I regularly pay more for toys that are made in the U.S., and I shelled out $85 for a home lead-test kit last summer and test all the toys I buy before I let my kids play with them. If I had any guarantees from Hasbro and Mattel that there would be no more trouble with lead paint and other hazards, I'd happily shell out a little more.

But to pay to keep lawyers and lobbyists on the payroll to sort out who gets the biggest share of profits? That's not on my agenda as a consumer.


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