Regulatory Issues for a Sustainable Candle Industry

1. Regulatory Issues for a Sustainable Candle Industry Rob Harrington, Ph.D. Director, Regulatory and Safety Blyth, Inc. April 17, 2008

2. Regulations and Regulatory Issues Facing the Industry • Regulations • Consumer Product Safety Commission (CPSC) • Federal Trade Commission (FTC) • ASTM, Proposition 65 • International Equivalents • Regulatory issues • Consumer Product Safety Act • Phthalates in fragrances and air care products • California consumer product air regulations

3. CPSC Regulations • No specific labeling requirements for candles • Companies must notify CPSC if a product is defective or presents an unreasonable hazard • Most CPSC enforcement actions and fines are a result of a company failing to notify CPSC of a product hazard/defect • CPSC has procedures in the event a product needs to be recalled

4. Consumer Product Safety Act(Section 15(b)) Every manufacturer of a consumer product distributed in commerce, and every distributor and retailer of such product, who obtains information which reasonably supports the conclusion that such product— (1) fails to comply with an applicable consumer product safety rule or with a voluntary consumer product safety standard (2) contains a defect which could create a substantial product hazard or (3) creates an unreasonable risk of serious injury or death,

5. Consumer Product Safety Act (Section 15(b)) - con’t SHALL... immediately inform the Commission of such failure to comply, of such defect, or of such risk, unless such manufacturer, distributor, or retailer has actual knowledge that the Commission has been adequately informed of such defect, failure to comply, or such risk.

6. Recall procedures • File an initial report with CPSC immediately (provide the manufacturer, product, defect, assessment of the risk of injury) • File a full report when the information is available • CPSC makes a preliminary determination • Companies may instead do a “fast-track” voluntary recall • For information, consult the CPSC recall handbook at http://www.cpsc.gov/BUSINFO/8002.html

7. Recall procedures (con’t) • Develop/submit a corrective action plan • Determine the defect and cause • Determine how many and the location of the products • Method of notification to retailers and customers (letters, notices at point of sale, TV/radio) • Refund/replace/repair? • Provide information and company contact (toll free number, website, address) • Periodic reports to CPSC on progress

8. Federal Trade Commission (FTC) • Regulates label information through the Fair Packaging and Labeling Act (FPLA) • Product Identity • Net contents • Manufacturer’s name and address • Regulates advertising claims

9. Identity Statement • Must be on the Principal Display Panel (PDP - that part of a label that is most likely to be displayed, presented, shown, or examined under normal and customary conditions of display for retail sale • Should be the principal feature of the label • Must be generally parallel to the base • Must not be false, misleading or deceptive

10. Net Content Statement • Must be on the principal display Panel (PDP) • Must be expressed in terms of quantity, size, weight or a combination thereof • Must be expressed in both English and metric units (ounces and grams or inches and centimeters) • Jar candles normally expressed in oz./g • Pillars expressed in in./cm height and diameter • Tapers and irregularly shaped expressed in in./cm height • Tealights normally sold by quantity • Must be in bottom third of the PDP label, parallel to the base and has minimum font size requirements

11. Manufacturer Name & Address • Can appear conspicuously on any surface • Should include the street address, city, state and zip code (street address is not needed if the company appears in a phone book or city directory) • Can use “Distributed by ___” or “Manufactured for __” instead of the actual manufacturer’s name if the statement is accurate

12. Advertising Claims • Includes labels, catalogs, print/broadcast media • “You are what you claim” and are regulated by what you claim to be. • Advertising claims enforced by the FTC, State’s Attorneys General, the National Advertising Division of the BBB and private lawsuits

13. Claims (con’t) • Must be truthful, accurate and supported by reasonable information • May be required to generate test data to support some claims • Must be scientifically and statistically sound

14. Environmental Claims • Claims should be clear and specific to the product, package or both. • Claims must not be overstated • Avoid vague and general environmental claims; these would be assumed to apply to everything associated with the product • Must be able to clearly substantiate the claim with data

15. Environmental Claims • General statements like “Environmentally friendly” must be fully explained or qualified or the product have must have virtually no environmental issues • EXAMPLE: Cannot state “Environmentally friendly” if it is biodegradable but toxic to the environment • EXAMPLE: Cannot state “Environmentally safe” if it is non-toxic but generates VOC’s or hazardous products that harm atmosphere • See 16 CR 260 for additional guidelines

16. Recyclable • The product must be able to be recovered from a waste stream • Facilities to recover the material must be readily available to most consumers • Should specify what part of the product is recyclable (package, product, specific part) • May require substantial qualification of claim

17. Recycled Content • Unqualified statement of “recycled’ means that the product is 100% recycled • Should specify if the recycled claim is referring to the product package or both • The recycled content refers to materials that were recovered from a waste stream • http://www.ftc.gov/bcp/conline/pubs/buspubs/greenguides.pdf

18. Means the entire product is 100% recycled and is recyclable Means that the product is 100% recycled but not necessarily recyclable Recycled Means that the product is only XX% recycled but Is not necessarily recyclable XX% Recycled fiber Means the entire product is recyclable but not necessarily made of recycled material Recyclable

19. ASTM Labeling Requirements • ASTM F2058- Standard Specification for Candle Fire Safety Labeling –updated 2007 • The updated warning consists of: /!\ WARNING Burn within sight Keep away from things that catch fire Keep away from children (or the equivalent)

20. ASTM Labeling Requirements • ASTM warning must appear directly on free standing candles (except tealights) and on external packaging (if sold in a box or other package) so as to be visible at point of sale • Font size requirements are based on the size of the panel on which the warning appears • For small candles and all tapers an abbreviated warning consisting of: /!\ Burn within sight (or the equivalent) may be used in place of the full warning • Optional use of pictograms along with the wording

21. Pictograms

22. Small Text Label

23. Text & Pictogram Multi-Language Label

24. Proposition 65 • In 2000, the candle industry was involved with a Prop 65 lawsuit • It was alleged that candles exposed California residents to soot, benzene, lead and other listed chemicals • The settlement required on all scented candles 3.5 inches in diameter or larger to have: “To reduce sooting, you must trim the wick to ¼ inch each time the candle is to be relit. Avoid using in drafty areas.”

25. FDA and Candles • Candles labeled for any personal care application are regulated as cosmetics by the FDA • FDA and CPSC have dual jurisdiction over these candles • These candles must meet FDA cosmetic regulations as well as candle safety and labeling requirements • Must comply with FDA ingredient restrictions, ingredient labeling, warnings, reporting obligations and other FDA cosmetic regulations

27. Canadian Regulations • Requires all text to appear in both English and French except trademarks and manufacturer name/address (so the ASTM warning should appear in French) • In 2003 Canada proposed mandatory labeling and safety requirements • Proposed regulation likely to reappear in 2008 • Bilingual fire safety warnings (different than ASTM) but will allow for equivalent wording • Ban lead wicks • Ban spontaneously re-lighting candles

28. Mexican Regulations • Requires certain information to appear prominently in Spanish (may also appear in other languages) • Identity of the product • Net contents in metric units • Name/address of manufacturer • Country of origin statement • Precautionary statements (like ASTM warning) • Name and address of importer • Directions and instructions (if necessary)

29. European Candle RegulationsFire Safety • EN 15493 “Candles – Specification of Fire Safety” • Stability (10º tilt test) • Secondary ignition • Flame height 3”/75mm (1.25”/30 mm for tealights) • Self extinguish at end of life • No re-ignition or afterglow/smoking more than 20 seconds • Maximum sooting standard

30. European Candle Regulations Labeling • EN 15494 - Candles -Product Safety Label • Never leave a burning candle unattended. • Burn candle out of the reach of children and pets. • Always leave at least X cm between burning candles. • Do not burn candles on or near anything that can catch fire. • Option to use text only, pictograms only or both • Text must appear in the national language where sold • 11 Additional optional warnings/pictograms provided

32. Regulatory Issues Facing the Candle Industry

33. Consumer Product Safety Modernization Act (House)vs. CPSC Reform Act (Senate) • The U.S. House of Representatives and the Senate have very different versions of this bill • Both overhauls many responsibilities of the CPSC • Both increase staff and budget

34. HOUSE Up to $10MM fine AG’s may act against a non compliant product Disclose product data under some circumstances New lead restrictions No whistleblower provision included SENATE Up to $20MM fine AG’s may act against any product they deem unsafe Establish a searchable database on website with all injury reports New lead restrictions Whistleblowers given protection; can sue CPSC Act

35. Phthalates • Phthalates are a class of chemicals used for many things including softening plastic and dissolving fragrances • Some phthalates have been shown to cause cancer and reproductive effects • NRDC conducted a “study” on air fresheners and alleged dangerous levels of phthalates in products • NRDC Petitioned EPA and CPSC to require submission of data, extensive product safety testing, labeling and formula disclosure (9-19-07)

36. FOR IMMEDIATE RELEASE New Study: Common Air Fresheners Contain Chemicals That May Affect Human Reproductive Development Environmental Group Calls for Additional Testing, Consumer Awareness to Prevent Risky Exposure NEW YORK (September 19, 2007) – An analysis of more than a dozen common household air fresheners found that most contain chemicals that may affect hormones and reproductive development, particularly in babies, the Natural Resources Defense Council (NRDC) said today. The federal government does not currently test air fresheners for safety or require manufacturers to meet any specific safety standards. The study offers both consumers and officials new information on the risks certain air fresheners pose.

37. Phthalates (con’t) • EPA denied all aspects of the petition across the board • EPA requested voluntary disclosure of some information on fragrances and air fresheners by the 7 companies cited in the petition • EPA, industry members and NRDC (and other environmental groups) are involved in dialogue • Candles were specifically mentioned in the EPA/CPSC petition, but have not been discussed as part of the phthalate or fragrance dialogue with EPA

38. California Air Resources Board • Regulates volatile organic compound (VOC) emissions from consumer products • Currently seeking to significantly reduce VOC emissions from air fresheners • Candles have escaped these regulations • CARB has expressed concerns about normal candle emissions and safety • Fragrance formulations in air fresheners are under close scrutiny and are the subject of enforcement actions • AB-32 Greenhouse gas emissions issues?

39. QUESTIONS? Rob Harrington Rharrington@blyth.com