Regulatory Impacts An August 2024 survey of PPAI 100 firms revealed that 34.8% of suppliers and 31.3% of distributors say they are “significantly impacted” by recent compliance regulations. Rising costs were perhaps the most substantial burden cited by those respondents, highlighting the growing financial impact of meeting regulatory standards. The majority of PPAI 100 companies reported grappling with rising compliance costs over the past year, with 56.3% of distributors and a whopping 86.9% of suppliers experiencing an increase in expenses for certifications, audits, sustainability measures, legal fees and other compliance activities. Compliance Challenges Navigating costs, complexity and change pose significant challenges for PPAI 100 suppliers and distributors alike. Frequent regulatory updates, increasing costs and complex regulations were the main challenges noted by this group, with resource and skills gaps further complicating compliance efforts. • Regulatory changes: 95.7% of suppliers and 64.3% of distributors said they struggle with keeping up with changing regulations. • Costly compliance: 60.9% of suppliers and 64.3% of distributors said they face high compliance costs. • Unclear rules: 73.9% of suppliers and 50% of distributors said they find regulations complex and unclear. Distributors in particular said they struggle with access to compliance resources and personnel. More than a third (35.7%) of distributors in the PPAI 100 survey reported limited access to compliance resources and said they lack skilled compliance personnel. Knowing Is Half The Battle For distributors and suppliers alike, regulatory awareness is an essential first step toward compliance, but the pace of change can make it difficult to stay on top of current requirements. Results of the broader member survey in the fall reveal a knowledge gap across the industry (see Figure 1): • Fewer than 1 in 5 (19.6% of distributors and 13.3% of suppliers) reported feeling “very familiar” with current or upcoming regulatory changes, leaving a significant portion of the industry vulnerable to compliance risks. • While a larger segment (42.3% of distributors and 40% of suppliers) reports feeling “somewhat familiar,” 30.9% of distributors and 36.7% of suppliers describe themselves as “not very familiar” or even “not familiar at all.” These numbers underscore a critical need for accessible, up-to-date information to help promo firms stay compliant. PPAI has expanded its commitment to providing timely, accessible information to all members through its research and media team to help members bridge this gap and empower them to make informed decisions and maintain operational compliance. “As regulatory demands grow more complex, proactive compliance isn’t just about following rules – it’s about ensuring long-term resilience and competitiveness for our members,” says Alok Bhat, market economist, research and public affairs lead. “By providing timely insights and strategic resources, we’re helping firms navigate these shifts with confidence.” FIGURE 1: How familiar are you with currently proposed or soon-to-be-effective regulatory or legislative changes (e.g., environmental, trade, data privacy, labor, etc.) that impact the promotional products industry? Distributors Suppliers Very familiar 19.6% 13.3% Somewhat familiar 42.3% 40% Not very familiar 31.2% 36.7% Not familiar at all 6.9% 10% “The increased cost, supply chain delays and budget adjustments due to future trade tariffs and import restrictions will be the key adverse impacts on our business in general for the next four years,” Sanjay Kotia, MAS, manager of product compliance and quality assurance for SnugZ USA Listen Up Must Read | Legislation and Compliance 30 • JANUARY 2025 • PPAI
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