Lego bets on Pokemon, interactive bricks as war in Middle East threatens higher costs
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As well as energy costs, Lego is navigating tariff volatility due to US President Donald Trump’s moves.
PHOTO: REUTERS
COPENHAGEN – Lego is bracing itself for higher energy and raw material costs as oil and gas prices rise amid a conflict in the Middle East
The Danish toymaker looks to spur growth with interactive “smart bricks” and Pokemon tie-ups, said Mr Niels Christiansen.
Rising oil prices could feed through to the cost of plastics and other inputs over time, Mr Christiansen said, although existing deals the company has meant the effect is likely to be gradual and cushioned.
“If oil prices are going up, that could potentially also impact our raw material prices over time, maybe not in the short term because we have contracts,” Mr Christiansen said. “The real impact is if it stays for a long time.”
The price of Brent crude has surged by as much as 65 per cent since the United States and Israel bombed Iran on Feb 28
Lego managed similar volatility during the Covid-19 pandemic and Russia’s 2022 invasion of Ukraine, he said.
“It’s not very different from what we’ve dealt with over the last five years in that sense. So we’re comfortable that we can manage, but it is just volatility again,” he said.
His comments come as manufacturers globally face renewed cost pressures from higher energy prices and persistent supply-chain uncertainty, especially with the widening war in Iran
As well as energy costs, Lego is navigating tariff volatility after the US Supreme Court knocked down
Lego’s strategy of having production plants close to key markets has helped rein in costs and shield it to a degree from tariffs and supply chain disruptions. It will open its first manufacturing plant in the US in 2027, in Virginia.
“Right now, we are more interested in managing the new tariffs,” he said. “Then we’ll see over time what happens.”
Despite the pressures, family-owned Lego reported growth across all regions and product categories in 2025, with sales rising in the US, Europe and Asia Pacific. China returned to growth in 2025 after two years of flat or declining sales.
Volume growth, rather than price increases, drove performance, Mr Christiansen said.
Lego has no immediate plans to raise prices, focusing on reaching more consumers. The company expects high single-digit revenue growth in 2026.
The toymaker has boosted collaborations with brands such as Formula One and Nike, as well as shows like Bluey and Pokemon. It is rolling out a new SMART Brick, featuring lights, scanners, speakers and sensors. REUTERS
