(Insurance POST) Product quality is essential to business survival, and yet these days it seems recalls are rarely out of the news. Mistakes happen and processes fail often resulting in disastrous consequences to the business and the brand. Given the likelihood that the rate of product recall events will increase, what does the future have in store for us?
The evidence certainly suggests it’s a growing issue. The UK Food Standards Agency (FSA) issued 95 food and allergy alerts in the first six months of 2019, and in 2018 they reported that supermarket recalls were up by 44% compared to the previous five years.
In 2018, Safety Gate, a mechanism that enables 31 countries across Europe to inform each other of products with safety problems, saw a 34% increase in notifications compared to 2008, with toys and vehicles having the highest number of safety notices, with both categories reporting significant increases over the last ten years.
Where did it start?
A large proportion of recalls involve food and beverages, but its origins lie in the automotive industry – in particular, the Ford Pinto car manufactured between 1971 and 1980. There was controversy surrounding the Pinto’s fuel tank design and safety, resulting in Ford issuing a recall for 1.5 million vehicles.
What are the issues?
One of the issues we face is the lack of regulation. Over 40 years since the Ford Pinto issue, there’s still a lack of structure around product recalls. Declaring a recall remains a voluntary action for the manufacturer or producer, so the data that’s collected centrally only gives an indication of the scale of the problem.
If we look at trends in recall events – or ‘repeat offenders’ –it’s allergen related recalls, foreign body contaminations and bacterial pathogen contaminations that are relatively common within the food and beverage industry. Frustratingly, many of these recalls are due to simple failures, such as poor housekeeping or inadequate quality control.
Allergen related recalls are almost always due to cross-contamination, using incorrect packaging or labelling errors. In the first two months of 2019, there were 26 allergen alerts issued by the UK Food Standards Agency. Of those, at least five were due to using incorrect packaging. For the same period in the US, there were seven Food and Drug Administration (FDA) enforcement notices for products that were in the wrong packaging or had errors on the label. In addition, a further 53 products were recalled due to either cross-contamination of allergens or an error on the packaging.
The Brexit effect
Things could get worse following Brexit as dangerous or unsafe cars, electrical goods and toys could flood into the UK after Brexit unless the government urgently reforms the current ‘failing’ safety enforcement system.
Furthermore, when the UK leaves the European Union, we must be ‘recall ready’ and be prepared to deal with customs issues and other difficulties in getting goods across borders in international recall events. This includes having stronger consumer enforcement systems to ensure people are not at risk from unsafe products entering the country and their homes. This would require major domestic reforms to ensure consumer protection.
Post Brexit, product recalls will continue to increase, so undoubtedly it’s going to be more important than ever to have local representation – particularly across Europe – so that any recall programme can be co-ordinated on the ground, when and wherever required.
COVID-19
Perhaps it was inevitable that contamination would be discovered within a major food production facility. Without doubt, all reasonable measures are being taken to prevent this, but the unseen enemy we’re currently dealing with is resilient and adaptable. With still so much uncertainty around the virus’s ability to survive on surfaces and the ease with which it spreads – what this will mean for the food chain remains to be seen.
However, what is certain is that we will constantly face emerging risks that create new challenges – not only for those within our industry – but also for our society as a whole. In order to deal more effectively with this uncertain and growing threat is cooperative, closer monitoring and consistent and open dialogue.
Content originally published September 4, 2020 in Insurance POST.