New report notes more product recalls
Marsh, leading risk and insurance services firm, has published a new report “Managing liability in the food and beverage sector” saying that regulators are now faster to withdraw products from the market.
The report, which surveyed 232 companies in the food and beverage sector across Europe, drew the conclusion despite noting that food and beverage contamination was rare. Greater scrutiny from the media and regulators as well as heavy enforcement of recent legislation has resulted in increased product recalls.
œEuropean and national regulators have become much more involved with the recall process. The launch of the General Framework Law for Food Safety Regulation in 2005, which stipulates that regulators must be involved at the first sign of a product being unsafe, has resulted in 60% of all products recalls being government enforced. This has created major variations between different countries, says Jeremy Moore, practice leader for cost recoveries at Marsh.
Inconsistency in governments’ product recall and withdrawal strategies across the EU is also creating uneven competition between multi-national companies. In 2004, the Italian government called for a withdrawal of four times as many food products from Italian shelves as the French government.
More recalls will likely create higher overheads, which will pressure companies to cut costs and create a need to find more suppliers outside Europe. œMore media attention and compulsory public notification of withdrawals means the days of the ˜silent recall’ are over, notes Moore. He continues, œCompanies will need to review their product recall insurance policies.