20% of food and drinks businesses at risk due to lack of recall plan
New research shows that nearly 20% of food and drinks businesses are at risk of losing millions of pounds, as they have failed to put into place plans to cope with a product recall.  This lack of strategy exposes the businesses to potentially massive recall costs and huge reputational damage.  The report says that "the growing complexity of regulation and labelling requirements combined with the recent 'scandals' and incidents around food contamination has resulted in an increased sensitivity to food and drink product recalls".  Furthermore, nearly 60% of businesses have failed to include product recalls in their contractual agreements with suppliers.

The lack of any product recall strategy exposed businesses to potentially massive recall costs and untold reputational damage.

Roythornes’ head of the food and drink team Peter Bennett told FoodManufacture.co.uk: “While the food and drink sector has, on the whole, always been concerned with safety and its reputation, it needs to evolve rapidly to develop comprehensive recall plans in light of heightened media interest in recent years.”​

Changing food labelling laws and the horsemeat scandal of 2013 made it even more important for food and drink firms to have the protection of an effective recall strategy, he added.

‘Increased sensitivity to recalls’​

“The growing complexity of regulation and labelling requirements combined with the recent ‘scandals’ and incidents around food contamination has resulted in an increased sensitivity to food and drink product recalls.”​

Roythornes’ research among members of the Fresh Produce Consortium, The Food and Drink Forum, the British Frozen Food Federation, the Artisan Food Trail and Tastes of Anglia revealed 18.5% had no product recall procedures in place.

Nearly two thirds (60%) of businesses failed to include product recalls in their contractual agreements with suppliers.

A further 20% of participants confirmed a product recall plan was in place but admitted not testing the plan with trial recalls.

‘So few test their plan’​

“It is promising that over 80% of business now have a plan in place, but the fact that so few test their plan or have media relations procedures in place means there is some way to go before the industry can say it has effectively dealt with this issue,”​ said Bennett.

Also nearly three quarters of food and drink manufacturers and producers lacked media and communications protocols should a recall be required.

“Whether the company is big or small, policies and procedures need to be in place to ensure that the recall process runs as smoothly as possible, with the overall aim of protecting the consumer whilst preventing damage to the company name and reputation.”​

The full extent of that reputational damage was revealed in June when food manufacturing giant Nestlé was forced to recall its Maggi noodles, after the Food Safety and Standards Authority of India ruled that the products were “unsafe and hazardous”.​

The authority made the judgement after discovering “higher-than-allowed levels of lead” ​in some products manufactured in India.

The Maggi recall would cost the manufacturer at least £127M​ in direct costs and billions of US dollars in reputational damage, predicted the consultancy firm Brand Finance.