Product recalls are occurring more frequently and often receive media attention. A poorly handled product recall or contamination incident can have a catastrophic impact upon brand reputation, an organisation’s assets and even their ability to continue trading.
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Food, drink, pharmaceuticals and cosmetics
Instances of accidental food contamination occur in the UK with alarming regularity from the introduction of microbiological contamination, viruses, chemicals and foreign objects, or from formulation errors and mislabelling.
Cosmetics and medicines are also susceptible to contamination and potentially fatal errors. Alerts regarding pharmaceuticals alone now stand at around 28 every year, for reasons ranging from product infection to faulty packaging assembly.
While cases of deliberate contamination and malicious extortion are less common, they do happen. Incidents of this type are bound to hit the headlines and the potential damage can be magnified if they attract adverse publicity.
Consumer goods recalls are on the rise and have been so for the past decade, usually as a result of danger from overheating, electrical shock and parts detaching causing choking hazards.
According to RAPEX (Rapid Alert System for Non-Food Consumer Products), the number of notifications in 2009 rose by 7% when compared to the previous year. Prime offenders were clothing, textiles and toys, but all sorts of product types made their list.
The true costs of recall
Once embroiled in a product recall situation the costs, direct and indirect, to manufacturers, retailers or wholesalers can be enormous. Public/products liability will address the effects of injury or damage caused, but the impact may be much wider. Recovering stock, transport, overtime, repair or replacement and subsequent loss of reputation and profit can cause deep financial damage.