As featured in Retail World

In the past five years, almost 300 food products and over 1200 consumer products have been recalled. There are a number of reasons for product recalls including problems with product labelling and product defects.

A common labelling problem leading to recall is where ingredients (such as peanuts or eggs) are not declared. Such omissions can be dangerous, even life threatening, for consumers who are allergic to the unlisted ingredients.

A product may be recalled where there are inadequate warnings on the label. Warning labels must be included on certain products and they should clearly specify both the uses of the product and the risks associated with it.

Food products may be recalled because of a defect, for example, the product contains foreign matter or because of contamination.

If a problem with a product becomes apparent, an immediate VOLUNTARY recall should be considered. By voluntarily complying with the law, a supplier can reduce the need for government authorities to become involved and minimise the risk to consumers. There are different legal requirements and procedures relating to compulsory recalls.

Various legal requirements govern voluntary product recalls. Some of the legislation governing this area include the Australia New Zealand Food Standards Code (“the Code”) (under the Food Standards Australia New Zealand Act 1991), the Trade Practices Act 1974 (Cth) (“TPA”), the various state Goods Acts and/or Fair Trading Acts (or equivalent) and the Therapeutic Goods Act 1989 (Cth).

Many recalls are voluntary and it is normally the supplier (this includes the manufacturer) of the product who will initiate a voluntary recall. If a supplier does not take satisfactory steps to prevent injury to consumers, legislation provides for the compulsory recall of products.

The specific requirements of a recall will depend upon a number of factors, including the type of product, the reason for the recall and the state (or territory) in which the product is recalled.

The critical issue is getting the product off the shelves. A supplier must identify the relevant product, citing the batch numbers of the affected product, the area of distribution and so on and provide this information to customers. A retailer should remove the product from sale as quickly as possible following notification.

There are guidelines as to the method of advertising and promoting a recall. The Consumer Safety Unit and FSANZ have guidelines as to how a product recall should be conducted, including information on the method and format of advertising, such as use of the media.

Any advertisement should clearly identify the product (a photograph or drawing is useful), the supplier, specify the hazard or risk and when and where the product was available for sale. The advertisement should also detail how the consumer can obtain a refund or replacement and an information telephone number. Many manufacturers and larger retails also have product recall notifications on their websites.

The supplier will need to decide if consumers will return the goods to the point of purchase or whether there should be a customer call line through which they can arrange a refund and then destroy the item or some other arrangement. The supplier will also need to consider how retailers and distributors will obtain refunds. It is a usual requirement that a consumer is entitled to a refund (or replacement) where goods are defective.

A recall is not concluded simply when the product has been removed from sale. The supplier will need to make arrangements to deal with the goods that are returned. It may be necessary to warehouse the goods until they can be destroyed, repackaged or dealt with in some other way.

Some product recalls can be avoided by ensuring that the legal requirements relating to the particular products’ labelling are adhered to. By ensuring warning labels fully describe the uses and risks associated with a product and labels disclose all ingredients or components of a product can avoid a costly product recall.

Certain businesses are legally required to have a regularly updated, written product recall plan. It is a requirement of the Code (with regard to food products) that manufacturers, wholesalers, distributors and importers of food have a written recall plan in place. All businesses should be aware of the legal requirements with relation to specific types of products so that if the unexpected occurs they are prepared to take quick action and are confident that they have fully complied with the relevant law.

Statistics from http://www.recalls.gov.au/recalls_stats.cfm, visited 11 July 2003.

For more information contact Leneen Forde.