Product recalls in the UK have hit a new high as problems from overseas suppliers increase
Product recalls in the UK have hit a new high as problems from overseas suppliers increase, a City law firm has revealed.
There were 190 recalls last year (up from 179 in the previous year). The consumer goods category saw the biggest rise – the number of dangerous or faulty goods recalled rose 22% to 89. Food and drink recalls also increased from 71 to 74, while recalls in the pharmaceutical category dropped from 35 to 27.
The figures come to light as problems with products sourced from China mount. RPC partner Mark Kendall, involved in the research, said: ‘We have been warning for years of the risks in uncontrolled out-sourcing to China and other developing countries.
‘Many companies need the cost savings from outsourcing to China to drive their earnings but the statistics show that putting in place proper quality control procedures to protect their customers is easier said than done.’
“While lessons will have been learned from the Mattel recall, the problem will not be solved overnight. We expect to see more of the same.
RPC partner Mark Kendall
Mattel felt the full sting of negative media attention in the summer of 2007 following its global recall of over 18m toys. Kendall added: ‘While lessons will have been learned from the Mattel recall, the problem will not be solved overnight. We expect to see more of the same.’
‘Standard product liability insurance will not cover a recall,’ warned RPC. And no amount of insurance can protect a brand’s reputation. ‘The costs of trying to avoid a necessary recall in terms of reputational damage, regulatory intervention and potential lawsuits can be huge.’ RPC added: ‘Regulators are promising a tough stance against dangerous products.’
Merck, which has been accused of delaying the recall of its Vioxx painkiller drug has faced legal fees of $500m a year to defend against lawsuits. This month the company offered to pay US$4.85bn to settle 26,000 lawsuits. Vioxx was found to increase the chances of a heart attack. The total cost of the Vioxx problem is currently estimated at US$8bn.
And last year, European Consumer Protection Commissioner, Meglena Kuneva, revealed plans for an audit of business safety measures in the toy supply chain after a series of scares over potential risks to children.