Monday 17th Dec 2018 - Logistics & Supply Chain

Product recalls soar, says report

New research from Navigator CM has found that the amount of product
recalls issued in the UK has been soaring over the last few years,
rising from 112 in 2004 to 253 in 2007, an increase of 125 per cent in just four
years. Non-food consumer goods have seen recalls climb eightfold from
just 18 in 2004 to 161 in 2007.

The risks to businesses are serious. A recent Harris Interactive poll
found that following a recall for health and safety reasons 55 per cent of
customers would ‘temporarily purchase another brand and then purchase
the recalled brand once it was safe’, 15 per cent would ‘purchase another brand
and never purchase the recalled brand again’ and 21 per cent would ‘avoid using
any brand made by the manufacturer of the recalled projects’.

Electrical appliances recalled in 2007 ranged from portable torches to
fan heaters, from digital photo frames to handheld blenders, affecting a
wide selection of industries.

Recent high-profile product recalls such as the Cadbury salmonella scare
in 2006, (estimated to have cost as much as €26million), Mattel’s recall
of excess lead paint in toys (cost: €19million) and Sony’s withdrawal of
laptop batteries (cost: €278 million according to research firm Kendall)
have served to underline the dangers that companies face.

It is clear that in such a situation it is vital that companies are able
to give clear information and advice to consumers and journalists. Given
the vastly increased number of calls, companies find that existing care
line facilities are not sufficient to cope with demand and yet the rate
at which product recalls are rising is outstripping the rate at which
appropriate contingency centres are being set up.

Rob Denton, Managing Director of Navigator said ‘This is a critical and
growing issue for consumer brands. The upward trend has exposed an area
of brand risk where many brands simply do not have contingency
facilities in place. And no worse impression is created, nor brand
damage done, than in the situation where a company is uncontactable or
unhelpful just when consumer concerns have been escalated by a product
recall.’

The report claimed that the increase could be ascribed to several
factors. Firstly, new product safety legislation introduced in 2005
requires manufacturers to inform both the authorities and consumers of
any potential risk from their products. Secondly, consumers and
authorities are increasingly aware of potential hazards. Thirdly,
manufacturers are increasingly sourcing ingredients, components and
packaging from further afield where they have less control over the
supply chain and legislation may not be wholly in line with that of Europe.

Health risk was the most common reason for a recall being issued (21 per cent of
all recalls), with risk of choking (19 per cent), risk of fire (14 per cent) and risk of
electric shock (14 per cent) also important causes.

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