Wednesday, 22 February 2012
UK

Wednesday, 25 January 2012

Further sharp increase in UK product recalls in 2011

UK product recalls have increased by 27% in 2011 to a record 291, compared with 229 in 2010, according to law firm Reynolds Porter Chamberlain (RPC). This is the second year in a row to see record breaking increases.


Stuart White, Partner at RPC

This year’s increase was largely driven by a jump in recalls of faulty electrical consumer products, up 45% from 40 in 2010 to 58 in 2011.

Stuart White, Partner at RPC, said: “Product recalls of ‘white goods’ and other electrical products tend to involve lesser-known or budget brand names. The increase this year could have been fed by high consumer demand for cheaper brands, particularly in the case of bigger ticket household products like cookers or freezers. It may be that some white label or smaller producers have had to source cheaper suppliers to be competitive.”

In 2011 Beko, the Turkish electrical appliance supplier, recalled around 500,000 freezers after concerns that they were linked to a number of domestic fires. However, the company faced criticism from some consumer groups for failing to act swiftly enough after initial reports of a fault back in 2010, said RPC.

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“Much negative publicity has been directed at big brand-name companies who have allegedly put their customers at risk by delaying recalls. Because of this, other corporates are very wary of putting their reputation in jeopardy by delaying a recall,” said Mr White.

“The increasingly seamless spread of information through social networking platforms like Facebook and Twitter has also made it easier for consumers to complain about products to one another. Where a problem may once have been locally contained, it is now much easier for that complaint to become viral.”

The increase in recalls in 2011 was also driven by a big rise in recalls involving food products, up from 35 recalls in 2010 to 70 recalls in 2011.

Jason Bright, Partner at RPC, said, “The pressure on manufacturers to do more with less may well have affected food production standards in a minority of cases. The European wide E-coli outbreak in June this year has put food safety standards back in the spotlight, and has put manufacturers on high alert. With consumer groups and regulators keeping a watchful eye on the situation, even very localised problems may lead to a company recalling whole batches just to be on the safe side.”

RPC said that supply chain disruptions may also have fed in to the rise in product recalls. “From natural disasters to political unrest, the last 12 months has seen substantial supply chain disruptions,” said Mr White.

“These will inevitably have put pressure on manufacturers who may well have turned to third or fourth tier suppliers to cope with the supply shortage. Product quality may have suffered as a result, increasing the likelihood of having to carry out a recall.”

Delaying a recall can be both expensive and damaging to a business’s reputation, explained RPC.

It was reported that pharmaceutical giant Pfizer put aside $772m (£476m) to resolve claims from consumers that its hormone replacement drugs caused serious illness. “Acting swiftly is important when dealing with any product recall situation. Delaying a recall can have disastrous consequences for a brand’s reputation, which is sure to reflect on the business’s balance sheet,” said Mr White.

According to RPC, UK recalls of goods made in China represented more than half (54%) of all consumer recalls, in cases where the country of origin was identified. RPC said that the comparatively low production standards of some Chinese goods entering the UK market continue to be a major trigger of health and safety alerts.

“Despite China’s continued efforts to improve safety standards, the huge proportion of recalls deriving from Chinese products shows that the problem with standards in China has not gone away,” said Mr White.

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