Katherine Rich: Essential that product recall process is right

There are two words which no one in the grocery sector wants to hear on a Friday afternoon: product recall.

Publicly recalling any product is the last thing any company wants to have to do. It’s costly, it tries the patience of retailers, and such a move, for even the most minor reason, can cast doubt into the mind of consumers.

The reasons for recalls, whether voluntary or mandatory, vary from the minor to the potentially serious. And because recalls have the potential to lead to a loss in brand trust, it’s vital the process is fast and accurate. In the case of food, where safety is paramount, issues can arise within even the best-managed business, which is why the food and grocery sector regards an efficient recall system an essential part of doing business.

Readers of FMCG will be aware that for safety issues, New Zealand regulators have an effective and well understood food product recall process which is overseen by the Ministry for Primary Industries (MPI). When a safety problem is identified in a product that has moved beyond the control of the manufacturer or importer and into the storage, distribution, retail, or consumer chain, MPI must be notified. If a full recall is necessary then part of the process includes notification on the MPI website, as well as advertising in the media if the product has reached shop shelves. Under this process, recalls involving safety issues must be publicly notified, while voluntary withdrawals do not.

Food companies have their own plans for recalls and withdrawals. If they voluntarily withdraw a product for a minor reason, such as the end of the stock or the bar code is wrong, there is no need for public notification.

All in all, there is a clear, streamlined system that works in New Zealand and it’s in everyone’s interests that it does.

So the Food & Grocery Council was bemused when the Consumer Law Reform Bill proposed the introduction of another layer of regulation on top of this system. The bill has a stated aim of “better and less regulation”, but it is essentially proposing to replicate something already in place in another government department. It adds little or nothing to the system we have in place for food – apart from more bureaucracy. FGC said as much in its submission to the select committee.

The problem is that the bill wants to treat food the same way it treats all other products. But though the provisions for recall may be necessary for goods where there are no other arrangements in law, this is not the case with food, as is evidenced by the MPI notification system in food safety cases. The bill proposes that all product recalls and withdrawals, including food, be publicly notified, where at present they are not. They don’t need to be because they are not safety related.

It’s worth noting that there has ever been only one ministerially mandated food recall in New Zealand (and that related to a product from Australia). All other recalls and withdrawals over the past 30 years have been handled voluntarily by business and notified to the regulator under requirements in management or control plans or programmes.

FGC feels strongly about this proposed duplication. We told the committee it is “draconian” to propose that food businesses duplicate notification which would “introduce a costly second layer of regulatory burden for the food industry, on top of the current system which works well, add nothing to consumer safety, and is bureaucratically stupid”.

Perhaps a clue to this stupidity lies in the fact that the clause in the bill relating to food is based on Australian law which took no account of the processes already in place under food law that dealt with recalls and withdrawals for both safety and non-safety reasons, and the notifications required. The Australian mandatory-reporting law has been a debacle for the food industry. It delivers no benefit, adds no consumer information, and makes no improvement in efficiency. All it has done has added cost and complexity, and the industry and regulators have had to establish costly duplicate systems to deal with the unnecessary requirements.

Much more promising than what the Consumer Law Reform Bill proposes is an industry-devised system which came into operation on July 23 – three weeks before the bill is due to be reported back to Parliament on August 9 – which aims at giving business the best chance of ensuring safety and brand are not compromised by a poorly managed system.

It’s called ProductRecallnz, and it’s an online system that provides member companies with a faster, more efficient, and easy-to-use tool to notify trading partners when a product must be recalled or withdrawn. It will replace largely manual processes that rely on paper-based communication, emails, and phone calls, by exchanging “real time” information between trading partners. It has been developed by supply-chain organisation GS1 NZ in conjunction with FGC, Foodstuffs, and Progressive Enterprises. FGC members Nestle, Cadbury, DB, Fonterra Brands, Goodman Fielder, and Kimberly-Clark have helped to trial it.

FGC is confident that with that sort of grunt behind it ProductRecallnz will deliver a system that will far surpass anything that comes out of (more) regulation, and that it will be embraced by businesses eager to reassure consumers they will be protected from unsafe or unsavoury food.

After all, as Alan Martin of L.V. Martin & Son used to say, “It’s the putting right that counts.”