Product Recalls - What Georgia Businesses Need to Know

April 9, 2015 | Charles Bowen

Question

How do product recalls impact Georgia businesses and what should be done to minimize liability?


Answer

Recalling unsafe products can be a logistical and financial challenge but is a much-preferred strategy to exposing your customers to potential risks. Take every measure to prevent recalls and understand the process of when and how they are executed.


Any company that manufactures, distributes or sells products to the public has a responsibility to ensure those products are safe. Even with strict quality control procedures and the best of intentions, some unsafe products make it to the marketplace. Regardless of whether components of your products are faulty, defective, mislabeled or damaged in transport, you may face severe consequences such as product recalls and litigation if they have the potential to harm consumers or the environment. While you may be unable to control the entire supply chain (i.e., a batch of ingredients may have been exposed to a contaminating bacteria by your supplier even though all samples passed internal testing), you must take responsibility for the final product.


Product Safety Regulation

Consumer Product Safety CommissionIn 1972, Congress enacted the Consumer Product Safety Act. This act established the United States Consumer Product Safety Commission (CPSC) as an independent agency of the United States federal government. The CPSC regulates the sale and manufacture of more than 15,000 different consumer products. Charged with  protecting the public from unreasonable risks of injury or death associated with consumer products, the CSPC has power to develop safety standards and issue recalls for products deemed unsafe.  

Recent Georgia Recalls

Due to the nature of food products (which can cause consumers to suffer immediate and potentially life-threatening reactions), recalls are common and often issued even if threats are minimal. In 2015 alone, at least 29 food product recalls have been issued in the State of Georgia as of the writing of this article. Recalls include:


  • food safety product recalls

    A variety of nuts and seeds such as pecans, hazelnuts, macadamias, walnuts, and sunflower seeds

  • Spices

  • Pet Food

  • Poultry

  • Beef

  • Fish

  • Apples

  • Chocolate

  • Ice Cream and gelato

  • Crackers, croutons, cakes, and cereal

  • Hummus


A complete list of food and feed recalls and alerts for Georgia can be found here.


Product Recall Process

Product recalls can either be self-initiated or directed by regulators once they have been alerted to potentially unsafe products in the market. Every recall is unique depending on the potential safety risks involved, product types and scope of distribution. The CSPC has published a Recall Handbook which should be referenced to ensure all necessary measures take place and includes guidance on:

  • Reporting requirements

  • Defect identification

  • Evaluation of reports related to various hazard classifications

  • Fast tracking recalls

  • Corrective Action Plans (CAPs)

  • Recall communication

  • Recall monitoring

  • Development of company policies and planning

  • Record maintenance


The CSPC also has a recall checklist designed to help firms navigate the recall process and a business education portal with a variety of resources related to compliance with federal government safety regulations. This reference guide with common requirements, helpful links and contact information should be bookmarked or downloaded.


Planning Ahead

Every effort should be taken in order to avoid product recalls. Strict quality assurance and control protocols may add time and expense but are the best way to minimize the likelihood of potentially unsafe products doing harm to customers and your reputation. Ensure your suppliers are properly testing their products before they arrive at your facility. Supplier agreements should have specific language related to testing standards along with enforceable remedies for purchased products that are found to be unsafe by your internal testing or later flagged by regulators. Consult with your risk management team to see if you are covered by product recall insurance policies and understand liability exposure as it relates to your corporate structure (we have written extensively on this topic and many helpful articles can be found here).


Bottom Line

The sale of potentially unsafe products can have devastating financial and reputational impact on businesses.


Be Proactive - operate under the correct corporate structure, ensure your risk management plan includes proper quality control and insurance.


Be Prepared - don’t wait until something bad happens, understand the product recall procedure, have a plan in place and conduct a mock recall to identify unknown challenges.


Be Transparent - some may claim there is no such thing as bad publicity but if your product is linked to the injury or death of a customer (even if fault lies with one of your suppliers), your business may never recover. If you are involved in a product recall situation, be transparent about the cause, impact and what measures are being taken to ensure safety is the number one priority. 

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Topics: Product Recalls