Product recalls increasingThe largest rise is in consumer goods section
19 February 2007
The number of product recalls in the UK has increased by 8 per cent in the last year to 179, lawyers said today.
Businesses are acting more decisively to protect their reputation from the harm caused by faulty goods, according to City law firm Reynolds Porter Chamberlain LLP.
The largest increase came in the consumer goods sector, where recalls jumped by more than 20 per cent.
Recalls of food products actually fell by almost 7 per cent, but still remained high with a total of 71.
Reasons for recalls varied from mislabelling to the discovery of glass, wood and even moths in food.
Mark Kendall, a partner at the firm, said the negative media coverage of Cadbury's slow response to finding salmonella in its chocolate clearly illustrated the dangers of not taking pre-emptive action.
Cadbury was criticised by the Food Standards Agency last year after it waited five months before reporting that traces of salmonella had been found in some of its products.
Seven product lines and more than a million chocolate bars were eventually recalled on 23 June.
Mr Kendall added: ‘Corporate reputations have become more fragile as consumers increasingly use the internet and other media to share and publicise information about faulty products.
‘The Sony laptop battery debacle, which saw nearly 10 million battery packs recalled, is a perfect example. The growth of sites like YouTube meant millions of consumers saw videos of a computer spontaneously catching fire due to the fault.’
The Sony batteries recall reportedly cost some $429 million, the law firm said, highlighting how expensive recalls can be.
However, compensation costs and legal fees from lawsuits that result from a faulty product and a botched recall can be even higher.
Mr Kendall said: ‘The legal costs and compensation paid out can be colossal, so the need to recall quickly is vital, and so is insurance cover.
‘With consumers becoming ever more litigious, companies are playing it safe and recalling even where the risk of a liability is slight. They know the courts and the press will punish them if they are seen as dragging their feet.’
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