The best of British brewers need to consider product recall protection

Right now there are few industries which can claim to be as buoyant as British brewing – with 1,700 breweries now open in the UK it seems our thirst for beer is far from being quenched.

This is great news for beer drinkers, brewers and the wider industry, and it is against this boom period that some of the nation’s best will gather for the Society of Independent Brewers’ annual trade exhibition – BeerX 2017.

As a 'silver sponsor' attending the event and a specialist insurer of food and drink manufacturers, NFU Mutual is well positioned to consider some of the key business safety and protection issues.

One such issue which we often see that has the potential to seriously impact on businesses is when product recalls are necessary. This can result following:

  • accidental or malicious contamination,
  • mis-labelling, for example failing to note the presence of allergens,
  • packaging faults, such as broken seals or glass prone to shattering.

Recalls can be costly to a business as it will be necessary to identify the affected product; arrange for its removal from retailers’ shelves; conduct testing on the products; destroy and dispose of affected items; address any deficiencies; and repair damaged equipment.

There is also the potentially costly damage to hard-won reputations which might see manufacturers facing challenges to replenish customers with replacement stock and to re-gain market share in the face of fierce competition.

How common are these problems?

In 2015, the Food Standards Authority and Food Standards Scotland were notified of and investigated 1,514 safety incidents. Incidents are recorded where there are concerns about the safety or quality of food and animal feed. They might include contamination of food or feed as well as environmental pollution incidents. The frequency of reported incidents has increased over the last nine years.

Some examples from the past 12 months of product recalls involving drink manufacturers demonstrate the types of incidents which can occur:

Each of these incidents not only caused disruption and cost to the organisations involved but were also widely publicised in the trade press as well as local and national media.

Make sure you’re protected

Product recall insurance can give food and drink manufacturers the following cover:

  • Costs involved in investigating the recall
  • Costs of recalling the affected product and any additional storage required
  • Additional costs of temporary labour to re-fill orders
  • Costs associated with disposing of the affected product
  • Cancellation of promotional advertising and retail shelf slotting fees
  • Business Interruption (Consequential first party financial loss)
  • Public Relations support to protect against reputational risks

Final thoughts

Among the businesses attending BeerX are many which have created great brands built on products produced with love, care and hard work. I would urge them to consider the plans they have in place should they face a product recall.

Do they have a plan in place which would help them cope? Is it regularly tested and understood by all? Do they understand how much a product recall event would cost? And finally, do they have insurance in place which offers them adequate protection?

If the answer to any of these questions is ‘no’ then it’s time to take action.