24 minute read
Total recall: With the spate of recent food recalls, Fionnuala Carolan speaks to retailers about the lasting effects on brands from these unforeseen events
from shelflife - update
by Mediateam
Total recall
A f t e r a r e c e n t s p a t e o f p r o d u c t r e c a l l s , F i o n n u a l a C a r o l a n t a l k s t o r e t a i l e r s a b o u t t h e i m p a c t o f t h e s e u n p r e d i c t a b l e e v e n t s o n business and what the lasting effect of a recall can be for a b r a n d ’ s c u s t o m e r s
Product recalls impact thousands of companies every year putting consumers and brands at risk. A recall can happen for a myriad of reasons from incorrect labelling to the detection of a dangerous ingredient. If managed poorly, a recall could have devastating consequences on a company’s reputation, market share and bottom line.
It is often the case that Irish supermarkets have to ask customers not to consume certain food products after issuing recalls on items. There are procedures in place in order to minimise the disruption but every recall comes with a level of risk to your customers and to the brand’s reputation.
Most recent recalls
In recent months alone, the Food Safety Authority of Ireland has recalled numerous well-known brands from the major Irish supermarkets for various reasons. Batches of Haagen-Dazs ice cream products were recalled due to the detection of 2-Chloroethanol, a recognised reaction product of ethylene oxide which is banned for use in foods in Europe. A batch of Mars Bounty Ice Cream Bars was recalled for the same reason.
Tesco was forced to recall a batch of Free From Digestive Biscuits amid fears it could contain small metal pieces. Additionally a batch of Fray Bentos Just Chicken Pie was pulled from shelves in Tesco, SuperValu, and Dunnes Stores due to the possible presence of plastic. Meadow Park Eggs were recalled due to the possible presence of Salmonella and Roma’s Formaggio Da Pasta cheese powder was pulled due to the potential presence of mould.
With all of these incidents, point-of-sale recall notices have to be displayed in stores supplied with the implicated batches and the retailer is required to give shoppers refunds when returning any of the affected batches. None of this is ideal in a busy retail environment.
FSAI answers
We wondered if product recalls were becoming more common or if this is just a perception based on increased media reporting and information garnered through social media. A representative from the Food Safety of Ireland told ShelfLife that in fact recalls are down this year compared with last.
“To date this year, FSAI has issued 93 food alerts and food allergen alerts for product recalls. During the same period last year (Jan 2021-Aug 2021), 104 food alerts and food allergen alerts were published,” the representative said.
“There have been less food alerts and food allergen alerts published by the FSAI in 2022 compared to the same period in 2021. It is noted that from January - August 2022, FSAI published seven alerts notifying consumers of the recall of certain food items due to the presence of ethylene oxide, this is compared to 23 food alerts published for the same period in 2021. A certain amount of fluctuation year on year is to be expected,” it said.
The FSAI believes that not all recalls negatively affect a business but that businesses need to ensure their products are fit for purpose or face the consequences.
“The impact on businesses varies depending on the nature of the issue and risk to public health, distribution channels, quantity of implicated stock etc. The onus is on food business operators to ensure products placed on the market are compliant with EU legislation and safe,” explains the FSAI. “ T h e i m p a c t o n b u s i n e s s e s v a r i e s d e p e n d i n g o n t h e n a t u r e o f t h e i s s u e a n d r i s k t o p u b l i c h e a l t h , d i s t r i b u t i o n c h a n n e l s , q u a n t i t y o f i m p l i c a t e d s t o c k e t c . T h e o n u s i s o n f o o d b u s i n e s s o p e r a t o r s t o e n s u r e p r o d u c t s p l a c e d o n t h e m a r k e t a r e c o m p l i a n t w i t h E U l e g i s l a t i o n a n d s a f e . ”
Retailers’ rapid responses
Retailers and wholesalers all have individual processes in place to deal with recalls thus diminishing the effects of them as much as possible. Musgrave operates a Rapid Response Process ensuring all stores are notified within a matter of hours so that affected products are removed from the shelves to ensure the safety of its customers.
According to Musgrave’s website: “Some recalls or withdrawals can include in-store notices, notification to online customers by email and media press releases. All recalls are managed by the Food Safety & Quality team who also liaise closely with the Food Safety Authority of Ireland in addition to other agencies.”
Chris O’Driscoll, manager of SuperValu, Casletroy, Co. Limerick thinks there is a good system in place for dealing with recalls but he says he would worry about his customers when recalls happen. “Your fear is that someone has consumed something and you just want to protect your customers,” he says.
However, O’Driscoll has never experienced any adverse reactions yet and explains what he does when a recall happens: “The email would come through and it has a link on it and you would print out the notice and stick that up in front of the product on-shelf. If a customer has bought any of the affected products, they’ll bring them back for a refund. The company will look after us then. Customers will see it on social media and news sites online so people are often aware of it from there already,” he explains.
The biggest incident that sticks in his mind is the Kinder recall earlier this year, whereby the manufacturer, Ferrero, implemented a recall “due to some implicated products being linked to a current outbreak of Salmonella infection,” the FSAI stated at the time. “We explained the situation to the customers,” says O’Driscoll. “We were telling people not to be too worried but not to consume the affected products if they hadn’t already.”
With regard to reputational damage of a product, O’Driscoll says it depends on what the product is. “I find baby food would be the big one. I think the confidence could be gone with it then. It didn’t affect the sales of Kinder because people accept that it’s a one off and they have confidence in the product recall system. But baby food is a worry as it could be a very good seller but after a recall, it would be very much reduced for a while anyway.”
Fintan Battles, manager of Eurospar Ennis, Co. Clare, says that BWG has an excellent system in place to deal with product recalls.
“BWG has an online platform to deal with recalls so we do it all through that,” he explains. “On our internal system, the extranet, you have to print the information out. It won’t let you go on until you print off the notice for the customer to put up on the shelf. It means you are definitely following it through.”
Do customers come back for refunds if they have already bought the product? “Very rarely,” he says. “Maybe we had two in the last year. We have to leave the sign up for a certain amount of time. The Environmental Health Officer (EHO) came into me on a number of occasions to make sure we had the signs up and at the point of sale, so I now send on a copy of the product recall sign to our EHO to keep her in the loop as well,” he explains.
Asked whether it affects sales of the product going forward, Battles says: “I don’t really know if it affects a product too much but I do remember from the Sacla Pesto recall a couple of years ago, we don’t sell as much of that now but it might not be directly related to that,” he muses.
While he doesn’t see a recall as a logistical nightmare, there are some instances where they can be required to destroy the product at store level, adding significantly to the waste bill for that week or month.
“We have an account with S&W Wholesale and they had a recall on Haagen-Dazs ice cream in the last couple of months and their system means that I take a photo of the quarantined stock and throw it out and they reimburse for the quantity. I’d say I had 150/160 tubs of ice-cream that had to go out. There was a preservative in it that is not authorised to be used in the EU. We get a full refund but no money to dispose of it. There was a lot of weight in it. That was an unusual one as I’d only be buying that once a month. Normally it wouldn’t be that amount of stock,” he clarifies.
Jonathon Mooney, manager of Eurospar Dungarvan, Co. Waterford, also credits BWG with having a great recall system in place. “It won’t leave the portal until you have it actioned,” he explains.
Mooney says that no one has ever come back looking for a refund from his store and that not every product recall affects them as they are a relatively small store so they don’t stock all products.
“Most of the time the recall is due to a different language being on the ingredients list or something like that so it wouldn’t necessarily always be recalled because it’s dangerous to consume,” he explains.
However he believes that social media has changed things for brands. “If someone decides to have a rant on social media, the reach is far and wide so it’s better for the company to be safe than sorry. I’d say customers might think it’s more prevalent because there’s more talk about it on social media than there ever was before. I don’t think the general public appreciate that companies are going that extra mile to ensure people’s safety,” says Mooney.
“I would say companies are more careful than they’ve ever been. They’re taking no chances and just uplifting everything,” he believes. Better safe than sorry seems to be the mantra for brands and retailers across the board and it seems like retailers are quite accepting of that, preferring a bit of extra logistics to the possibility of endangering a customer and the fallout from that. ■
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Crunch time for energy costs
As we head towards the announcement of Budget 2023 on 27 September, the question of how the government will help SME retailers deal with crippling energy bills is paramount.
Retailers’ concerns are only too real, and the figures involved are alarming. Calling on Taoiseach Michael Martin to act now to address the astronomical increases, Retail Grocery Dairy & Allied Trades Association (RGDATA) director general Tara Buckley said: “I have just been contacted by a retailer who said they burst into tears when they opened the energy bill for August. It has jumped from €6,000 in January to €15,000 in July and now €21,000 for August. This is just not sustainable and is threatening the very future of these essential local food businesses.” In a bid to make a significant intervention to stop job losses and shop closures, RGDATA has also asked members to complete a short survey outlining their experiences at www.surveymonkey.com/r/VYCWJ3J.
Pressure across the board
Back in June, ShelfLife spoke to a Co. Kerry retailer, who at that stage, said his monthly electricity costs had already more than doubled to €12,000 in his latest bill. “The single biggest challenge is energy costs,” he said. “Margins will also probably get affected slightly going forward because value will have to be offered and I would expect, a bit like post-recession the last time back in 2012 and 2013, the multiples will kick in and it’s going to put pressure on margins and pricing will be very competitive.”
Another Dublin-based off-licence retailer told ShelfLife: “It’s a challenging time, there’s pressure on every cost. There’s not any range of products that haven’t been affected. We’re getting a letter through the door every week from suppliers citing their pressures from packaging, glass costs, metal costs, transport costs and then obviously inflation which obviously leads to pressures on people’s wages. There are pressures on all costs across the business at present.”
Unsustainable levels
This chimes with the experience of the owner of a small coffee shop in the centre of Athlone, reported on recently in The Irish Times, who was shocked to discover she had been charged almost €10,000 for just over two months of energy usage. Owner Geraldine Dolan realised the cost of electricity to her Poppyfields cafe for 73 days from early June until the end of August came in at €9,024.70. This was an increase of 250% in just 12 months, and didn’t include the €812.22 increase in VAT, which brought her total bill to €9,836.92.
“We have gone from paying a daily rate of €34 last year to paying €123 per day now,” Dolan said. “When those figures are spread across the cost of a year it means an annual electricity bill which would have been around €12,000 is now going to be around €45,000. There is no way we will be able to cope with that. We will pay this bill because we have used the electricity, but we would not be able to pay at that level every two months.”
Neil McDonnell of small and medium businesses umbrella group Isme said the experience was being replicated in businesses across the country, with some seeing energy price increase of well in excess of 300%.
Pressure like never before
Indeed, Ian Allen, managing director of SuperValu and Centra, recently highlighted that the average energy bill for a SuperValu and Centra is expected to treble, and in some cases quadruple from September since last year. Based on current outlook, the average Centra store will see energy bills rise from circa €50,000 in 2021 to up to as much as €200,000 in September 2022.
“The current inflationary environment, coupled with soaring energy costs, has put our retail partners under pressure like never before,” Allen said. “Energy is the second highest bill, after labour, a store owner must meet and with sales volumes back on last year, the new crisis of rapidly surging energy costs is compounding the cost of doing business in a high volume and low margin sector.”
Musgrave has called for a temporary financial support package to be introduced for community retailers, which contains a comprehensive suite of measures including the introduction of an energy price cap.
Not scaremongering
The Convenience Stores and Newsagents Association (CSNA) has likewise been outspoken in representing its members’ urgent
“CSNA and other employer representative bodies have a path worn to various ministers and relevant government departments alerting them to retailers’ perilous state,” says CSNA CEO Vincent Jennings
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concerns to government. “The difficulties we have in Brexit-related and post-Covid problems have been entirely overshadowed by the unprecedented increases in our gas and electricity bills, coupled with the unsustainable additional costs of fuel for both our businesses and our customers’ purses,” said CSNA national president John Paul Lonergan. “These are not scaremongering words,” he added. “It is obvious from all of the contacts we are receiving from members that the energy crisis has the ability to inflict horrendous damage to our businesses.”
“The prospect of any viable business having to seriously contemplate the prospect of closing due to the cost of electricity should be sufficient to alert the ‘powers that be’ that a national crisis is in the making,” added CSNA CEO Vincent Jennings.
“CSNA and other employer representative bodies have a path worn to various ministers and relevant government departments alerting them to the perilous state that we are heading towards,” said Jennings,” expressing his hopes that their collective voices have been heard and that Budget 2023 will “provide sufficient comfort for our members, their staff, and their customers”.
Taoiseach’s response
In response to a letter from RGDATA outlining the issues facing retailers, Taoiseach Michael Martin replied: “The government is acutely aware of the impact on businesses, and on wider society, of the recent increase in prices, especially the increase in fuel and other energy costs arising from the invasion of Ukraine. Already, the government has responded with a number of substantive measures including reductions in the VAT rate on gas and electricity and on excise duties on fuel.
“The upcoming budget, Budget 2023, will include further significant measures to address cost pressures, measures which people, and businesses, will feel in their pockets within weeks,” he continued. “While there are limits to what government can do, in particular so as to ensure we do not exacerbate or add to inflationary pressures, we are committed to taking the appropriate and necessary steps to address the current challenge.”
Options under consideration
While the government certainly faces an unenviable task in this regard, it is crucial that Budget 2023 gets this balancing act right. Shortly before ShelfLife headed to print, Public Expenditure Minister Michael McGrath said that domestic price caps are being “examined” by the government but electricity credits are set to be the main focus of supports.
Ministers will consider electricity bill price caps, which were put in place in the UK by newly appointed British prime minister Liz Truss, in an ambitious and costly plan where households will pay no more than £2,500 (€2,886) a year for the next two years.
“We will examine in detail what the UK is proposing, we’ll have more details in relation to the European Commission’s proposal and the work of the EU energy ministers, but in the meantime, we are developing the suite of options around direct supports for households and for businesses,” Minister McGrath said.
“I think that is the most likely scenario, but we are not ruling out any option at this stage,” he added. With businesses already working to control and reduce their energy bills as tightly as they can, we can only trust that the right decisions will be implemented in order to avoid the worst possible option of all – small businesses being forced to shup up shop. ■
