Mars product recall and our expertise

Christof Bentele, Head of Global Crisis Management at ACGCS.

“Plastic pieces are most difficult to detect”

Mars announced yesterday to recall millions of chocolate bars in 55 countries after small pieces of plastic had been found. Christof Bentele, Head of Global Crisis Management at Allianz Global Corporate & Specialty (ACGCS), explains why food recalls are on the rise and what the size of the recall does actually mean.

Are foreign objects a common cause of food recalls?

Christof Bentele: Yes, indeed. Plastic pieces, in particular, are most difficult to detect in comparison to other materials, such as metals, which are easily flagged with metal detectors. In most cases, contamination is caused by a very small piece in production machinery failing and breaking; other sources may include objects used in the cleaning process or fragments which have fallen into the production line by mere accident. Regardless, no matter how small the piece or contaminant, reputable companies want to ensure consumer safety and existing food safety regulations enforce such action.

Often millions of products are recalled even though only a very small number is actually poisoned.

Bentele: Given today’s mass production, a widespread recall does not mean that all products are contaminated, but rather, a mass recall reflects a highly concentrated production source, with high output levels. As such, the most prudent approach for a manufacturer to take is to recall any product which could have potentially been affected during a production run, or that has been created by a faulty machine.

How often do food product recalls happen?

Bentele: We have recently seen an increasing number of product recalls of food & beverage products, with both increasing geographical reach and financial gravity. This is driven by growing supply chains, tightening of consumer safety regulations and also the faster dissemination of information around the globe. The impact of a food contamination can be devastating for the company, as food & beverage is generally regarded as an ‘emotional’ product with a strong brand recognition. If something goes wrong, the impact can significantly damage a brand and a company’s overall reputation. However, if a recall following a product contamination incident is professionally managed, it can help to minimize reputational damage and, in a best case scenario, even build consumer confidence and trust.

How can insurance support affected companies?

Benetele: Contaminated Products Insurance provides the insured indemnification for their financial loss resulting from the recall of a product following either accidental or malicious contamination whether actual or threatened. This includes recall costs, loss of gross profits or rehabilitation expenses. Our policies provide also crisis management assistance. We do partner with red24 which provides immediate support globally and on a 24/7 basis in the event that a client experiences a product related issue. A team of over 85 worldwide specialists will advise and support the technical, legal/regulatory and communications considerations of a product recall.