By Stephanie Koumbarakos (Trainee Lawyer) and Amelia Edwards (Lawyer)
Whether or not to conduct a food recall is a nightmare most food producers and manufacturers don’t want to contemplate.
As at 3 April 2018, a rockmelon-related listeria outbreak has resulted in six confirmed deaths and caused serious illness in at least 13 others. The incident, together with the consequential recall of rockmelon across Australia, has also triggered damaging fall-out for the entire rockmelon industry, with Australian sales falling by 90 per cent despite the reported identification of Rombola Family Farms as the sole source of the outbreak.
Food Standards Australia New Zealand (FSANZ) recently released a report confirming that it has co-ordinated 626 food recalls over the last 10 years, with most recalls having been initiated because of undeclared allergens (230 recalls or 37%), and microbial contamination (174 recalls or 28%). Listeria, the illness-causing agent from our contaminated rockmelon, is a type of bacteria. However, FSANZ also reports that recalls due to undeclared allergens have increased disproportionately over the last 10 years, and since 2013 have “consistently been the main reason for recall”. This concerning trend that has prompted FSANZ to call for submissions from food businesses regarding a proposed new ‘plain English’ food allergen labelling standard.
Though consumer back-lash can be difficult to avoid when a contamination issue as serious as this recent outbreak occurs, there are certain steps that food manufacturers and producers can (and, in some cases, must) take to minimize risk of contamination, and of resulting serious injury (and corresponding liability) should food contamination or other product defects occur.
What is a food recall and when are you required to undertake one?
FSANZ does not itself have the power to compel the recall of a food product, though it is the key regulatory body responsible for managing the food recall process. The Australian Competition and Consumer Commission (ACCC) is generally empowered in relation to all product safety issues under the Australian Consumer Law (ACL), but it is the various state and territory health departments or food authorities (as applicable) that will generally take responsibility for food safety matters, and may initiate a ‘mandatory’ food recall where there is an issue of public health and safety.
Mandatory food recalls are, however, relatively rare as the responsible manufacturer or importer will usually elect to initiate a ‘voluntary’ product recall itself on becoming aware of a serious injury or discovered a contamination or defect issue likely to cause injury or illness. A food business may receive notification of an injury, illness, or defect direct from consumers, through retailers/distributors, or through relevant food safety authorities – especially where the latter occurs, the recall process can be very urgent (and panic-inducing, if a proper recall plan is not in place).
Who needs to know?
If a responsible food business (which may be the manufacturer or importer) considers that a food recall is or may be needed, action must be taken quickly. There are two general classifications of food recalls: consumer, and trade. While a consumer-level recall needs to be widely and publicly communicated, a trade recall (contacting only businesses in the distribution chain) can be conducted where the food has not been sold directly to consumers.
The first task is generally to notify the relevant state or territory food enforcement agency in the same jurisdiction as the location of the head office of the business (unless they are already involved), which will assist in determining whether a recall is necessary and in conducting the recall. Before or at the same time as contacting that agency, it is important to seek expert legal advice. A lawyer can help you to identify the appropriate next steps, not just to comply with procedural requirements but also to manage liability risk.
Food businesses that voluntarily decide to commence a food recall must then notify FSANZ as soon as possible (and no more than 48 hours) after initiating the recall. Call the FSANZ Food Recall Coordinator on (02) 6271 2610 (9am-5pm Monday–Friday) or 0412 166 965. This required notification form must then be submitted to FSANZ, providing details of the food product and the nature of the defect.
FSANZ will generally then co-ordinate notification of all other relevant authorities, including the ACCC or the ‘responsible minister’, but the manufacturer or importer will remain responsible for contacting distributors, retailers, and consumers as needed. When it comes to consumer notification, there are prescribed forms of notice (including content, size, and placement) that must be published. The notice will usually be provided to you by the responsible authority, but more information is available in the FSANZ Food Industry Recall Protocol, available from www.foodstandards.gov.au.
Failure to make appropriate notifications may result in penalties, and also increases liability risk for resulting injuries.
What if a serious injury is reported?
A food business has specific reporting obligations under the ACL if a consumer experiences a product-related ‘serious injury or illness’. Any consumer being required to seek medical treatment may trigger those reporting obligations, but the ACCC guidance also extends the definition of serious injury or illness to include allergic reactions (even where medical treatment is not required).
Again, you must report a serious injury to the ACCC via the required form within 48 hours of becoming aware that the injury has occurred. There is a section on the FSANZ reporting form that asks whether a serious injury has occurred, and will direct you to file a separate report to the ACCC if the answer is ‘yes’. If injuries or illness are reported after you have filed the initial FSANZ report, then the additional report to the ACCC must be made as soon as possible.
Where the consumption of a food product results in injury, illness, or death, people in the supply chain (including the manufacturer and/or importer) may be liable to consumers for negligence, and other penalties and even criminal sanctions may apply depending on what action is taken (or not taken) and when. Seek legal advice immediately on receiving a report of any adverse reaction to a food product.
Make sure you have a recall plan
Under Standard 3.2.2 of the Food Standards Code, all food businesses involved in the wholesale supply, manufacture, or importation of food must have a written recall plan in place. This policy must be complied with when recalling unsafe food and must be made available to an authorised officer upon request. Non-compliance may result in penalties.
An appropriate recall plan for your food business will need to account for the way that your business operates (including supply chain and sale/distribution) and should cover: a clear chain of command and responsibility in the event of a recall; who needs to be informed and how they will be informed; who will be the designated point of contact for regulatory authorities and for consumers; and how the food business will deal with the storage or disposal of any food which is subject to a recall.
Your food recall plan should include seeking legal advice on whether a recall is needed and in undertaking the recall and identifying and managing related liability risk. Savvy businesses will also involve appropriate public relations professionals early-on to help mitigate reputational damage and control messaging.
In summary – know your risks and responsibilities
- Though most recalls are ‘voluntary’, food businesses still have mandatory reporting obligations when they elect to conduct a recall and/or receive a report of a serious injury or illness.
- Food businesses generally must have a recall plan in place, and should stick to it.
- Food that has been recalled must be collected and separated for disposal so that it cannot be used for human consumption. Under the ACL, food manufacturers or importers will generally be obligated to provide refunds or replacements to affected consumers.
- Injury or illness resulting from consumption of a food product substantially increases your risk profile (and the costs, damages, and penalties you may be exposed to). Act promptly and seek legal advice early where there is a risk of injury or illness occurring. Don’t think of a recall as a risk itself, but as a tool for managing risk.
- Allergen contamination or incorrect disclosure is the leading cause of recalls in Australia. Have your product labels and other marketing claims reviewed by experts like the KHQ Food & Beverage team, and seek advice on identifying and minimizing contamination risk.
KHQ Food & Beverage, a division of KHQ Lawyers, provides legal services tailored for clients in the food & beverage industry. We specialise in the tricky, sticky, and nitty-gritty, so you can concentrate on what’s important: food, glorious food.
Contact us today for an obligation-free chat about food recalls, allergen labelling, and any other queries you may have: firstname.lastname@example.org.