Stopping product recalls from becoming a car crash

  • News
  • August 20, 2015
  • Sarah Dunn
Stopping product recalls from becoming a car crash

“A new car built by my company leaves somewhere traveling at 60 mph. The rear differential locks up. The car crashes and burns with everyone trapped inside. Now, should we initiate a recall? Take the number of vehicles in the field. A, multiply by the probable rate of failure, B, multiply by the average out-of-court settlement, C. A times B times C equals X. If X is less than the cost of a recall, we don't do one.”

The Fight Club monologue makes a certain kind of sense, but the short answer is that life doesn’t really work like that – at least, not in New Zealand.

Here, the Ministry of Business, Innovation and Employment has the power to implement mandatory recalls under the Fair Trading Act if goods being sold don’t comply with a product safety standard or could cause injuries. To the relief of those currently considering checking their rear differential, this means that the Government can act if a supplier like the Fight Club car company hasn’t taken sufficient action.

Food recalls are handled by the Ministry of Primary Industries, those for medicines and medical devices are regulated by Medsafe, and motor vehicle recalls are listed by the NZ Transport Agency.

Most recalls aren’t as dramatic as a car crash, but the idea behind them is to remove the product from consumers before it causes harm. Some of the recalls covered by The Register include a series of teddy bears given to children in hospitals which posed a choking hazard, and trousers sold through Cotton On and The Iconic which could contain a cancer-causing dye.

Packaged chicken meals by Kaweka and Weight Watchers were today recalled because they contain bone fragments, and a batch of Perail de Brebis cheese is at risk of containing listeria and salmonella bacteria.

The Ministry of Consumer Affairs says the responsibility for ensuring that products supplied to consumers are safe falls upon retailers, and it is up to them to keep track of recalls and similar matters. Failing to ensure the safety of goods or following legal requirements can result in prosecution and fines.

When a recall is issued, Consumer Affairs says the retailer’s role in the process is to know the product’s target market and those who have purchased the product. In a scenario where the importer or distributor is coordinating a recall in a situation where they have supplied unsafe goods to a range of retailers, Consumer Affairs says the retailers will need to contribute by supplying customer and advertising data and helping to communicate the recall, but a retailer could end up coordinating the whole operation if they are the most capable player involved.

Consumer Affairs has provided a .pdf resource explaining all about product recalls here.

Consumer NZ research writer Jessica Wilson says retailers need to know that they are required to notify Consumer Affairs when recalls come through, and to post the recall on Consumer Affairs' register. This requirement was brought in last year, and non-compliance can lead to a $2,000 fine.

One of the main problems for consumers is that not every item can be recalled, Wilson says. She quoted research indicating only around 50 percent of products make it back to the manufacturer.

"It's important that retailers notify Consumer Affairs, do the advertising and don't just let it slide."

Jo Williams is the manager of product and consumer safety at GS1 New Zealand. The company handles a system called ProductRecallNZ, launched in 2012, which helps suppliers communicate with retailers about recalls.

It was used 144 times to communicate recall and withdrawal information between trading partners last year, and handled 75 percent of all notifications received by major food and grocery retailers. Foodstuffs and Progressive are major partners.

Williams says ProductRecallNZ focuses mainly on food and grocery, but is in the process of extending to encompass general retail.

The reasons behind recalls and withdrawals handled by ProductRecallNZ have ranged from incorrect product labelling to product contents contaminated with foreign objects.

GS1 New Zealand chief executive Peter Stevens says recalls are only publicised when concerning products have already found their way into consumers’ hands: “ProductRecallNZ is most successful when few people hear about it because, in each of the instances, products have been pulled back quickly and with minimum fuss.”

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