What should you expect during a recall?

Traceability
August 25, 2020
Contributors:
Alan Grant
Written By:
Jessy Gervais

No food processor plans to have a recall. Most food processors don’t even want to consider the idea of having to go through one. However, hundreds of companies go through recalls (public or otherwise) every year.

This article is part of an ongoing series that aims to demystify and simplify complex food safety topics surrounding the concept of traceability and recalls. In this series, we’ll cover everything from what to expect from recalls to setting up traceability programs and more. We take real questions that we’ve received from our customers answered by professionals working in the food safety industry every day.

If you are reading this and have ever wondered what goes on during a recall, you’re in the right place.

Let’s get started!

What are my legal obligations for food safety and product recalls?

The federal Food and Drug Act states that no person or company may sell any food that could be potentially harmful to the public. This statement is a boilerplate statement that protects all Canadians.

The Safe Food for Canadians Act went into force in January 2019 and is administered by CFIA. They state that the three foundational pillars of the regulations are as follows:

1. Obtain a license

If you import, export or trade inter-provincially, you must be licensed by CFIA. This license gives CFIA the line of sight into who is engaged in buying and selling food on a national and international basis.

2. Have a Preventive Control Plan (PCP)

A food processor must show documentation that they have the processes and controls in place to demonstrate that foods they manufacture, buy or sell have been prepared under hygienic conditions and are safe. This documentation is referred to as a preventive control plan within the SFCR regulations and is a requirement to obtain an SFCR license.

3. Have a Traceability system

A traceability system allows food processors to track and trace the origin of all ingredients used in the manufacturing of their finished products and to whom and when those finished products we sold. Through the deployment of an effective traceability system, license holders can quickly remove from sale any food identified to be potentially harmful to protect all Canadians.

The Safe Food for Canadians regulations requires that companies that sell their product within provincial borders have a traceability system and recall plan in place to operate legally.

Who has regulatory oversight for food safety in Canada?

Health Canada has overall responsibility for the safety of foods in Canada. They set the standards based on sound science and act as advisors to the provinces on risk assessments of potentially hazardous foods.

The Canadian Food Inspection Agency (CFIA) enforces the federal regulations for those companies that import, export, and manufacture or sell foods interprovincially.

Companies that manufacture and sell within a province fall under the jurisdiction of the provincial Ministry of Agriculture (for meat, fish, dairy, fruits, and vegetables) or the Ministry of Health (all others)

How are recalls started?

A recall begins when a product(s) are identified as non-compliant to the Food and Drug Act, meaning they are potentially unsafe to the consumer. The common causes of recalls are:

Biological hazards: foods containing pathogens like listeria, E. coli 0157 or salmonella

Chemical hazards: foods containing undeclared allergens like peanuts

Physical hazards: foods containing broken glass or shards of metal

Types of hazards; biological hazards, chemical hazards, and physical hazards

These hazards may be identified by a manufacturer or through consumer complaints in which they initiate the recall themselves. Or the hazards may be reported to a government agency that investigates, confirms the hazard, and contacts the manufacturer to initiate the recall.

What is the difference between a class 1 recall and other classes? Are all recalls class 1 automatically?

When you hear about a recall in the news, you’ve likely heard the term “Class 1”. A class is a label that is given to product recalls. It describes the severity of the recall in question (similar to categories 1-5 in hurricanes).

We classify recalls into three categories:

Class 1: those foods that present a high risk of illness to the consumer

Class 2: those foods that present a medium risk of illness to the consumer

Class 3: those foods that present a low or no risk to the consumer

It’s important to note that recalls are not automatically Class 1. However, in the abundance of caution demonstrated by Health Canada in their desire to protect us, all Class 2 recalls are becoming increasingly rare in favour of Class 1.  Class 3 recalls cover products that may be safe to eat but are not compliant due to errors like incorrect labelling.

Are recalls the only reason that we remove a product from store shelves?

Recalls are not the only reason that products are pulled from shelves. A fourth category does exist which industry and government classify as a product withdrawal. These are circumstances where product safety or legal compliance is not an issue, but rather the brand owner’s quality standards have not been met (e.g. off colour or taste).

These products may be withdrawn from sale in the same process as a recall, but it is not a visible or public notification. Communications are directly between the manufacturer and its customer.

Who handles recalls in Canada? In the USA?

In Canada, recalls are managed by the Canadian Food Inspection Agency (CFIA). In the USA, recalls are governed by the Food and Drug Administration (FDA).

You can find more information about the CFIA and FDA at their websites:

https://www.inspection.gc.ca/

https://www.fda.gov/

What actions am I required to take during a recall?  If one product gets recalled, does it affect all of my products?

If a product enters recall, the company’s product recall plan should be activated to begin removing all affected products from sale as soon as possible. Further, the CFIA initiates an investigation to determine the root cause of the food safety issue to determine:

(1) the potential scope of the problem and whether or not other products could have been affected and may also be necessary to recall and

(2) what corrective actions are needed to prevent a recurrence of the issue. The priority is to identify the presented risk to the public and move quickly to limit the damage done.

You may hire a public relations representative to speak on behalf of the manufacturer if there is no person with media training. It is essential the company puts its best image out to the public, and you want a calm spokesperson in front of the camera if there are cameras involved. All media inquiries should go through a single point person to keep messaging consistent. The messaging should be clear both internally and externally.

Do not forget to keep your staff informed of the progress as they may need reassurance that their work and jobs are safe.  A disgruntled employee who says the poor company practices were a ticking bomb waiting for a recall like to happen can destroy a brand and a company.

CFIA routinely conducts recall effectiveness checks where they interview a manufacturer’s customers to confirm a recall communication was received and action was taken. CFIA also looks for updates from the manufacturer on the recovery numbers of recalled products to ensure the original quantity is accounted for and all returned product is to be disposed of appropriately.

The recall cannot be closed until all affected product has been retrieved and accounted for, so there is no further risk to the public.

What happens if my exported product enters recall? What are the regulatory consequences?

The Canadian manufacturer and their foreign agent will have to deal with the government agency in a foreign country (e.g. FDA in the USA). Protocols between Canada and the USA are similar. Unsafe products may not be allowed to return across a border. Do not be surprised if the foreign government orders to destroy potentially unsafe products.

What fines are issued? How much can the penalties be?

Administrative Monetary penalties can vary for minor violations up to $10,000. However, fines can be in the hundreds of thousands if a recall uncovers an act of fraud by the manufacturer. The severity of the fine is consistent with the scope and extent of the fraud.

What are the costs associated with a recall?

Every recall is unique. Because of this, it is difficult to suggest what the average cost of a recall may be. However, we can look at the many variables that affect the financial impact of a recall to understand better what is possible.

Root Cause Analysis

First, the root cause analysis of the recall and traceability of the recalled product will determine how many production lots are affected. As the scope of the recall increases, the number of products affected will increase and impact the potential costs. An effective traceability system can easily pay for itself by quickly identifying the potentially contaminated raw ingredient (and all product that is affected). It could mean the difference between recalling a few lot codes versus having to recall every product that uses that ingredient.

Risk Assessment

Second, a risk assessment of the root cause of the recall determines whether you can rework the affected product or if you must destroy the potentially contaminated product. Any salvage plan would require the approval of the CFIA. Depending on the outcome of the risk assessment, there could be costs associated with sorting out defective products or expenses related to safely disposing of the recalled product.

Additional Costs

Third, there are all of the additional costs outside of product loss. Depending on who the manufacturer sells to, some large retailers levy administrative penalties on their suppliers who have recalls to recover their costs of managing the situation. There is also the management cost to manage all of the staff time that the recall team contributes to managing the recall. Did the company hire a media relations firm to help protect their brand image? Did they hire a food safety consultant to help navigate discussions with CFIA? Was their legal team involved in addressing potential liability claims for consumers who felt they were made ill by the affected product? The answers to these questions could impact the potential costs of weathering a recall.

Recall Costs; product loss and additional costs

No company plans to have a recall. However, all companies should schedule an annual mock recall to ensure they have the process in place to handle such a situation. It is an effective way to help minimize potential costs, which can quickly escalate into big numbers.

How can I limit the cost of recall once it has happened? What is the best way to limit the price of a recall?  

There are several ways to limit the cost of a recall:

1. Perform a thorough root cause analysis to determine the cause and scope of the problem.

If other products may be affected, and therefore should be included in the recall. It can be very damaging to a brand if the recall keeps expanding to additional lot codes or additional products from the same facility and keeps your brand name in the public eye for a prolonged period. It erodes trust as it may suggest you do not know what you’re doing or were trying to hide or avoid further consequences.

2. Use all efforts to retrieve affected products from the marketplace with a real sense of urgency.

Failure to act quickly may result in additional consumer s becoming ill, and this can quickly escalate the legal and financial liability of the manufacturer.

3. Be honest and transparent to the public.

Honesty and transparency is the only way to build trust in your brand that will assure consumers and trading partners that you are reliable to purchase from again.

If my product enters recall, will suppliers stop purchasing from me? Will customers stop buying my product?

It’s important to remember that at the end of the day, humans produce food at these facilities, and humans do make mistakes. Many of the top food manufacturers with depth in experience and expertise still suffer from a product recall. However, you can maintain trust and minimize damage to brand value by handling a recall with transparency, honesty, speed, and professionalism. Industry partners and consumers understand mistakes can happen. Reassure everyone that the brand is safe as no one wants to risk-taking unsafe food home to their family.

Could I be shut down?

Yes, a food manufacturing facility could shut down if the root cause of a recall is a lack of proper controls to allow other food products to be prepared under hygienic conditions and in a safe manner. This is avoidable with the development and implementation of a preventive control plan (required for an SFCR license).

How fast must a recall be completed?

The sooner a company removes potentially harmful food from the sale, the lower the cost and liability. The rule of thumb is to be able to assemble all records within 24 hours to make a credible risk assessment on the cause and scope of the issue and whether to move forward with a recall. But every situation is unique, and there is no hard rule.

What is the difference between a mock recall and a recall?

A mock recall is a desk exercise that simulates a real-life scenario and should be conducted annually in every facility to test the system and make sure it works effectively. You do want to test your recall plan in a live event.

Conclusion

Mistakes are bound to happen, and when they do, you want to ensure you’re prepared. If you are facing a potential recall, make sure that you have an outlined and validated recall plan in place. Take the time to perform mock recalls and train your staff on the protocols.

Not sure how to develop a recall program? Please take 15 minutes to talk to one of our experts to figure out how FoodByte can help you develop a recall program.