Tougher monitoring sends EU product safety warnings soaring

Product safety warnings across Europe soared last year – but a new report says the increase is more to do with tougher monitoring and controls than shoddier goods reaching the market.

The European Commission tackled a “summer of recalls” last year, when hundreds of thousands of toys, mainly originating in China, were taken off the shelves following a series of safety alerts.

EU Consumer Commissioner Meglena Kuneva responded with plans for tighter checks along the supply chain, and insisted the rate of recall was partly to do with the efficiency of the EU alert system under which a faulty product found in one member state is swiftly identified in all EU countries and removed from sale.

Today’s report, commissioned from Mori by international law firm Freshfields Bruckhaus Deringer, studied 100 multinational manufacturing and retail companies in the food, car, electronics and household goods sectors, and found about half put the rising recall tally down to tighter regulation and enforcement of existing safety rules, while 27% thought consumers were more primed to complain.

About one quarter said manufacturing problems, and lengthy supply chains which made it harder to carry out effective quality controls, were the main factor.

The level of product safety regulation is considered “about right” by three-quarters of companies, while 45% of companies who have dealt with a product safety problem say there is damage to a company’s reputation and customer loyalty.

One third said such an incident had adverse financial effects.

The report, 'Getting It Right – Product Recall In The EU', comes after the European Commission recorded a 56% rise in consumer safety alerts in the first 10 months of last year compared with the same period in 2006.

John Davies, head of Freshfields’ consumer products and retail sector practice, said the European safety system was working well.

“Most companies are getting it right. There is a pretty high degree of satisfaction with the system, though problems remain in a few areas,” he said.

Andrew Austin, senior associate in product risk and liability at Freshfields and co-author, added; “There are still some problem areas. In particular, product safety issues frequently don’t respect national borders, and inconsistent laws and enforcement practices worldwide can make it difficult for multinational companies to respond.”

Companies must take “corrective action” when a product safety problem is found, must “immediately” notify national consumer authorities. The European Commission then sends out EU-wide safety alerts.

Separate, but similar, safety action is set out in a 2005 law covering food. Under it all “food business operators” – from producers to supermarkets and restaurants, are obliged to act on discovery of food or drink risks and notify the Commission in Brussels.