UK food manufacturers suffering as EU Red Tape drives product removals up 60%
The number of food and drink products being removed from shelves as a result of unreported allergens on packaging has grown 60% in the UK last year - highlighting a growing pressure on food manufacturers to conform to rigorous EU food reporting standards, according to research from commercial law firm EMW.
EMW says that 96 products were withdrawn in 2015 due to unlisted allergens on packaging - up from the 60 withdrawals in 2014.
EU legislation, which came into force in December 2014, has significantly toughened up allergen labelling requirements in pre-packaged products which has driven the increase in the number of products withdrawn. The new regulation states that allergens must be emphasised in the ingredients list.
Prior to the new legislation, manufacturers carrying out product risk assessments for allergens may have considered the amount of allergens in a product so small that the risk was negligible. Retailers and supermarkets, concerned about contravening EU laws, are putting food items increasingly under the microscope which has led to a growing number of product removals.
EMW explains that the cost of food withdrawals can be hugely damaging to companies, with potential losses running into the hundreds of thousands. These costs include transport and logistics; communications; product destruction; retailers and customer reimbursements; and legal fees.
EMW points out that indirect costs of product withdrawals can be equally or more damaging to companies in the long-run as brand loyalty and reputation - which can take years to build up - can be impeded. Companies may also suffer from the potential loss of customer loyalty as long-term customers find alternative products during periods of withdrawal.
Sebastian Calnan, Consultant at EMW, said: "Public scrutiny on food manufacturing has intensified greatly in recent years, often with good reason. However, the recent and seemingly heavy-handed crackdown on food manufacturers regarding allergen labelling has undoubtedly put a massive strain on the industry."
He added: "With a large upswing in the number of food items being removed, food producers have to be extremely aware of the tough EU criteria to ensure they do not fall foul of the legislation and suffer from any subsequent losses to revenue.
"Loss of market share during withdrawal is a growing issue that companies have to face. Businesses increasingly have to put contingency strategies in place to be able to respond quickly and efficiently to allergen withdrawals, which in addition to the direct costs, can be extremely expensive and burdensome."