The need to initiate a product recall usually occurs unexpectedly and it may involve a specific product batch or a broader range of products. Which action should a company take when a product must unexpectedly be removed from the market? We have gathered below tips to help you to succeed in a product recall case.
What is a product recall?
A product recall is a process of removing products causing a risk or danger from the market and retrieving such products already in the possession of end-users.
There are various risks and dangers related to products. Malfunctioning airbags in cars, toys causing risk of choking or suffocation and inadequate allergy labelling in food packaging are common examples of situations in which a product recall must be initiated. The manufacturer of the product or another operator in the supply chain, such as the importer or the distributor of the product, must take action to repair or remove the products causing a risk or danger from the market in a recall procedure.
Key factors in a successful product recall are swift reaction and efficient communication with the consumers and other end-users, who have purchased the product, the distributors as well as with the competent authorities. Thus, companies should be aware of the procedures and practical instructions regarding product recalls.
Once a manufacturer or another operator in the supply chain has discovered that the products placed on the market cause danger, it must take action without delay. The fewer defective or faulty products have been placed on the market and the shorter time the products have been on the market, the lower the consequent damage. Moreover, identifying and reaching the consumers and other end-users who have purchased the product might be easier as they are fewer.
However, faults and defects requiring action are often detected only after a long time has elapsed since the manufacturing of the products or their placement on the market. This again is no reason to postpone the initiation of the recall measures. A prompt reaction also enables the manufacturer or other operator in the supply chain to mitigate the reputational damage which the dangerous or defective product causes it.
Assess the severity of the risk or danger
Generally, not only the manufacturer of the product but also other operators in the supply chain are responsible for assessing the severity of the risk or danger caused by the product and for taking measures to prevent any damage from occurring. However, no operator should abstain from acting in the belief that the other operators will see to the assessment of the risk or danger and organize the possible consequent product recall. The operators within the supply chain could agree between themselves on who is best suited to coordinate the recall procedure. This should not, however, cause any delay in the initiation of the recall process.
The assessment of the severity of the risk or danger should be carried out considering the principle of prudence which means that the level of the risk or danger should be assessed based on the worst-case scenario. Where a product causing minor risk might not call for any measures, a serious risk or danger is always a reason to thoroughly find out what action is expected from the operator in each individual case.
Contact the competent authorities
Competent authorities should be notified of a product causing severe risk or danger and the measures taken in response thereto without undue delay. The guidance and practices as regards product recall procedures vary somewhat from authority to authority but the notification is usually filed by filling out a specific form provided by the authority and delivering it to the authority as requested.
The competent authority is determined based on the product subject to the recall procedure. The competent authority in food product recalls is the Finnish Food Authority together with the municipalities. They should be notified immediately after a recall procedure has been initiated. Where the product causing a severe risk is a common consumer good, a toy, an electrical appliance, or a machine, the competent authority is the Finnish Safety and Chemicals Agency (Tukes). A notification on a recall campaign initiated due to a defect or a fault causing serious danger detected in a vehicle or its component is filed with the Finnish Transport and Communications Agency Traficom.
The safety of certain products is subject to supervision of several different authorities, in which case the authority responsible for the supervision is primarily the authority which has the competence regarding the circumstances in which the possible danger has been identified or in which the product is commonly used. In unclear situations the economic operator may, however, turn to the authorities to find out which authority shall be informed on the matter.
It is worth noting that the obligation to notify the authorities of the identified risks and related measures may also extend to the authorities of other EU Member States and EEA countries if the product has been sold outside the home country.
Reach out to the end-users and distributors
Reaching out to the end-users and distributors of a product causing serious risk or danger and communication with them are critical for the success of a product recall. The obligation to inform the end-users relates to the mitigation of the risk they are exposed to. Additionally, the authorities in general require information regarding the communication methods that will be used to inform the consumers and other end-users about the risk or danger caused by the product. Planned communication methods must be effective and precise.
Requirements regarding the communication may vary depending on which authority has competence over the product recall. Tukes, for example, imposes somewhat more stringent formal requirements on the communication than Traficom. However, the rule of thumb is that the communication should be as comprehensive as possible and reach all end-users who have purchased the product which causes a risk or danger. Moreover, communication must be clear and must not be confused with marketing.
The most common methods of communication in product recalls include contacting the end-users individually by letter or telephone, public announcement by press releases in local newspapers in the region where the products have been sold, and where appropriate, nationwide, as well as notices on the websites of the manufacturers and other operators. Social media is increasingly effective way to reach individual customers but also companies. If a company has social media channels, the notice of a product recall must therefore be published also via these channels.