Food and drink companies warned: global supply chain means global risk

While a global supply chain can deliver huge benefits for the food industry, it also internationalises and significantly increases the risk if a product recall occurs. Companies must therefore ensure they are fully equipped to respond effectively to both the initial recall and any subsequent litigation by putting in place adequate protections at the outset.

That’s the advice from Arthur J. Gallagher, one of the UK’s largest insurance brokerage and risk management companies, in its latest podcast dedicated to food product recall issues.

Carried out in association with one of the UK’s leading legal experts on recall Malcolm Sheehan QC from Henderson Chambers in London, the podcasts give a bite-size run down on recall risks for food industry leaders.

In the latest edition, the fourth in a series of five, Malcolm and Garry Moseley, who leads Gallagher’s specialist Food and Drink team within the company’s UK Major Risks Practice, discuss supply chain litigation and how product recall and liability policies respond.

One of the key learning points was that, while global supply chains can deliver enormous benefits, from financial savings to cutting-edge ingredients, they can also create increased risk and exposure.

A global supply chain raises the possibility of having to litigate in a foreign country – and the increased costs that attracts in terms of translation and appointing additional counsel – should problems occur with a supplier.

Garry Moseley said: “We live in a global market now and, just like Gallagher itself, companies will do business all over the world.

“What companies often fail to consider, however, is the potential increased risk that this creates.

“That exposure and the potential consequences need to be built in to product recall plans and associated insurance policies from the outset.

“Companies must ask themselves if they are equipped to deal with a recall that could cover multiple countries.

“For example, are they covered and prepared to have to litigate and recall products across different continents, languages and ways of working.

“If companies are not, and they are working across the globe, they need to put in place adequate protections in the event that something goes wrong.”

Other questions raised and answered in the latest podcast include:

• What is supply chain litigation and when is it required?
• What legal issues frequently arise during supply chain litigation?
• How has the globalisation of supply chains impacted litigation?
• What is the role of product recall and product liability insurance policies in supply chain litigation

The bite-sized podcasts, which last between six and eight minutes, are designed to provide a helpful insight for chief executives and senior leaders across the food and drink industry about the legal and regulatory issues which come into play when preparing for and executing a product recall.

To listen to the podcast and previous podcasts, please visit: http://www.ajginternational.com/news-insights/articles/insights/food-supply-chain-litigation-podcast/?utm_medium=Organic&utm_source=LinkedIn&utm_campaign=Content-WC-10-Oct&utm_content=supply-chain-litigation.