By Julie Ross, International business development director and Luke Evans, business development manager
As we enter the third calendar year of the COVID-19 pandemic, regulators are adapting to the “new normal.”
As reported in our latest edition of the recall index report, product recalls rose by over a quarter (25.5%) across key European industries in 2021 — signalling a return to pre-pandemic levels.
Now more than ever, it is crucial for companies — from manufacturers to suppliers and retailers — to be aware of regulatory changes and be ready for recalls and related threats. Our latest report offers a year-in-review analysis of 2021 recall activity and insightful predictions for 2022. The report also features insights from several of our strategic partners at leading law firms to help you prepare for the increased risks associated with product innovations and changes to regulations in your industry.
Looking back at 2021
Recall activity increased as consumer demand returned to pre-pandemic levels and regulators focused on sustainability with new rules that targeted packaging and labelling, promoting a circular economy, and reducing vehicle emissions. The only industry that did not experience an annual uplift in recalls was toys, although, as we have seen in the last three years, Q4 accounted for the greatest proportion of events.
The pharmaceutical and electronics industries saw the biggest jumps in recall activity, with each experiencing an uplift of nearly half (45%) from the year previous. While the automotive, food and beverage, medical device, and clothing industries did not see as large an overall increase, certain product categories were significantly affected due to the narrowing focus of regulators’ on sustainability, connected devices, and consumer safety.
What to watch for in the year ahead
Supply chain disruptions will continue to affect industries as Brexit and other ongoing pandemic related challenges endure. As outlined in the report, these challenges will be compounded by sweeping regulatory changes to modernise laws that pre-date the emergence of online marketplaces and connected devices. While these changes are geared towards protecting consumers, they will likely create new challenges for companies who may need to adapt their operations and/or products to comply.
How 2021 recalls compare to the previous year
· Automotive recalls rose across Europe in 2021, experiencing an 18% increase compared to 2020. Consistent with the past 10 years, injuries remained the leading annual cause of recalls (78%). The number of recall events in 2021 was 128% greater than the industry’s annual average over the past 15 years.
· The food and beverage industry saw 2021 recall events increase by 25% over 2020 numbers, and exceed 2019’s pre-pandemic numbers by nearly 17%. Fruit and vegetables was the most impacted product category in 2021, breaking a two-year streak for nuts, nut products and seeds.
· Pharmaceutical recall events increased 48% in 2021 after falling 40% during the height of the pandemic in 2020. Safety concerns were the leading cause of recall activity. A decline in the number of recall events listed as ‘other’ signals that manufacturers have improved their safety and reporting processes, leading to a better understanding of why recalls occur.
· Medical device recalls returned to 2019’s pre-pandemic levels in 2021, with a 40% increase in events over 2020 numbers. Quality issues were the leading cause of recalls for the year, but software became the leading cause of recalls in Q3 and Q4, perhaps pointing to regulators’ closer focus on software as a medical device.
· The clothing industry saw a slight increase in recalls in 2021, but the number of recall events (151) remains below pre-pandemic numbers. Children’s apparel remained the top product categories affected by recalls, indicating that children’s safety remains a primary focus for regulators.
· The electronics industry saw the second greatest jump in recall activity in 2021, with a 45% increase over 2020 numbers, marking the second year in a row of greater recall activity. For the third consecutive year, USB chargers were the most recalled product. Electric shock was the leading cause of recall activity in 2021, making up nearly 50% of all events.
· Unlike other sectors, the number of toy recalls dropped by 28% in 2021 from 2020 numbers. While toy recalls did increase in Q4, the broader trend marks two consecutive years of declining recall activity for the industry. Plastic dolls remained the most recalled toy for the third year in a row and chemical risks were the most common cause of recalls in 20211.
With a significant number of new regulations expected in 2022 and the presence of residual issues from the pandemic and supply chain disruptions, companies can expect to face new and existing challenges this year. Companies across all industries would be wise to closely re-evaluate all manufacturing processes, scrutinise supply chain partners, and invest time and resources to prepare recall management, crisis and communications plans.
Engaging with expert partners is also crucial for companies. Not only will companies benefit from partner’s experience and insights, but you will also see significant savings in regulatory and litigation costs, as well as time and internal resources. Partner expertise will also help you honour your commitments to customers, supply chain partners, industry groups, and regulators, while protecting your reputation among the stakeholders that matter most.
See more recall data, trends and predictions, along with additional insights and commentary from some of our strategic partners in the latest edition of our European Recall Index report – available for download here.