LONDON 25 May 2021 – Sedgwick, a leading global provider of technology-enabled risk, benefits and integrated business solutions published its latest European product recall index report today.
Features in the report include product recall data, trends and predictions as well as legal and regulatory insight to help manufacturers and retailers prepare for the increased risk created by product innovations and evolution in the regulation of key sectors. Such sectors include automotive, food and beverage, pharmaceuticals, medical devices, toys, electronics and clothing.
To download the recall index report, visit European product recall index report.
First quarter recall data
- Automotive recalls in the first quarter of 2021 increased 26% compared to the like-for-like average in 2020 and exceeded the quarterly average of a pre-pandemic 2019 by 20%. This demonstrates recall events are on the rise despite ongoing operational challenges experienced by global car and original equipment manufacturers.
- Food and beverage recalls were up 11% compared to quarterly averages in 2020 but down from the fourth quarter of last year. Contamination is still the leading cause of recalls in this sector.
- Pharmaceutical recalls increased 35% in the first quarter compared to quarterly average recalls in 2020. Safety (27) and failed specification (17) recalls were the biggest threats and there is a chance for these types of recalls to continue to increase as regulators find innovative ways to audit and inspect manufacturers and a resumption of business-as-usual inspections post-pandemic.
- Medical device recalls increased 40% compared to the quarterly average in 2020. Recalls were mainly driven by quality issues, followed by specifications issue, software, and mislabelling.
- Electronic recall activity in Q1 2021 is 10% higher (62) than 2020’s quarterly average of 56 recalls. This suggests a continued focus on ensuring the safety of electronic products as consumers spend more time at home due to the pandemic.
- Toy recalls were down by 60%, from 262 recalls in Q4 2020 to 105 events in Q1 2021. Chemical risks are a cause for concern as they correlate with upcoming buying trends including plastic dolls and character figures. We expect to see a surge in demand for these types of toys, coupled with increased risks of counterfeit and fraudulent products.
- Clothing recalls in Q1 2021 remained steady with average quarterly volume in 2020 but decreased by 43.8% compared to Q4 2020. Children’s products combined, experienced the greatest share at 66%, with key causes including injury risk (9), choking hazard (6), and strangulation hazard (4).
“The current global pandemic will have a continued impact on all industries, particularly those with global supply chains and a heavy reliance on efficient manufacturing. However, as we start to emerge, the risks will amplify (beyond manufacturing and logistics) as regulatory oversight and procedures return to pre-pandemic levels. It’s creating a perfect storm that has the potential to see a surge in recall activity – across the supply chain. Industries need to be primed and ready for any recall or market withdrawal situation and this report serves as a guide to ensure businesses are prepared,” said Mark Buckingham, recall consultant of Sedgwick’s international brand protection division.
“These trends supplemented by developments in the regulatory and risks space will give rise to a host of reputational risks facing manufacturers across all sectors, particularly in a legal environment that is being increasingly friendly to claimant actions.”
Looking ahead in 2021
- Transparency and planning will be the key to effective crisis management for any industry experiencing a recall situation. Crisis planning must include these critical components: recall plans, complaint investigation and effective customer engagement.
- The first step in protecting a business reputation is to establish a strong culture that ensures regulatory compliance, builds consumer trust, and prepares the company for the times when a recall or corrective action is required.
- For the pharmaceutical industry, we can expect the EU member states and UK regulators to adopt a more traditional approach to oversight activities and recently created virtual approaches to audits. Regardless of the approach taken, we expect the focus to be on traditional pain points that lead to recalls such as safety and efficacy risks, labelling issues and litigation risk.
- The medical device technology industry will face a direct impact from two major developments including the New European Medical Device Regulations which are due to be enforced in May 2021 and impervious quality control procedures covering software and hardware.
- The European Parliament adopted a resolution on the new circular economy action plan in February 2021, demanding additional measures to achieve a carbon-neutral, environmentally sustainable, toxic-free, and fully circular economy by 2050. For the clothing and textile industry, this means a product safety recall will need to be handled with Circular Economy Action Plan obligations in mind.
The report further suggests companies across all industries should re-evaluate all manufacturing processes, invest some time and resources to prepare their recall management, crisis and communication plans, and review insurance policies to ensure they protect the business in the event of a recall or safety inquiry.
This industry leading research and analysis was designed and delivered by Sedgwick’s experts in best practice recall, remediation and retention solutions. Sedgwick works in partnership with clients across all industries to manage the risks and minimize the impacts of in-market business and product crises.
The recall index is produced by Sedgwick’s brand protection experts every quarter. It is the only report that aggregates, and tracks recall data to help industry stakeholders navigate the regulatory environment, product recalls and other in-market product challenges. To download the recall index report, visit European product recall index report
For more information, please visit www.sedgwick.com/brandprotection
About Sedgwick Sedgwick is a leading global provider of technology-enabled risk, benefits and integrated business solutions. The company provides a broad range of resources tailored to our clients’ specific needs in casualty, property, marine, benefits, brand protection and other lines. At Sedgwick, caring counts®; through the dedication and expertise of more than 27,000 colleagues across 65 countries, the company takes care of people and organizations by mitigating and reducing risks and losses, promoting health and productivity, protecting brand reputations, and containing costs that can impact the bottom line. Sedgwick’s majority shareholder is The Carlyle Group; Stone Point Capital LLC, Caisse de dépôt et placement du Québec (CDPQ), Onex and other management investors are minority shareholders. For more, see www.sedgwick.com.