Legal implications of Sudan I recall

The Food Standards Agency (FSA) recall of products potentially containing the illegal red food dye, Sudan I, has risk management implications for all food producers and retailers, and not only those of the hundreds of food products affected.

Background

Sudan dyes are not found naturally in food and the EU does not allow them to be used in food. The FSA alert that was circulated on 18 February 2005 stated "Sudan I could contribute to an increased risk of cancer and it is not possible to identify a safe level or to quantify the risk. However, at the levels present in these food products the risk is likely to be very small."

In June 2003 the European Commission moved to stop the import into the EU of hot chilli products containing "Sudan red 1". Following this decision Member States had to ensure that imports of crushed or ground hot chilli were tested to ensure that Sudan red 1 was not present. Random checks were also to be carried out on products already on the market.

These emergency measures were extended by the Commission in January 2004 to include that curry powder could only be imported into the EU if they were accompanied by an analytical report which showed they did not contain any Sudan dyes.

Current Situation

Premier Foods who distributed the affected Worcester Sauce reportedly received the chilli powder ingredient that was the source of the contamination before July 2003, when regulations first required that food be tested for the substance. Because the product is used as an ingredient in a number of branded and retailer own-label products, as well as being sold as branded bottles of Worcester Sauce, the recall of over 400 products is one of the largest ever carried out.

Legal Implications & Lessons to Be Learned

Due Diligence – There is always a question whether to apply a retrospective review where new product safety legislation comes into force. When it can affect a back-log of stock or there are ingredients with a lengthy shelf life "due diligence" would entail a need to re-test products or ingredients.

A commercial decision will need to be taken to assess whether or not a suppliers' assurance of compliance will be sufficient. Case law in the area is inconsistent. It is recommended though that some level of additional quality checks and testing should be carried out.

Traceability – The requirements for traceability between businesses operatives came into force on 1 January 2005. The European food framework regulation EC/178/2002 laid down in January 2002, (please click here for details, this will open a PDF in a new window) sets out the requirements for traceability under Articles 19 of the regulation.

The basic requirements of a food traceability system are the ability to identify products/ingredients and processes at any point in the supply chain and the recording of this identity information. In practice, traceability systems are record keeping procedures that show the path of a particular product or ingredient from a supplier into a business, through all the intermediate steps which process and combine ingredients into new products, and through the supply chain to consumers.

Documents should be kept up to date and document retention policies reviewed. This is particularly the case where there are long-life products involved.

Recall & Customer Help – A recall system and customer complaints must be in order to rapidly remove products and deal with any complaints/queries.

Whilst food companies had been under the legal duty to ensure that all food in their chain of supply was safe, the new rules under Article 19 of regulation 178/2002 now formally provides three levels of duty:

• Where a food business has reason to believe a food they have imported, produced, processed, manufactured or distributed is not in compliance with the food safety requirements that company must (where the food has left their immediate control) immediately initiate procedures to withdraw the food in question from the market and notify the local authorities.

Where the product may have reached the consumer, consumers must be effectively and accurately informed of the reason for the withdrawal. If necessary products must be recalled when other measures are not sufficient to achieve a high level of health protection. i.e. Recall is only required where other measures are insufficient to achieve a high level of health protection.

• Retailers and distributors are obliged to participate in the withdrawal and the dissemination of information.
• There is additionally a further higher obligation on any food business operators, if they have reason to believe that a food on the market may be injurious to human health, there is a blanket requirement, whether or not they are connected with the food itself, to immediately notify the competent authorities.

All food business operators must collaborate with the competent authorities on action taken to avoid or reduce risks posed by a food which they supply or have supplied.

Brand Reputation – The Rapid Alert System for Food & Feed and the Hazard Alerts provided by the Food Standards' Agency are blunt instruments and can impact on the reputation of a manufacturer or retailer and/or their market share. There is little evidence of material risk to public health but the alarm caused to consumers is evident. A rapid response from industry to any agency enquiries and the provision of robust risk-based evidence may serve to better inform these announcements.

Media Relations – Spokespersons should be primed with relevant information in any withdrawal or recall scenario. Inaccurate and misleading reporting should also be corrected swiftly. The various codes, voluntary and statutory, provide mechanisms and opportunities to secure corrections and apologies without the need for recourse to, often unattractive, legal challenges for defamation.

Insurance & Contract Terms

Assumptions may be made that losses will ultimately be insured and this is problematic. The extent of any insurance is likely to be limited as compared to the overall nature of the loss. This is because recall policies generally provide only quite restricted cover and are not a standard feature of product liability insurance policies.

Much of the loss in the current Sudan I recall may, in effect, be borne by industry itself. There is therefore likely to be considerable litigation based on supply contracts, interpretation of terms and conditions, and relevant exclusions of liability for the standard conditions as to quality and fitness for purpose of goods.

A version of this article appeared in our Food industry law bulletin May 2005. To view this publication, please click here to open a new window.