More UK product recalls: why?

The number of products recalled in the UK because of faults or health risks reached a new high of 229 product recalls in the 12 months to November 2010. Recalls are made after a health and safety risk or a major design or production flaw has been discovered in a product.

This is clearly bad news for customers, but what does it tell us about the production processes behind the recalled products?

According to the most recent report, quoted by the BBC, it may simply be down to the greater financial pressures of 2009, when businesses might have chosen not to recall a product when the likelihood of a health and safety issue was negligible. Firms might just be more cautious this year.

The highest-profile recalls in recent times have featured cars, prompting recalls because of a fear that the discovery of a fault could put reputations at risk. The biggest example is probably Toyota.

“Companies have taken notice of the criticisms levelled at ... Toyota last year for allegedly delaying recalls and potentially putting their customers at risk. Following that kind of negative publicity, other(s) are very wary of putting their reputation in jeopardy by delaying a recall,” said one of the reports authors.

Toys and other products for children, such as a Fisher-Price recall in September last year, also tend to have a high profile. They also tend to have tighter safety controls. Many of these toys have been made in China.

China was at the epicentre of a huge wave of recalls in 2007. Tainted pet food, toxic toothpaste, toys and seafood, as well as hundreds of thousands of faulty tyres, have all caused big safety scares. The defective goods that have long been a problem for Chinese consumers are now beginning to spread to the outside world. In 2004 unsafe baby formula killed dozens of infants. Chinese media have reported half a dozen dead and many ill from a flawed antibiotic, 11 dead from tainted injections, 56 people ill as a result of contaminated meat, toxic snacks pulled off shelves and fake blood protein discovered in hospitals.

In June 2007 alone, dangerous faults or poisons prompted the recall of 68,000 folding chairs, 2,300 toy barbecue grills, 1.2m space heaters, 5,300 earrings, 1.5m “Thomas the Tank Engine” toy trains and 19,000 children’s necklaces (see The Economist for more details).

But this blog isn’t intended to be anti – Chinese in any respect. China’s experience (albeit on a colossal scale) is virtually identical to the quality control/ assurance problems that have dogged every economy as it has developed. “Made in Japan” and “Made in Korea” were once bywords for poor quality. Post-war Japan was also an environmental disaster.

Many manufacturers are aware of what a slur the phrase “Made in China” has become, and are taking precautions to preserve their reputations. Small suppliers and subcontractors have been responsible for many of the worst disasters. So Coca-Cola has banned its subcontractors from subcontracting again, to ensure strict quality control. McDonald’s, aware that one bad hamburger could destroy its reputation, has gone even further, setting up a whole supply chain within China with more than 40 facilities producing beef, chicken, lettuce, cucumbers, rolls and even special sauce.

US inspectors have recently been travelling to factories in Beijing, Shanghai and big manufacturing regions to help out. A lesson may lie in the approach taken by the fireworks industry, which has focused on education and stringent product testing within China. In the late 1980s and early 1990s, standards for Chinese-made fireworks were so low that as many as 75% failed US safety tests. To tackle the problem, US importers were encouraged to pay for a testing operation set up in China - to monitor production straight from the assembly line. Standards rose sharply. Manufacturers increasingly understand that safer, better quality fireworks translates into bigger sales, repeat orders and fatter profits.

However, “Despite China’s continued efforts to improve safety standards, the huge proportion of recalls deriving from Chinese products shows that the problem with standards in China has not gone away,” said the report.

In a separate development, the US Consumer Product Safety Commission (CPSC) has announced that it has opened its first overseas office in Beijing, China. The watchdog hopes that the office will also help to reduce the number of unsafe products reaching the US market.