Health Law

2006 E. coli Tainted Spinach Changing Who Pays For Recalls

By Marler Clark LLP

We’ve been doing a lot of thinking about recalls lately. We know its not true, but by their combined actions, we sometimes cannot help but thinking the food industry and its regulators are in cahoots to drag out recalls and confuse the public.

When it became apparent that about one third of the 143 million pounds of beef recalled from the ill-fated Chino slaughterhouse was in the meat lockers of the nation’s public schools, we thought about local taxpayers getting stuck with the disposal costs.

It appears we were not alone in thinking about recall costs. David Mitchell, writing for www.ThePacker.com, says Wal-Mart has told its suppliers that they will, in the future, be charged by the giant discount chain for its costs to participate in a recall. The minimum charge would be $20 per store. Wal-Mart’s 2,500 stores would add up to a minimum charge of $50,000.

Mitchell writes that:

“It’s not a big surprise,” said one Wal-Mart supplier, who requested anonymity. “To be honest, other chains have things that are similar.”

The source said that retailers often have provisions in their supplier agreements that allow for such charges, but fees often go uncollected in the case of products recalled because of minor defects, such as labeling errors.

He said retailers do level assessments against suppliers in more damaging cases, such as the 2006 E. coli outbreak linked to spinach.

Go here for the rest of Mitchell's report.

Full post as published by e.Coli Blog on April 01, 2008 (boomark / email).