The transformation of Maggi — from being staple food for students and bachelors to being declared unfit for consumption — has been quite instant. The ‘Taste bhi, health bhi’ noodles were banned across states after samples of it were found to contain excess amounts of lead and MSG — a flavour enhancer. But, even as Nestle India continued to deny these charges, the Food Safety and Standards Authority of India ordered the company to recall Maggi from the market.
What is it?
Product recalls can be voluntary or insisted upon by regulators. When a company discovers that a product already sold by it is defective or harmful, it makes a product recall. It asks its customers to return the defective product for replacement or compensation. But manufacturers may not always be honest enough to voluntarily recall a product, which is why countries have laws governing product recalls.
India has laws governing food product recalls but not other consumer products. According to the Food Safety and Standards Act, 2006, if a manufacturer discovers that the food items sold by him are unsafe, he must immediately withdraw them from the market. He must also inform the State food regulator. Those found guilty can also be fined.
In the US, the US FDA (Food and Drug Administration) overseas product recalls. If the FDA’s inspections reveal that a company’s products do not meet the expected quality standards, these have to be recalled. Indian pharmaceutical companies, for instance, have had to recall from the US market medicines not meeting certain quality and hygiene standards. But it is not just food companies that make product recalls, auto companies have, in fact, been recalling defective vehicles one after the other. Recently, Toyota made a global recall of its cars fitted with faulty airbags made by another car-parts maker.
When it comes to automobiles, India does not have a mandatory recall policy as do the developed countries such as the US and the UK. So, when Maruti announced a recall of its Alto cars this year, it was a voluntary action. But this is set to change once the Road Transport and Safety Bill, 2014, is passed, which, among other things, proposes a regulatory body that can order a recall.
Why is it important?
Consumer safety is not something to be taken lightly. A product recall ensures corrective action by a company and protects consumers.
For a company, a product recall brings negative publicity and could dent brand image. But failure to recall a product could land the company in even bigger trouble as happened with General Motors. The carmaker had to cough up $35 million in fine last year after it failed to inform authorities about a defective ignition switch and conduct a recall.
Why should I care?
If it wasn’t for product recalls, you would continue driving defective cars or sipping adulterated drinks as you always have, with no inkling of the risks you are exposed to. Also, recalls can create awareness about safety issues not just with one brand but with an entire category, as is the case with packaged food after the Maggi debacle. Product recall laws ensure that companies, particularly those with dominant market shares, don’t take consumers for granted.
The bottomline
A company may not, as the adage goes, eat its own dog food. But if there’s a problem, the least it can do is recall it.
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