Pet food recalls can have significant financial impact

00:01:10 | June 17, 2015

When it comes to pet food safety, manufacturers can learn many lessons from the human food industry and its food safety recalls, according to David Primrose, technical consultant for Synergy Food Ingredients. During Petfood Forum Europe 2015, Primrose discussed how to protect your brand equity, your customers and our pets by ensuring safe pet food products and developing a food safety culture based on a field-to-bowl safety management approach.

One lesson shared was the financial impact of product recalls or food safety failures in the human food industry. The day after a recall is announced, Primrose said, the company’s share prices can decline 2%, then as much as 22%, on average, within two weeks after the announcement. Over the long term, the company can lose sales and see its operating profit drop and even, in the worst cases, go out of business.

Specific to pet food safety issues, Primrose cited data showing that a problem with excess vitamin D3 in pet food products resulted in a US$50 million class action lawsuit against Royal Canin. In 2012, Diamond Pet Foods paid US$1.9 million to settle a class action lawsuit stemming from Salmonella contamination of some of its pet foods. And, in 2013, Procter & Gamble was hit with a US$2 million class action lawsuit, a 1% drop in sales and a 0.5% decline in global market share in one quarter after a Salmonella-related pet food recall.

“Brand equity is a promise made to your customers,” Primrose stressed, which is a useful concept in relation to how a business considers its commitment to food safety.
Petfood Forum Europe 2015 took place June 10 in Cologne, Germany, in conjunction with Victam International. For more information, visit www.petfoodforumevents.com.

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