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Food Safety

Food Safety

Abstract

On 4th Jan 2011, President Barack Obama signed into law the Food Safety Modernization Act (H.R. 2751).The law authorizes the Food and Drug Administration (FDA) to take on a more proactive active interest in Food Safety and the Secretary of Health and Human Services (HHS) to increase inspections of many domestic food facilities, enhance detection of food borne illness outbreaks, and order recalls of tainted food products. The law requires the FDA and food companies to write and implement new safety protocols to mitigate potential hazards. One of the key provisions is that imported food products face increased scrutiny under the law, including denial of entry into the United States under certain circumstances.

Excerpts from the Paper

The Government does not want contaminated food from reaching the consumer and neither do the food companies. Traceability of the food as it moves from the manufacturer’s supplier(s) to the end consumer is essential to ensure this. According to a study commissioned by GSI US, Grocery Marketing Association (GMA) and Food Marketing Institute (FMI) -currently manufacturers take 0.5 to 72 hours to complete the identification process, measured from the moment an issue is detected to the moment a recall decision is made. After the recall decision is made, records are searched, emails are sent, spreadsheets analyzed , file drawers emptied in order to identify where the contaminated food came from and where has it been sent after processing. While the bill does not necessarily require the brand owner/manufacturer to maintain records about its upstream and downstream partners, it is highly recommended that they do so as the brand value once eroded is difficult to regain.

Many food companies are investing significant money and effort to build awareness for their brands in the market, which can pay-off amply in competitive, commodity markets. One highly publicized recall and the negative image generated in the media, however, can turn an established brand asset into a liability. Nervous consumers can cause distributors and brokers to quickly abandon such tainted products in the channel. According to John Bryant – Chief Operating Officer and Financial Officer, Kellogg Corporation “In January 2009, we became aware that the Peanut Corporation of America had supplied us with tainted product. We initiated a recall which we expect to impact the company around $0.12 per share.”

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