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Product liability - contaminated food stuffs

Few things can ruin a food company's reputation faster than a foreign body complaint. KFC have long been dogged with the urban myth about a Kentucky…

There are few things which can ruin a food company's reputation faster than a foreign body complaint. For example KFC have long been dogged with the urban myth about Kentucky fried rat. So when KFC were fined almost £19,000 in May 2010 after a cockroach was found on a chip in the Leicester Square branch, their reputation fell further. Online response to the Daily Mail's report of this incident included comments such as "these places should be closed down" and "Why am I not shocked by this."

It is not just restaurants whose reputations can be affected by findings of foreign bodies. Supermarkets can also be plagued by reports of people finding items such as glass, maggots and cigarette butts in their food and with the consumer war cry of "I know my rights" a significant number of these claims result in litigation which is costly and time consuming for everyone involved.

So what are the consumers' rights? The Consumer Protection Act 1987 states that a product is defective when its safety is not what consumers are generally entitled to expect. The customer must prove the item is defective. However, if the customer's story appears genuine, a Court is likely to agree that customers do not expect to find foreign bodies in their food and will agree the product is defective. If so, the Act imposes liability for the defect on everyone who falls within the definition of a producer. This includes the actual producer of the product, anyone who puts their name to a product, such as supermarket own brands, or anyone who imports a product into an EU member state from a non member state. This definition can therefore include the manufacturer meaning the customer may have a direct claim against them. Where the retailer is not the producer, the retailer has a legal obligation under the Act to provide the producer's details to the customer. If the product is an own brand, the retailer will be deemed to be a producer and may deal directly with the customer to settle or defend the claim, but with more retailers requiring a contractual indemnity from manufacturers for repayment of all legal costs including any damages, the manufacturer often ends up as the paying party.

Alternatively, the customer could claim under the Sale of Goods Act 1979 which imposes a term in the contract for the sale of goods between a business and a customer that the goods will be of satisfactory quality and fit for purpose. If they are not, the customer can sue for breach of contract. This type of claim can only be brought against the retailer but with the strict terms of the supply agreements, the cost is often passed on to the manufacturer.

So how can manufacturers protect themselves from such claims? It is often difficult to ascertain at what stage the product was contaminated – did the foreign body come from the raw materials, from the factory where the product is made, at retail stage or even at the customer's home? An obvious starting point for the manufacturer is to ensuring the foreign body is unlikely to have come from them by carrying out regular, adequate tests and assessments of the products and product lines. However it is no good carrying out these tests without being able to prove it and so manufacturers should ensure they have up to date documentation on product testing, demonstrating compliance with product specifications and any relevant standards. Manufacturers should also ensure they have carried out due diligence in relation to their suppliers and have the documentation to prove it.

It is not enough to merely have this documentation. If a retailer advises of a claim, manufacturers should co-operate by providing all necessary documents to the retailer to show the manufacturer is not the source of the contamination. Witness statements from appropriate persons explaining the sourcing of suppliers, production and testing processes will also assist.

Cooperation in such matters not only improves manufacturer/retailer relationships, but can result in the successful defence of such claims, leaving both the manufacturer and retailer with their reputation intact.