Traffic light risk rating for food suppliers

By Chris Mercer

- Last updated on GMT

Related tags Private label

Suppliers of private label food and drink to multiple retailers may
be given 'traffic light' ratings to show their attention to food
safety and risk management, under a new project, can reveal.

At least one major supermarket in the UK is understood to be considering the scheme, which has been developed by insurance group Marsh. Supermarkets abroad have also shown an interest.

Whilst ratings would not be made public, the plans would likely put extra pressure on private label suppliers to improve their risk management practices - or potentially lose business.

A red rating may denote non-compliance with EU regulations or perhaps the lack of an adequate recall plan, while green would indicate a more acceptable risk, under plans currently being developed.

Discounts could be offered to suppliers who work to improve their rating, or fines imposed on suppliers for recalls could be lower for those on amber and green, it has been suggested.

If the scheme is taken up by retailers, a firm's risk rating may also affect the price of its insurance policy.

"For supermarkets, it is a matter of retention of brand loyalty and reputation,"​ said Jeremy Moore, a leading risk assessment specialist and leader of the project.

"For suppliers, it gives them an opportunity to improve on their risk management."

The food and drink industry was again plagued by several recalls last year, including over benzene in soft drinks and salmonella contamination of Cadbury Schweppes chocolate bars.

Cutting down on recalls could improve the image of the food industry among consumers.

Marsh's risk rating tool would only apply to private label, but Moore said this could make a big difference in a market where half the food products available are own-brand.

"Retailers are extremely powerful in the UK. All retailers have a way of contacting every one of their suppliers."​ Once information had been gathered from suppliers, Marsh would set about analysing risk.

Food firms have repeatedly emphasised the majority of recalls are conducted swiftly and efficiently to minimise risk to consumers.

But critics believe a certain amount of complacency remains. "You can often divide suppliers up into those who have gone through a recall and those who haven't,"​ said Moore.

Only 10-12 per cent of companies in the UK food and drink sector have specific 'contaminated product insurance', he estimated, warning that liability policy would generally only cover the basic costs of a recall.

Related topics Market Trends

Related news

Show more

Follow us


View more