'Any failure may impact brand reputation, you may not recover': Study finds food safety ‘not a high priority risk’
According to a review of the Risks and Uncertainties statements of food makers filed with Companies House in the UK, only one-sixth of companies included in the research, 17%, cited product safety as a risk factor.
Of 29 different risk factors highlighted throughout the reports, food safety “barely scraped” into the top ten, software provider QADEX, which conducted the investigation, concluded.
“What’s noticeable is that the top five risks, scoring between 25% and 61%, were all financial related. Competitor and customer behaviours also marked higher than product safety,” said QADEX managing director Stephen Whyte.
Food safety ‘seen as overhead to be reduced’
QADEX segmented the food and drink market into three tiers: those businesses with turnover in excess of £250m, those in the £100-£250m bracket, and those with turnover between £20-£100m.
The researcher’s analysis found a significant difference between the focus small and large companies place on food safety. Within the lower turnover group, only 10% of companies flagged food safety as a risk. This compares to almost one-fourth of larger companies.
“We surmise that the reason for more attention amongst larger firms is due to there being a greater focus on enterprise risk management and a need to publish annual corporate reports. Conversely, smaller firms are less in the spotlight,” Whyte told FoodNavigator.
Whyte did, however, note that the research did not suggest that larger companies produce safer food. “There is no evidence in the data we found to indicate that larger companies are more reliable than smaller companies,” he stressed.
Whyte added that the low priority assigned to food safety as a risk factor can sometimes be reflected in investment decisions. “The main implication we see is that food safety and technical costs are too often seen as overheads which can be reduced when costs need to be cut,” Whyte warned.
Board level engagement needed
Whyte believes that increased board level awareness of food safety as a crucial risk area for a food brand would deliver a “more rounded discussion” of the topic.
“Media and consumer interest in food safety is increasing the burden on over stretched technical teams while senior management do not see food safety as a priority risk in too many cases.”
The development of a more transparent standardised reporting procedure on food safety issues remains a “very tricky question”.
“Anything that is significant enough to necessitate a product recall is already reported by the FSA…. The size, scale and complexity of the food supply chain means that there are issues every day and a standardised format of annual report whilst desirable would be challenging to achieve. The nature of the food supply chain and how consumers engage with their food means that there will always be issues.
“In our experience all food businesses take a risk based approach to determine supplier approval and product testing plans, but many of these risk assessments are based on subjective opinions and are completed using incomplete data sets. This often results in limited auditing and testing resources not being optimally deployed.”
The survey’s publication comes in advance of the introduction of a new version of the British Retail Consortium (BRC) Global Standard for Food Safety in August this year. Audits against the updated standard will start from March 2019.
This standard, against which many supermarket-led food safety audits of their suppliers are conducted, will require much greater commitment from food businesses to improve their food safety cultures and management in the light of recent high profile scandals.
“For a food and drink business, the danger of supplying products that are not safe, legal and of a high quality standard should be a top priority in risk management planning. Any failure will directly impact brand reputation and once that is tarnished, you may not recover,” Whyte concluded.
Whyte now plans to publish the Qadex Food and Drink Safety Audit on an annual basis, in order to measure and track the sector’s performance over time.
Directors of Food Companies better start doing their job!
Posted by Steve Hather,