Thursday, August 7, 2014

The Cost of a Recall

According to a report published by the Grocery Manufacturers Association entitled, Capturing Recall Costs: Measuring and Recovering the Losses:
In August 2010, more than 500 million shell eggs distributed by an egg producer had to be recalled. According to the Center for Disease Control (CDC), from May 1 to October 15, 2010, approximately 2,500 illnesses associated with the eggs were reported, making it the largest recorded Salmonella Enteritis outbreak reported since the FDA’s outbreak surveillance began in the early 1970s. Total costs to American shell-egg producers have yet to be calculated. However, the negative media attention produced a drop in prices that cost the shell-egg industry over $100 million in September 2010 alone.
In 2007, the estimated cost of the peanut butter recall to one company due to Salmonella contamination was $78 million.5 The estimated cost to American peanut-containing product producers from the 2009 incident contamination of peanut butter by Salmonella was $1 billion.
How much will the peach recall cost? It's already old news. Not much has been said about it in the last month so we will likely never know how much the recall will cost Wawona, its suppliers, myriad retailers, and all their insurers. The CDC still does not list the peach recall as a listeria outbreak.

Anyway, it'll cost a bushel.

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