How much do food recalls cost?
Brittany Udulutch
There are so many hidden threats out there that nobody pays attention too. Threats that are dangerous and deadly enough to cause the country to go haywire. E. coli and Salmonella have the ability to kill living beings of all ages, health, and even species. Many people don’t think about what they are eating or drinking and what hazards could be in that delicious orange juice or that satisfying hot dog at the Brewer’s game. Those simple foods that most Americans love could be a deadly outbreak ready to happen, and there are more than you think. This graph shows the amount of recalls that occurred throughout the Fiscal-or government earning- year.
Although there are more recalls then you think, you usually don’t hear about how much it costs to recall infected or questionable products. On April 20th, 2014 there was a recall for over 96,000 pounds of Kraft Oscar Mayer Weiner’s, “because the products may contain Classic Cheese Dogs in the Classic Wieners’ packages”. There was an allergen problem with this recall since there was pasteurized cheese in packages of normal wieners. The labeling and ingredients did not indicate the pasteurized cheese. Although there were sicknesses or deaths, this large recall will be costing Kraft Food Group Inc. “around $385,000 in total cost of sales”. This is just in refunding customers and climbing back from their set back.
In this case, nobody was affected by the mistake, but in other recalls, many companies don’t get out that easily. According to the bernardlawgroup.com, “There have been 128,000 hospitalizations and 3,000 fatalities due to food borne illness each year. The average cost of a recall is $10 million and food poisoning costs $14 billion each year”. Although that average seems very high, that is an average and during the worst outbreak in recorded history, the Peanut Corporation of America, tops all. The PCA had a huge history of having food health issues, but “as of April 22, 2009, it involved at least 361 companies and 3,913 different products manufactured using PCA ingredients”. The PCA provided to mostly lower income families, but because of the outbreak, people started avoiding all peanut products. This incident brought down all peanut butter companies sales by 25%. Because of this decrease in sales, it brought farmers and industries into almost bankruptcies. 2008 was the start of dangerous economic turmoil to begin with. The economy was dropping drastically and prices on everything were going up. The first official case of illness was in a dog that had eaten some biscuits that had PCA’s peanut butter in it. Overall though, it brought 9 deaths and at least 714 sicknesses. The initial cost for this recall was supposed to be over $1 Billion- which includes refunding, law suits, etc- and since the company only made 25 million a year in profit, all their plants had to close down and PCA filed for chapter 7 bankruptcy.
Overall, food recalls affect more than just the health of people worldwide, it also affects the stock market value of the company or companies in questions, local farmers who sell their crops, and other companies if people decide to stay away from those products all together. This is a costly ordeal that affects the entire nation in one way or another.
Work Cited:
"About FDA." Total number of recall events in the month for which the classification
process was completed. N.p., n.d. Web. 29 Apr. 2014.
<http://www.accessdata.fda.gov/FDATrack/track?program=cder&id=CDER-OC-Total-Recalls-an
d-Recalls-by-Class>.
"Kraft Foods Expected to Lose $385K Following Recall of Wieners." Techyville. N.p., n.d.
Web. 29 Apr. 2014.
<http://www.techyville.com/2014/04/news/kraft-foods-expected-to-lose-385k-following-recallof-
wieners/>.
"Average Food Recall Costs $10 Million."Bernard Law Group. N.p., n.d. Web. 29 Apr.
2014. <http://www.bernardlawgroup.com/average-food-recall-costs-10-million/>.
"Peanut Corporation of America."Wikipedia. Wikimedia Foundation, 21 Apr. 2014. Web.
29 Apr. 2014. <http://en.wikipedia.org/wiki/Peanut_Corp
"HowStuffWorks "10 Costly Food Recalls"." HowStuffWorks. N.p., n.d. Web. 29 Apr. 2014.
<http://money.howstuffworks.com/10-food-recalls.htm#page=10>.
There are so many hidden threats out there that nobody pays attention too. Threats that are dangerous and deadly enough to cause the country to go haywire. E. coli and Salmonella have the ability to kill living beings of all ages, health, and even species. Many people don’t think about what they are eating or drinking and what hazards could be in that delicious orange juice or that satisfying hot dog at the Brewer’s game. Those simple foods that most Americans love could be a deadly outbreak ready to happen, and there are more than you think. This graph shows the amount of recalls that occurred throughout the Fiscal-or government earning- year.
Although there are more recalls then you think, you usually don’t hear about how much it costs to recall infected or questionable products. On April 20th, 2014 there was a recall for over 96,000 pounds of Kraft Oscar Mayer Weiner’s, “because the products may contain Classic Cheese Dogs in the Classic Wieners’ packages”. There was an allergen problem with this recall since there was pasteurized cheese in packages of normal wieners. The labeling and ingredients did not indicate the pasteurized cheese. Although there were sicknesses or deaths, this large recall will be costing Kraft Food Group Inc. “around $385,000 in total cost of sales”. This is just in refunding customers and climbing back from their set back.
In this case, nobody was affected by the mistake, but in other recalls, many companies don’t get out that easily. According to the bernardlawgroup.com, “There have been 128,000 hospitalizations and 3,000 fatalities due to food borne illness each year. The average cost of a recall is $10 million and food poisoning costs $14 billion each year”. Although that average seems very high, that is an average and during the worst outbreak in recorded history, the Peanut Corporation of America, tops all. The PCA had a huge history of having food health issues, but “as of April 22, 2009, it involved at least 361 companies and 3,913 different products manufactured using PCA ingredients”. The PCA provided to mostly lower income families, but because of the outbreak, people started avoiding all peanut products. This incident brought down all peanut butter companies sales by 25%. Because of this decrease in sales, it brought farmers and industries into almost bankruptcies. 2008 was the start of dangerous economic turmoil to begin with. The economy was dropping drastically and prices on everything were going up. The first official case of illness was in a dog that had eaten some biscuits that had PCA’s peanut butter in it. Overall though, it brought 9 deaths and at least 714 sicknesses. The initial cost for this recall was supposed to be over $1 Billion- which includes refunding, law suits, etc- and since the company only made 25 million a year in profit, all their plants had to close down and PCA filed for chapter 7 bankruptcy.
Overall, food recalls affect more than just the health of people worldwide, it also affects the stock market value of the company or companies in questions, local farmers who sell their crops, and other companies if people decide to stay away from those products all together. This is a costly ordeal that affects the entire nation in one way or another.
Work Cited:
"About FDA." Total number of recall events in the month for which the classification
process was completed. N.p., n.d. Web. 29 Apr. 2014.
<http://www.accessdata.fda.gov/FDATrack/track?program=cder&id=CDER-OC-Total-Recalls-an
d-Recalls-by-Class>.
"Kraft Foods Expected to Lose $385K Following Recall of Wieners." Techyville. N.p., n.d.
Web. 29 Apr. 2014.
<http://www.techyville.com/2014/04/news/kraft-foods-expected-to-lose-385k-following-recallof-
wieners/>.
"Average Food Recall Costs $10 Million."Bernard Law Group. N.p., n.d. Web. 29 Apr.
2014. <http://www.bernardlawgroup.com/average-food-recall-costs-10-million/>.
"Peanut Corporation of America."Wikipedia. Wikimedia Foundation, 21 Apr. 2014. Web.
29 Apr. 2014. <http://en.wikipedia.org/wiki/Peanut_Corp
"HowStuffWorks "10 Costly Food Recalls"." HowStuffWorks. N.p., n.d. Web. 29 Apr. 2014.
<http://money.howstuffworks.com/10-food-recalls.htm#page=10>.
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