Professor Sarah Thompson
26 September 2016
The topic that which I’m going to write about is food recalls, their overall personal affects on the consumer, and their economic impacts on both the consumer and producer. I would like to research whom usually fares better when all is said and done after these recalls, the consumer or producer?
The basic facts pertaining to the financial affects of these recalls are a bit surprising. By way of analyzing the stock market’s reaction in the wake of a food recall, it can be concluded that these recalls have little effect on firms that are involved (Salin, Hooker 2001). Negative repercussions after these recalls appear to be short lived in the stock market (Salin, Hooker 2001). These repercussions come in the form of somewhat negatively affected returns to shareholders involved with these companies (Salin, Hooker 2001). Again, these repercussions aren’t very strong when it comes to companies losing out financially (Salin, Hooker 2001). Even though food recalls don’t affect the finances of the companies involved too badly, damage to reputation is a different story.
Consumers are not only affected financially by these recalls, but are also affected mentally. The overall consumer trust in a brand can be shattered by a recall. Many of these individuals are affected by food recalls involving bacteria or some form of contamination that makes them sick. However, there are many cases of food recalls involving allergens that don’t get publicized in the media nearly as much. These types of recalls are extremely hazardous to those dealing with food allergies. Individuals with potentially dangerous food allergies rely completely on commercial manufacturers to let them know what allergens are present in their products (Vierk, Falci, Wolyniak, Klontz, 2002 1022-26). It is one of the most serious types of food recall because once an allergen is ingested by an afflicted consumer, it’s an immediate hospital visit.
The list of personal and financial affects on this particular type of consumer can be lengthy. High priced emergency bills; new epinephrine pens and a somewhat traumatic rush to the hospital are just a few affects on a consumer when contaminated food contains potential allergens not listed on the ingredients label. These allergens could be found in most any food including ones that you might expect such as peanuts in ginger snap cookies (Vierk, Falci, Wolyniak, Klontz 2002 1022-26). Other foods you might not expect can also contain small amounts of these allergens such as simple soup flavoring that contains peanuts (Vierk, Falci, Woyniak, Klontz 2002 1022-26).
Again, a consumer’s trust in a brand can be ruined when they endure sickness or have an allergic reaction due to a contaminated product. Most individuals feel that there is some sort of negative connotation attached to food recalls. While this is certainly true, food recalls are a necessary and positive aspect of our societal dietary needs. If executed thoroughly and quickly, food recalls play a major role in reducing and preventing incidents involving contaminated food. These recalls are actually a positive aspect of the food industry because they are what lessen the negative affects of contamination among consumers and food companies. Even though food recalls affect consumers and producers negatively, they exemplify the enormous progress that our society has made in food preparation by protecting so many more from the consequences of accidental contamination.
- Onyango, Benjamin, Dragan Miljokovic, William Hallman, William Nganje, Sarah Condry, and Cara Cuite. FOOD RECALLS AND FOOD SAFETY PERCEPTIONS: THE SEPTEMBER 2006 SPINACH RECALL CASE. Rep. no. 602. Department of Agribusiness and Applied Economics, North Dakota State University. N.p.: n.p., n.d. 1-19. Web. May 2007.
- Salin, Victoria, and Neal H. Hooker. “Stock Market Reaction to Food Recalls.”Review of Agricultural Economics Rev Agricultural Economics1 (2001): 33-46. Web.
- Vierk, Katherine, Kenneth Falci, Cecilia Wolyniak, and Karl C. Klontz. “Recalls of Foods Containing Undeclared Allergens Reported to the US Food and Drug Administration, Fiscal Year 1999.” Journal of Allergy and Clinical Immunology6 (2002): 1022-026. Web