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finsbury in insurance spat over dioxin recall costs
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finsbury food group has become embroiled in a spat with insurers over who will cover the cost of recalling products caught up in the egg dioxin scare. duffy: insurance spat the baker, which posted a 6% rise in sales in the six months to jan 1, recently received a batch of liquid egg containing a small percentage of eggs from a farm in germany that were potentially affected by the dioxin contaminated feed incident. the egg was used by finsbury’s memory lane cakes facility to produce short shelf-life cakes, which were deemed safe to eat but were nevertheless removed from supermarkets as a precautionary measure. on january 7, finsbury said it did not believe there would be any significant or lasting impact on the company given the limited volume of products involved and the fact that recall costs were covered by insurance. however, chief executive john duffy (pictured) today revealed that finsbury's insurer was challenging recovery of the associated costs. “the fact that there was no public health risk has led our insurer to challenge recovery of any associated withdrawal costs. we are currently in discussions with the insurer, retailers and the egg supplier to resolve the issue.” cautionary tale? kevin smith, food and drink practice leader at insurance broker jardine lloyd thompson (jlt), said he could not comment on finsbury’s particular circumstances, as finsbury was not a business that jlt curently advises, but said that such disputes were not unusual. “this is an area of insurance that is often misunderstood, and as with everything insurance-wise, it is critical that firms read the small print.” he added: “standard product liability policies only apply where there is injury or damage, and if no one is injured or damaged, it doesn’t trigger the policy.” he added: "even where a company has purchased an additional product recall policy, standard wordings always exclude carcinogens such as dioxins, and require the cause of the recall to result in death, illness or disease manifesting within a year of consumption. "with many food recalls the trace levels of contamination involved would not trigger such a policy. specialist advice is required in structuring a product risk insurance programme to respond to potential liabilities and also to recover your own retained financial losses arising out of food recalls and customer withdrawal claims." strong growth in gluten-free strong sales in its bread and free-from division (up 14.5%) accounted for the majority of finsbury’s growth, with good performances from the genius brand in fresh gluten free and the vogel’s brand in speciality bread. sales in the larger cake division were up 3.2% compared with the first half of last year, added the firm. “uk market and export sales have both shown growth although the former has required increased promotional support levels to remain competitive and deliver growth in the current marketplace.” meanwhile, the combination of soaring input costs and fragile consumer confidence made for a very challenging operating environment, it added.
Source :foodanddrinkeurope.com
Date :
21
January
2011
Category :
food industries Economic
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growing scrutiny of food suppliers means an increasing focus on food safety issues. in this special edition article on risk, we look at how producers can communicate potential risks to consumers while protecting their brand reputation, in the event of contamination or recall issues. shouting (food safety issues) from the rooftops is important, but remember that consumers will notice inaccurate or mixed messages tony hines, head of food security and crisis management manager, leatherhead food research, told foodmanufacture.
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around 3,000 german farms closed as a result of the liquid egg contamination scare have now re-opened. the contamination, which emerged last week, was a result of poultry feed containing toxic dioxins being sent to over 1,000 poultry and pig farms in germany. the dioxin was discovered in late december and resulted in german authorities stopping around 4,700 farms in the country from selling their meat and eggs, although produce did reach as far as the netherlands and the uk.
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with the ushering in of new hygiene laws at the start of this year, food companies are now under tougher regulatory scrutiny to ensure they do not send out poisonous products from their plants. laws on food hygiene, a regulation on microbiological criteria for foodstuffs, a regulation on official feed and food controls, and another on feed hygiene make up a complementary package of rules to tighten and harmonise the eu's safety measures.
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speculation mounted this week over who will be the winning bidder for uk frozen food retailer iceland foods, meanwhile, m&s revealed plans to revamp their stores and we interviewed the head of mccormick\'s subsidiary schwarz uk. here\'s the best of what was said this week: \"like buses, opportunities rarely come at the ideal time. asda probably has greater need than morrisons to acquire smaller stores with its relative dearth of such outlets and corresponding dependence upon 40,000 sq ft units and above.
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you may have noticed that consumer behaviour is changing significantly. people are not only demanding better quality food, they are also seeking more information about how their food is produced. the welfare of the animals that give us our food is becoming a key influencer in consumer purchasing decisions. in fact, market research shows around half of grocery buyers would prefer to purchase a humanely farmed product, over a conventionally farmed product.
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the race is on to find bisphenol a (bpa) alternatives in can linings but a substitute is unlikely be brought to market immediately - whatever laws are passed, the north american metal packaging alliance (nampa) said yesterday. john m. rost, chairman of the influential us trade association, reiterated that its members were leading the chase to discover bpa replacements in metal containers despite being entirely convinced the chemical poses no health hazard at current exposure levels from food packaging.
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the complacency being exhibited by brussels over the ongoing dioxin contamination incident is every bit as concerning as the carcinogenic chemical that has found its way into the food and feed chains since the end of last year. crisis, what crisis? apparently there is none - if you believe the line being spun by the european commission , and in particular the health and consumer protection commissioner john dalli, over the dioxin scare gripping the economic bloc.
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in the wake of a spate of high-profile foodborne illness outbreaks, the food safety modernization act passed the house on tuesday and is heading to the president, who has said he will pass the bill into law. passing with a vote of 215-144, the bill faced a large number of obstacles along the way, including a filibuster attempt, a technical glitch, and strong debate over certain amendments, despite enjoying widespread bipartisan support from industry, consumer, and health organizations.
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