Recent statistics from the United States Small Business Association show nearly 90 per cent of businesses fail within two years of experiencing a disaster.
According to risk and insurance experts David Goodall and Peter McGee, companies in the food and beverage industry that have adopted a ‘do nothing’ strategy, only to find out when being assessed by manufacturers.
“With a turnover in excess of $111.2 billion annually, food and beverage is one of Australia’s most important industries and we have a global reputation for our quality and consistency, but how prepared are we to navigate the multitude and changing risks that participants in this industry face on a day to day basis?” Goodall said.
“But while salads wrapped in plastic, warm sushi riddled with salmonella, all make us gag,
that’s just the tip of the iceberg. It’s the ripple effect that can also create damage throughout the
entire supply chain. Our message is, no matter how large or small your business, know all your
risks, plan for them so you can rethink your insurance and ensure all bases are covered.”
The discovery of horsemeat in processed beef products sold by a number of UK
supermarket chains in 2013 resulted in a series of product recalls and threw a spotlight on
the food industries supply chain in UK and throughout Europe.
As much as 100% of beef products were found to contain horsemeat; other beef products
were found to contain pork. The scandal revealed a major breakdown in the traceability of
ingredients in the food supply chain and exposed additional potential risks.
When you consider the supply chain for Comigel, one of the food manufactures at the
centre of the scandal, it’s easy to see why the wheels fell off. Romanian abattoirs
supplying Dutch and Cypriot meat traders, who send product to various parts of France.
Since the story broke in January 2013, it has spread to 13 other European countries and
authorities are seeking an EU-wide solution.
This issue not only ha an impact on consumer confidence, there is a significant financial
fallout for the companies involved.