Product recalls are surging in early 2023

Photo (c) Daniel Grizelj - Getty Images

The first quarter saw recalls at four-year high

In something of a dubious distinction, the number of product recalls from January through March in the U.S. hit the highest single-quarter total in four years.

According to Sedgwick brand protection, recalls in five key industries shot up 14.2% during the first three months of 2023 from the fourth quarter of 2022.

With three-quarters of the year yet to be reported and regulatory and consumer scrutiny continuing to increase, there is still the possibility of a third consecutive year with over 1 billion recalled units.

“As the number of recall events increase across industries, the risks to manufacturers grow more serious, with increased regulatory enforcement and a more publicized recall process,” said Chris Harvey, Sedgwick senior vice president of brand protection. “Regulators are working to prioritize product safety while balancing innovation with oversight — meaning manufacturers can expect to contend with new rules and regulations. Businesses will need to remain agile to keep pace with these changes and prepare for future ones.”

Product recall breakdown

Automotive recalls were up 3.4% with electrical systems the leading cause, followed by equipment and airbags.

The consumer product industry recorded the most recalls in a single quarter since the third quarter of 2015, soaring 442.1. Only one quarter in the last five years saw more units recalled.

While FDA recalls were up 23.2% from the previous quarter, the number of units affected fell by 78.7%. In contrast, the number of USDA recalls held steady for the second consecutive quarter, even as the number of pounds of product recalled increased by 1,129%.

The number of medical device recalls increased 4.6% with manufacturing defects accounting for the greatest proportion of these. Quality concerns were the leading cause in terms of units affected at 82.3% of all recalled devices.

The first three months of 2023 marked the most pharmaceutical recalls in a single quarter in the past 18 years, increasing a whopping 1,071.8% after an unusually low number of units were recalled in Q4 2022.

What lies ahead

Assuming technology advancements and increased adoption of electric vehicles (EVs), regulators will likely move quickly to ensure that vehicles equipped with the latest features are safe for the road. Manufacturers should be prepared for a slew of new regulations and guidance as regulators work to ensure vehicle safety.

Strict regulatory enforcement of consumer products is likely to continue from both the Consumer Product Safety Commission (CPSC) and the Federal Trade Commission (FTC). The CPSC will likely continue its more public efforts to pursue remedies from manufacturers and its practice of issuing civil penalties. Manufacturers would be wise to update their recall and communications plans to align with CPSC’s new, more aggressive enforcement strategy.

Look for the FDA to issue final guidance on a variety of issues, including allergens, dietary supplements, food additives, topics related to the Food Safety Modernization Act (FSMA), and labeling. The infant formula industry is on notice by way of a constituent update and a letter to stakeholders to improve their processes and implement the programs that were outlined.

For the medical device industry, the FDA is focused on improving the supply chain and preventing shortages with a higher allocation for related programs. The agency is also testing two pilot programs that implement digital solutions for new product submissions and enhance stakeholder communications.

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