Product Recalls: Keeping on the right side of the ACCC

Stephen Booth, Peter Stewart

The Competition and Consumer Act requires recall of consumer goods which in themselves, or because of a reasonably foreseeable use or misuse of the goods, will or may cause injury to a person. A recall can be initiated by the ACCC itself, or as a voluntary recall by a manufacturer or supplier, in which case it is obligatory to inform the ACCC within 2 days of initiating the recall, and the ACCC will monitor the recall, and post it on its www.recalls.gov.au website. 

Since dealing with the ACCC is an integral part of managing a recall, it is advisable to keep the relationship with the ACCC as positive as possible in the circumstances. The ACCC and its staff have a job to do, and making it harder for them to do that job is likely to make it harder to co-operate with the ACCC to manage the recall. In our experience (on recalls ranging from children’s furniture to malfunctioning awning supports to pig food), the ACCC and other specialist regulators are generally very helpful and willing to work with businesses who need to recall a product, provided that the identified safety issue is being addressed positively and comprehensively. Being open and proactive, supplying information promptly when requested, and acknowledging valid concerns are all likely to help. Working positively with the ACCC generates goodwill which markedly assists in managing the recall. 

As an example of what can happen when things don’t work well, consider this recent example: 

The recall would have been a serious business issue in any event, but engaging positively and co-operatively with the process from the start, and focussing on it to manage it as best as was possible, would have had less drastic consequences.

The moral of this story: no-one wants to have to recall a product, but doing so by engaging constructively and co-operatively with the ACCC or other regulator is likely to have better long-run results, and reduce brand damage. 

If you require any advice or representation in relation to a product recall, please contact:

Stephen Booth, Principal
Phone: +61 2 9895 9222
Email: sbooth@colemangreig.com.au 

or 

Peter Stewart, Principal
Phone: +61 2 9895 9258
Email: pstewart@colemangreig.com.au