Interview met oprichter RecallDesk in SGI Europe

New RecallDesk eases burden of product recalls in Europe

The expensive product recall at Peloton Interactive, which is expected to lead to extraordinary charges of $125 million for this fast-growing American home fitness equipment company, is sending out a strong signal that the sporting goods industry must be bet- ter prepared to face similar issues, partly because the technology behind the products is becoming more and more sophisticated.

RecallDesk, a new company based in the Netherlands, claims to be the first specialized service provider in Europe that can help suppliers and importers in the broader consumer goods sector to prevent or minimize similar losses through its legal, risk management or operational support.

According to the OECD, which has its own recall portal, the sporting goods industry, including the now booming bike segment, is the fifth-largest issuer of product recalls issues on a list led by the toy and automotive industries.

Rutger Oldenhuis, the 46-year-old lawyer who is running the new company, has gathered a lot of experience in this area as the head of Shimano Europe’s legal department for more than 16 years. He has also been a vice chairman of the legal committee of the World Federation of the Sporting Goods Industry (WFSGI).“Recalls always happen when it’s least expected,” says Oldenhuis, recommending prevention as the best possible methodology to avoid serious consequences. Besides taking product compliance seriously, he proposes that any consumer goods company should prepare in advance a “recall plan” that would include a detailed recall procedure in case it is required, with a checklist and a communication template, pointing out that even national importers must adhere to certain safety standards.

“A well-conducted recall may not harm your brand, but instead even increase your customers’ trust,” he adds. A recent survey conducted by the European Commission shows that 54.4 percent of consumers have raised their level of confidence in a brand or a retailer after learning about a product recall. In addition, 63.5 percent of them have started paying more attention to product recalls after such an experience.

Typically, a generalist law office takes care of product recalls, but its intervention may not have the best possible effects because of limited expertise in the area. As the Peloton case shows, a recall may hit a company’s P&L badly and yet not many companies seem to be aware of the possibilities to recover substantial recall costs. For example, in certain Euro- pean countries such as Germany and the Netherlands, they may be subject to recovery based on statutory insurance law. RecallDesk can advise on recovering recall costs and conduct an audit of a company to optimize its liability insurance. RecallDesk is building up a pan-European network of experts in this area.

RecallDesk can also jump in to advise a company on how to mitigate the effect of a product recall when it becomes inevitable or when it is hit by a consumer complaint on a safety issue, taking eventually the lead in managing the recall. In most instances, Oldenhuis says, a voluntary recall is better than a mandatory recall ordered by national consumer safety protection authorities, where the European Commission subsequently takes action on a wider scale. In Europe, voluntary recalls are generally done in nine out of ten cases, but they are not as widely publicized as in the U.S., where the Consumer Safety Protection Commission (CSPC) has a louder voice.

More information is available on www.recalldesk.com.