Aldi’s Unknown Substance

This week the Telegraph reported that a bottle of tomato juice bought from Aldi’s Bristol branch had been found to contain a mysterious substance which it believes to be mould.

Who is responsible to the consumer? Who is ultimately responsible? How do you investigate such an issue?

The consumer’s claim is against the party that sold the product to him/her. So here, that would be Aldi. Aldi erred in offering only a £10 voucher to be redeemed on purchases in one of its stores. The outcome was that the consumer went to the press, causing a PR issue for the company. They may yet receive a civil claim from the customer for damages, they may also be prosecuted by the Local Authority and the Food Standards Agency for offences under the Food Safety Act 1990. Aldi will have good contracts with its suppliers that will see that it is indemnified if the issue arose further up the supply chain, rather than in the store.

Prevention is better than cure: It is important that supply agreements contain robust procedures for recalling products and providing indemnification to the purchaser of the product. Incorporating codes of conduct expected of suppliers is invaluable as it helps the receiving business in coordinating efforts to contain a problem if the expectations of suppliers are uniform across all lines.

Don’t go it alone: It goes without saying that any indemnification needs to be backed up by insurance in which the receiving business is named as an interested party and the policy must cover the receiving businesses losses, including legal costs and any damages it has to pay out.

Do Due Diligence: All businesses should vet their suppliers, requiring production of annual accounts, up to date insurance cover and all current versions of the supply agreement entered into and recorded electronically. The better the system, the lower the risk to the business when things go wrong.