Hungary Ranks Second On EU Product Recall List

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The number of recalls of dangerous or faulty consumer goods in EU member states has increased sharply over the past 12 months, according to the latest European Commission figures. Of all member states, Hungary provided the second highest number of notifications.

Since the introduction of the General Product Safety Directive (GPSD) by the EU at the beginning of 2004, the weekly volume of product recalls reported to the EC has grown 175% from an average four per week in February 2004 to 11 per week in February 2005. The Directive was introduced to help protect consumers from unsafe products by increasing the reporting obligation and introducing mandatory recalls on companies in the supply chain.

Product recall insurance specialists at PricewaterhouseCoopers have analyzed the number of product recall notifications from each EU member state collated over the last year by the EC. PwC’s analysis reveals that in the period under review, Germany produced the highest number of notifications at 73, followed by Hungary at 46, Spain at 39, Lithuania at 27 and Finland at 24. In total, 373 products were reported as dangerous or faulty to the EC including tattoo ink, tights, rattles, garden sheds, popcorn machines, decongestion cream and a variety of toys.

According to PwC, the reported rise in recalls is likely to lead to an increased demand for product recall insurance cover, currently an underdeveloped market. Increased take-up from manufacturers will be driven mostly by the new regulatory environment, greater transparency and awareness of the risk and the harsh penalties for non-compliance. In the U.K. companies failing to withdraw unsafe products might soon face up to £20,000 in fines, or a prison term of 12 months, under terms currently being considered by the Department For Trade and Industry.