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Pan Pharmaceuticals Ltd Product Recall
Guideline for Retailers
The Pan Products recall is unprecedented in New Zealand and Australia. The position is changing rapidly and further products may be recalled as more information becomes available. The following notes were prepared following advice from our solicitors and discussion with the Ministry of Consumer Affairs and the Consumers Institute.
The notice issued by the Minister for Food Safety: directs all sellers, distributors and importers of products listed (in the recall notice) manufactured by Pan Pharmaceuticals Ltd of Australia to immediately stop the sale and distribution of those products and to retain those products in safe custody until further notice."
Further information about the recall generally, about a particular product, or on technical issues including the rules for disposal of returned product is available from the NZ Food Safety Authority Helpline on 0800 693 721 or their website at www.nzfsa.govt.nz.
This guideline is prepared in good faith and based on the information available at this time. It is intended as general advice to members of the NZ Retailers Association and is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to particular issues that arise.
Responsibility to Consumers
Where goods are recalled because they fail to meet the appropriate food safety requirements, consumers would reasonably expect to have those goods refunded, particularly in the light of the statement from the Ministry of Consumer Affairs that the Consumer Guarantees Act will apply.
It is not yet clear to what extent the full range of goods in the recall list are of unacceptable quality, however the fact that the recall notice has been issued means that for all practical purposes a refund will be expected by the consumer for any product listed.
Where a customer returns to the retailer goods of unacceptable quality because they are unsafe, they would normally be entitled to the remedies provided in the Act - ie, to reject the goods and choose to either have their money refunded or to accept a replacement of similar value.
In such circumstances, the retailer is entitled to have regard to the following points:
It is reasonable to offer an alternative product as a replacement. But note that the choice to accept that alternative or receive a refund remains with the customer.
There is no obligation to refund products that are past their expiry date;
They are not responsible where the customer no longer has the product;
They are entitled to seek reasonable proof of purchase - If the original sales receipt is not available, other identifiers such as a store price label may be acceptable.
The Consumer Guarantees Act is silent on the retailer's responsibility for partly consumed products. We recommend that retailers take a realistic approach and give a full refund where possible. If not, a proportionate refund having regard to the amount of product used is acceptable. (Note - the option of a proportionate refund is specifically provided for where products are recalled under the Fair Trading Act but the Food Act under which this recall is made has no similar provision)
Supplier Responsibility
The retailer may have redress from the supplier under the Sale of Goods Act 1908, however that Act is limited in scope and difficult to enforce. Suppliers can contract out of the Act. In that case the only enforceable terms are those in the supply agreement. Remember that failure to be reimbursed by a supplier is not grounds for withholding a refund from a customer.
Any Association member who wishes to discuss these guidelines is welcome to call the Helpline on 0800 472 472 for further information. Where circumstances warrant it, they may prefer to seek legal advice.
Cliff Daly
For Chief Executive
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