American International Group AIG has launched NOVI, a web-based service aimed at helping companies estimate the cost of recall incidents.
Nicky Alexandru, vice president for crisis management, AIG said the tool will help food and beverage manufacturers understand their exposure to a recall event and make more informed decisions about how to manage their risk.
“While most companies are generally aware of the frequency of product recalls, they are unsure of the potential magnitude of the cost of a recall event,” Alexandru said.
The service estimates a company’s maximum recall loss in the case of an accidental contamination based on over 80 data points, as well as input from food safety consultant NSP International.
Claire Richards, crisis management manager, AIG, said there are two to three product recalls in Australia’s food and beverage industry on average each month.
“Maintaining food safety standards and managing recall risk are two pressing issues for Australian companies and, through NOVI, we can now assist companies in quantifying a potential threat to their business so that they can manage their risk more effectively,” Richards said.
“Expenses from a product contamination recall event can mount quickly. These can include replacement and destruction costs, lost profit from plant shutdowns, government intervention, loss of profits and brand and reputational damage.”