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Recall Remuneration

Jim Prevor’s Perishable Pundit, September 26, 2006

Because the FDA hadn’t imposed a mandatory recall, many insurance policies haven’t been triggered. We spoke about that here.

However, some shrewd lawyers should be able to make a case that the FDA imposed a “constructive recall”, so the Pundit advises those who have insurance to talk to their lawyers about this issue.

But insurance or not, someone has to pay for all that product in the system that got thrown out. Those who recalled product have to take it back and refund the money.

But what about those packers, such as Fresh Express, that did not do a recall? On the same “constructive recall” theory that people will use with their insurers, many a retailer and distributor will be politely requesting reimbursement from their suppliers.

So far, many suppliers who did not recall their products are politely declining to provide reimbursement.

Things won’t stay polite very long.

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