Britain's second major food scare since the start of the year has triggered a warning to manufacturers about the need for traceability in their supply chains.
The caution comes from lawyers in the Midland office of law firm Reed Smith and follows alerts over the ingredient Sudan 1 in February, and the more recent discovery of Para Red food dye in some packets and jars of Mexican food.
The recall has lessons for manufacturers across all sectors, including automotive and general engineering, said Darren Smith, a partner in the law firm's Coventry office.
Mr Smith, who specialises in product liability issues, said: "Sudan 1 was a classic supply chain problem which involved reputation management, insurance issues, and risk assessment and management.
"Food manufacturers buy their ingredients from many sources, and each agreement is a contractual relationship which carries a risk to the customer and supplier."
The biggest risk was to expensively nurtured brand images those of both the famous name food manufacturers and the 'own brand' supermarket alternatives that sit alongside them on the shelves.
But there is also a huge financial implication, said Mr Smith.
The Sudan 1 recall is reckoned to have cost the food industry around £100 million, resulting in insurance claims that will take some time to untangle assuming all parties in the chain were insured in the first place.
"Sudan 1 and Para Red clearly show how important it is to have the strictest quality procedures in place, alongside adequate insurance and clear traceability, which is now more important than ever before since we live in a global business world," said Mr Smith.
As the search for the guilty ingredient gets under way, the buck stops with the first firm that cannot show where it sourced its supplies, potentially landing them with the cost of the entire recall, he said.
Paul Taylor, an associate in the firm's corporate department, said: "Companies have to ask themselves whether they are insured not only for the product recall but also for the losses incurred in any ongoing disruption of the business, as well as sourcing supplies from different quarters."
The same principle applies to all manufacturing processes - from automotive and aerospace to X- ray equipment.
Mr Taylor added: "Contracts should provide that a paper trail is created so the parties can see where components have been sourced, and where they are going.
"It can be a drag, but it is important, and the principle is quite straightforward.
"The aim is for firms to be aware of the risks, and be pro-active rather than reactive."
