Ikea’s Product Recall Sparks Wave of Complaints

Muesli manufacturerd by an overseas company selling in IKEA stores is at the center of a major scandal. In China, food retailers shoulder the responsibility for product quality and safety irrespective of whether safety and quality issues are attributable to upstream manufacturers or processors. In this case, although an entrusted importer handled importation of the cereal for Ikea, Ikea is still fully responsible for the safety of the food. Although up until now, there are no reports showing this non-compliant cereal damaged consumers’ health, we suppose consumers can still make a claim for compensation to a value of ten times the value of the product.

As revealed by an Ikea notice ^[1] released on May 11, 2020, consumers who bought its Muesli mixed fruit dry cereal after March 2019 can get a full refund in any offline Ikea store. The product recall started on May 8, 2020, and will last for a month.

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Excessive mold content

According to Ikea’s notice, the product recall was implemented based on a test report issued by Shenzhen Market Supervision Authority on April 30, 2020, which indicated an excessive mold content in one batch of the cereal. “This product, Muesli mixed fruit dry cereal, is not manufactured by Ikea or Ikea’s contract manufacturer in China but imported by one entrusted importer. And the reason for excessive mold content lies in the moisture residue in the dried fruit during the production process”, the spokesman explained^[2].

Will excessive mold content negatively impact human health? The spokesman of Ikea China told Beijing Business Today^[3] that “the excessive mold content poses quite a low risk and won’t negatively impact human health, Ikea will be responsible for any damage caused by this cereal product. Consumers who feel uncomfortable after taking the cereal shall go to the doctor immediately and contact our customer service”, a staff in Ikea Nanjing emphasized, “This cereal is an imported product. We are only the seller”.

*Note:

Generally speaking, mold pollution may lead to food spoilage and may also result in the production of harmful toxins, which can result in immune suppression, an endocrine disorder, etc. But the specific hazard shall be determined by the species of the mold and consumers’ intake amount.

Shall the Platform/Seller Bear Compensation Liability and Will Ikea Face Administrative Penalties?

According to the Ikea spokesperson, Ikea immediately stopped the sales of this product after receiving the non-compliant report on April 30, 2020, and they haven’t received any report on health damage. Article 148 of Food Safety Law (Amended in 2018), provides the basis for compensation.

Article 148 of the Food Safety Law

Any consumer that is damaged by food that does not comply with food safety standards may claim compensation against either the distributor or producer. Any producer or distributor that receives claims for compensation from consumers shall be liable for compensation first and may not refuse to compensate. If it is attributable to the producer, the distributor may recover such compensation from the producer; if attributable to the distributor, the producer may recover such compensation from the distributor.

In the event that any manufacturer produces food that does not conform to food safety standards or distributes food while being aware of its nonconformity with food safety standards, the customer can demand the producer or distributor to pay a penalty of 10 times the paid amount or three times of the loss, in addition to the compensation for the loss thereof. If the additional compensation is less than RMB 1,000, such additional compensation shall be increased to RMB 1,000; unless the defects are contained in labels and instructions of food that will neither affect food safety nor mislead consumers.

Although the cereal hasn’t been associated with any negative health outcomes, it is a fact that the product violated food safety standards and the Food Safety Law in China. According to the interpretation of the Food Safety Law ^[4] released in a China Court Paper, consumers have the right to make a compensation claim to Ikea for ten times the value of the product, regardless of whether they have suffered from the non-compliant food or not. Ikea may recover such compensation from the manufacturer.

As for administrative penalties, as long as Ikea has performed its obligations in respect of inspecting purchased food under the Food Safety Law, and it was not aware that the purchased food had a quality or safety issue, it will not face further punishment. Usually, in China, a product recall notice will mean consumers are given both a full refund and compensation.