Gut feelings

In NSW, restaurant kitchen indiscretions are plastered on a public website for all to see. In Victoria, council officers have the power to shut down hygienic premises. In Queensland, food suppliers that fall afoul of regulations can be fined more than $75,000.

These are just some of the risks faced by any business selling food to the public. And it is not just government regulators that can levy penalties on these businesses; customer trust is easily shattered by food poisoning scares and infringement notices can cause insurers to increase premiums or conditions or even withdraw cover altogether.

Fortunately, there is much a broker can do to help hospitality and food production businesses navigate the food safety minefield.

Surveying the landscape

For Paul Stavrou, the Hospitality Portfolio Manager at OAMPS, there is no substitute for a hands-on approach to hospitality.

“For new clients, I go to their restaurant or cafe and have a look at the cleanliness and state of the kitchen, look for any slip and fall hazards and make suggestions,” he says. “For existing clients, I visit each year before their insurance renewal to review what’s changed in their business, or if they have any new insurance requirements, and during that time I make sure that they are still doing okay and that their occupational health and safety practices are up to snuff.”

If not, clients risk food safety penalty notices, which can present problems.

If it’s only minor, insurers may put conditions for OH&S requirements on the report, and contractual cleaners every three months instead of six months. “Depending on the severity, the insurer may refuse the business and the client may have difficulty getting appropriate cover,” he says.

The nitty gritty

AIG Crisis Management National Manager Claire Stock says the essential policies for any business in the hospitality or food manufacturing sector are Contaminated Products and Products Liability.

Customer trust can easily shattered by food poisoning scares and infringement notices can cause insurers to increase premiums or conditions or even withdraw cover altogether

“There are many risks facing the hospitality and food manufacturing businesses which, if handled badly, could be detrimental,” she says. “These include adverse publicity, damage to the brand, reputational risk, loss of key customers and supply contracts, as well as potential business interruption.”

Any business supplying food to the public needs to be aware of the complex regulatory framework.

“The primary national regulator is the Australian Competition and Consumer Commission, although Food Standards Australia and New Zealand (FSANZ) is specifically responsible for administering the Australia New Zealand Food Standards Code,” Stock says. “At a local level, the State Health Departments play a key role in interpreting and enforcing the code provided by FSANZ.”

The spectre of product recalls presents special challenges for food manufacturing businesses and makes it essential for them to develop strong quality control programs.

“The new International Standard for Product Recall (ISO 10393) emphasises the importance of an organisation having a well-developed plan in place, including well-trained employees and the experience of running annual simulation exercises,” she says.

“Another important best practice is to ensure that communication is proactive, prompt and delivered through the right forums, to make sure that the message is delivered to the right audience. The days of simply placing a product recall notice in the daily newspaper are long gone, with social media now placing additional complications for organisations in product recall situations.”

A broker’s role

In most places, food suppliers must have food safety plans registered with their local council; however, requirements for compliance auditing vary widely depending on the size, nature and location of the business.

This is where a broker can serve as a trusted adviser to their clients.

Stavrou says brokers should sit down with all their clients and ensure they are aware what their responsibilities are, along with what is best practice in the industry and among their competitors.

“I insist that filters are cleaned on a monthly basis (there are filter exchange programs available that make this easy) and flue cleaning must be done on a six-monthly basis,” he says. “Flue cleaning can be arranged on a contract basis, which I’d say at least 90% of my clients have organised. If there’s minimal or no deep-frying, then it can likely be attended to on an annual basis. I’ve occasionally had a client comment about the price, but it will cost them a lot more if they don’t do it and have an event.”

“Prevention is the best method. Brokers can give guidance on what the requirements are and what the potential penalties could be if they don’t comply – not just fines but it could mean the closure of their business.”

Food poisoning: the numbers

5.4 million cases each year, or almost 14,800 a day

120 deaths

1.2 million visits to a doctor

300,000 prescriptions for antibiotics

2.1 million days of work lost

$1.25 billion estimated total cost

Just 9% of all cases are traced to homes

Source: Food Safety Information Council