Imagine this: your brewery is serving customers when suddenly a bottle explodes and injures a customer. This may not seem like a likely scenario, but just a few years ago, our industry saw a case where a Corona bottle exploded, injuring a customer’s eye resulting in total vision loss in that eye.
Product liability cases are a difficult issue in the craft brewing industry as well. While we do not always see exploding beer cans and bottles, there are a wide range of product liability challenges a brewery has to navigate that can prove costly and damage a brewery’s reputation in the industry and with customers.
Five product liability cases that have resulted in damaged reputations for the U.S. craft breweries involved offer cautionary tales and helpful insights for the rest of the industry.
Case 1: Packing Contamination
Contamination in the packing process often leads to significant financial and reputational losses. One mid-sized brewery saw this issue firsthand a few years ago. In the brewing process, a bottling machine malfunctioned, and glass shards contaminated several batches of beer. The shards impacted over 10,000 bottles and the brewery had to recall all affected product.
What could the brewery have done to prevent this? Here are a few best practices to consider:
- Perform Regular Equipment Maintenance: Breweries should schedule routine inspections and maintenance for bottling and packaging machinery.
- Enforce Quality Control: Safety managers should implement strict quality checks at every stage of production and packaging.
- Use a Pre-Bottling Washer: Consider using a pre-bottling washer to rinse bottles and remove potential contaminants before they are filled.
- Use Compressed Air or Invert/Blow-Out Systems: Incorporate systems that use compressed air to blow out debris from bottles and cans before filling, adding an extra layer of safety to the process.
- Establish Packaging Contracts: Establish clear contracts with third-party packaging companies if your brewery outsources to define responsibilities for maintenance and quality control. These agreements should include a clause for liability in contamination incidents.
Case 2: Contaminated Ingredients
A brewery was forced to recall several kegs after discovering a contaminated shipment of hops introduced harmful bacteria into a batch of beer. The brewery was forced to halt distribution and lost contracts with several key partners, setting the brewery back heavily. Some lessons learned from the incident include:
- Vet Suppliers: Partner with reputable suppliers and require detailed testing documentation for all ingredients.
- Conduct Batch Testing: Conduct thorough testing of all ingredients before initiating the production process.
- Audit Your Supply Chain: Regularly audit suppliers to ensure they continue to meet safety and quality standards.
Case 3: Allergens in Specialty Brews
One brewery was preparing a limited-release peanut butter stout for distribution to customers. This beer triggered severe allergic reactions among several customers and the brewery was liable because the beer’s label failed to properly disclose the presence of peanuts. Risk management tips include:
- Label Carefully: Ensure allergen disclosures are prominently displayed on all product labels.
- Consider Specialty Products Carefully: Assign additional quality control measures to seasonal and specialty brews, particularly ones with common allergen ingredients.
- Review with Lawyers: Have a legal team review labeling and advertising for compliance.
Case 4: Product Spoilage During Distribution
A brewery was shipping a large quantity of beer to a distributor, but improper temperature control during transit spoiled the product. The brewery had to initiative a recall to prevent distribution of the compromised beer. These steps could have prevented the issue and improved the response:
- Implement Temperature Monitoring: Use IoT devices to monitor and document temperature conditions during transit.
- Establish Clear Third-Party Agreements: Clearly define quality and handling standards in distribution contracts.
- Create a Recall Plan: Develop a robust recall plan to minimize delays in addressing product recall scenarios.
Case 5: Foreign Object Contamination
One brewery was forced to recall several kegs of beer after discovering small metal fragments in its beer. The issue was traced back to a malfunction in the brewing tank. A few best practices to prevent this type of incident would include:
- Conduct Regular Inspections: Conduct regular inspections of brewing tanks and associated machinery to catch any malfunctions ahead of time.
- Implement Production Audits: Frequent audits can catch most anomalies in the brewing and packaging processes.
- Enforce Incident Response Training: After any product liability incident, train employees on how to respond quickly and correctly. This will limit the damages from a contamination event.
A product liability case can swiftly damage a brewery’s reputation and bottom line. One other critical avenue to consider would be partnering with a specialty insurer who knows the brewery niche. The right insurance partner will be able to identify gaps in safety measures and address risks with strong mitigation tips designed to protect your brewery. This, in tandem with a safety-focused mindset, can limit product liability cases and keep customers and staff members safe.
Paul Martinez is program manager and insurance brewmaster for Brewery PAK Insurance Program. Martinez has 20+ years of commercial insurance experience and 10 years of experience underwriting breweries. He can be reached at 888-386-5701 or [email protected].
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