Devoted to Corporate Attorneys, Corporate Lawyers, and Corporate Counsel

The following is not meant to be legal advice.

General Mills announced a voluntary recall of 5 million frozen pepperoni pizzas.  The pizzas were sold under the Totino’s pizza and Jeno’s pizza brands.  The recalls were due to possible E. coli contamination of the pepperoni.

As with the recall of toys in the news recently, does the recall of food items change in terms of liability for the manufacturer?  Since the possibly contaminated pepperoni came from a separate supplier, not General Mills itself, General Mills might seek indemnity from the supplier.  However, if General Mills never had in its purchase order terms on indemnity, reimbursements from the supplier will be difficult.  Also, if the supplier is not located in the United States, or if it is in a country where it may be difficult to litigate a case, General Mills might decide to just pay for the losses from not being able to sell the pizzas.  Sometimes in a recall situation, the supplier might give some incentive for a company to do business with it even though it may not indemnify for losses from a recall.  Such incentives may be discounts on future orders, or giving some orders away for free. 

The situation will likely prompt General Mills to manage the quality of its suppliers?