A few days after supermarkets pulled sliced mushroom packets off their shelves following a plastic contamination scare, a product liability insurer has warned that food companies suffer more than monetary losses during product recalls.

Liberty International Underwriters says while the recall itself is expensive, “the two major issues companies face after recalls are a damaged reputation, followed by a hit to the bottom line”.

“Recalls cause significant impact on a business because costs can run into the millions. This can even occur from products with a reasonably low turnover.”

The 2015 recall of contaminated frozen berries cost Patties Foods more than $9 million, with the Victorian company quitting the frozen fruit market a year later.

Liberty says 626 food-related recalls were recorded between 2008 and last year – about 63 a year on average. Three-quarters of food recalls in the past three years related to undeclared allergens, microbial contamination and foreign matter.