Companies in the food supply system should have crisis management plans in place to combat growing risks from issues such as contamination, Aon Risk Solutions warns.

“You buy property insurance on a building and hope it never burns down, so it is the same thing here,” Aon Food System, Agribusiness and Beverage Group MD Rick Shanks told insuranceNEWS.com.au during a brief visit to Australia.

“You put a program together for a crisis and hope you never have to use it,” he said.

The food industry faces an increasing challenge from non-traditional risks such as tougher regulations, supply system disruptions, climate and weather, malicious or accidental contamination and brand damage.

Mr Shanks says globalisation increases supply system complexity, while consumer awareness and concern about potential problems is at heightened levels.

Regulations are tightening in developed countries, product recall costs are rising and when something does go wrong, it attracts greater attention from traditional and social media.

“One of the major changes we have seen is the proliferation of food blogs, and information is instantaneous when it happens,” Mr Shanks said.

Aon says sustainability of food production is also of increasing importance to suppliers, ranging from farm groups to retailers.

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