Analysis of Potential Economic Damage to Consumers and Business Entities Posed by Circulation of Non-Conforming Food Products and Ways to Reduce It

Abstract

Introduction: Failure to comply with sanitary and epidemiological requirements poses risks of harm to consumer health and damage to business entities, which reduction necessitates the search for effective preventive measures. Objective: To analyze the potential economic damage to consumers and business entities related to circulation of food products and to consider ways to reduce it. Materials and methods: We have analyzed data collected by the Sverdlovsk Regional Rospotrebnadzor Office on violations of mandatory legal requirements by business entities and administrative fines imposed within inspections; the Center for Hygiene and Epidemiology in the Sverdlovsk Region on laboratory test results and customer complaints; the Federal State Statistics Service (Rosstat) on the prices of food products by groups; the Regional Operator for Municipal Solid Waste Management on the cost of disposal of a ton of withdrawn non-conforming products, and the Yekaterinburg Medical Research Center for Prophylaxis and Health Protection in Industrial Workers on the results of audits and questionnaire-based surveys of food enterprises for the years 2015–2019 and 2022 using Microsoft Excel tools and the Statistica 10 software. Results: The annual economic damage from the circulation of non-conforming products for food retailers averaged 73,893.5 thousand rubles. We observed a 1.5-fold increase in the number of customers’ product quality complaints. The structure of damages shows an increase in disposal costs and those related to customer complaints. At the same time, decreasing administrative fines undermine motivation of businesses to comply with mandatory sanitary and epidemiological regulations. Large and small retailers lose on average 2,630.2 and 16.2 thousand rubles per enterprise per year, respectively. An integrated approach to carrying out preventive measures using theoretical and practical knowledge and skills in managing the quality and safety of products has been shown to reduce the number of violations of sanitary and epidemiological requirements in more than 40 % of enterprises, that of complaints – in 20 % of the companies, and general expenditures on withdrawal and disposal of non-conforming and dangerous products. Conclusions: After supervisory activities have been cut down, the total potential damage to business entities is largely attributed to customer complaints and disposal of non-conforming products. Large retailers selling dairy, meet, and fish products, fruit and vegetables are at higher risk of economic damages. Raising awareness of the total economic damage among business entities when carrying out preventive measures can be considered as an incentive to comply with mandatory quality requirements.