If your company’s name is on the label, FDA generally treats you as the responsible firm for a recall — not your contract manufacturer. Whether the manufacturer reimburses you for any of the cost depends entirely on what your supply agreement says.
Who does FDA hold responsible in a recall?
FDA looks to the firm whose name appears on the label. That firm is expected to notify the agency, classify the recall, notify customers, and account for recovered product. A contract manufacturer may be involved, but the brand owner is normally the one on the record.
This is true even when the brand owner had no involvement in the manufacturing deviation that caused the recall.
What does a recall actually cost a private-label brand?
The direct cost is product retrieval, destruction, and notification. The larger costs are usually indirect: retailers commonly remove the entire line rather than the affected lot, chargebacks follow, and shelf space is rarely restored automatically.
Whether your manufacturer absorbs any of that turns on the indemnification, recall-cost allocation, and insurance provisions in your agreement.
What should be in the agreement before a recall happens?
At minimum: which party decides a recall is necessary, who pays for retrieval and destruction, whether lost profit is recoverable, what insurance each party carries, and how long each party keeps records.
What records do you need to run a recall quickly?
You need lot-level traceability: batch records, certificates of analysis, and distribution records showing where each lot went. Brands that depend entirely on the manufacturer’s files often cannot answer FDA’s questions on FDA’s timeline.
Frequently asked questions
Q: Can my contract manufacturer be held responsible too?
A: Yes. FDA can act against the manufacturing facility as well. But that does not remove the brand owner’s responsibility for the labeled product.
Q: Does a certificate of analysis protect me?
A: Not by itself. A COA documents a test result at one point in time; it is not a defense if the product is later found to be adulterated or misbranded.
Q: Do I have to report a recall to FDA?
A: Most recalls are voluntary but are still reported to FDA, and some product categories carry mandatory reporting obligations. The reporting path depends on the product type.
Q: Should I have a written recall plan even if I have never had a problem?
A: Yes. Recall plans are one of the first documents retailers and acquirers ask for, and they are very hard to write well under time pressure.
Q: Who pays if the manufacturer caused the problem?
A: Whoever your contract says pays. Without a recall-cost provision, the brand owner frequently absorbs it and then has to sue to recover.
Video Transcript
If your name is on the label and the product gets recalled, are you the one on the hook — or is your manufacturer?
In almost every case, FDA holds the company whose name appears on the label responsible. That is you, not your contract manufacturer.
FDA treats the label owner as the responsible firm. You are the one who has to notify the agency, run the recall, and answer for it publicly. Retailers usually pull the entire line, not just the affected lot. And your supply agreement may not shift a single dollar of that cost back to the manufacturer unless it was written to do exactly that.
Read your manufacturing agreement now — specifically the indemnification, recall-cost, and insurance sections. Keep your own copies of batch records, certificates of analysis, and distribution records so you can trace product quickly. Put a written recall plan in place, with named decision-makers, before you need it.
If you are not sure who carries that risk today, contact us today.
Talk to an FDA compliance attorney before a problem becomes a recall
Talk to an FDA compliance attorney before a problem becomes a recall, a hold, or a lost contract. Contact Capote Law Firm today.
Related videos: “Is My Contract Manufacturer Actually Compliant — or Am I on the Hook If They’re Not?” and “Could One Labeling Mistake Cost Me My Walgreens or Dollar General Contract?”
This article is for general informational purposes only and does not constitute legal advice. For guidance specific to your business, contact Capote Law Firm today.