The recalls not only cost companies millions of euros, but was also a blow against the food industry's attempts at regaining public trust in the food supply chain.
The recommendations from a panel investigating the Sudan 1 incident in 2003 include calls for managers to use international food safety procedures in determining the source of all their ingredients, even minor ones.
The panel also called for the food industry to create better communication channels among manufacturers so that they could share techniques and information, focus more on risk management of the supply chain, and respond faster in recalling contaminated products.
The report is the result of an EU-wide alert issued in May 2003 by France's regulators relating to the detection of Sudan I, an illegal dye, in a product containing hot chilli.
Between May 2003 and February 2005, UK manufacturers were forced to recall about 300 products.
The UK's largest ever recall of food products was undertaken in February 2005, following the discovery that a batch of chilli powder had been supplied to the manufacturer of Worcester sauce in 2002.
"These events showed how a contaminated minor ingredient -- chilli powder -- with a long supply chain had been used in different products, many of which had a long shelf life," the panel stated in its report, released on 14 September.
Some of the contaminated products were themselves later used as ingredients in other products, some also with a long shelf life.
The incident had a major impact on the food manufacturing, distribution, retailing and catering industries, local authority enforcement bodies and the Food Standards Agency (FSA), the panel stated.
The independent panel was established to make recommendations on what regulatory and industry-wide changes should be made to help all players in the supply chain identify emerging risks and prevent them developing into food safety incidents in future.
The review report covers recommendations relating to incident prevention, incident handling, communications and relationships.
The panel noted that the FSA has already taken some actions since the Sudan 1 incident, including the setting up of a special task force to handle food contamination emergencies and establishing a food fraud database to help with investigations The recommendations for industry action include calls for companies to identify the contamination of minor ingredients of distant origin as potential hazards in their Hazard Analysis and Critical Control Point (HACCP) plans.
Industry should also seek ways to share information based on its sourcing practices and HACCP, the panel stated.
"We are aware of the lessons learnt by the industry in relation to colours in spices and are impressed with the practical steps they have taken," the panel stated.
"However, we are not convinced that this has been carried across to a wider range of potential contaminants or to other ingredients and recommend that contamination of minor ingredients of distant origin should be clearly identified as potential hazards in the industry's Hazard Analysis and Critical Control Point (HACCP) plans."
HACCP is a set of international principles that food companies are required to implement in the EU.
The principles set out how processors assess hazards and establish control systems that focus on the prevention of contamination incidents rather than end-product testing.
The panel also called on industry to speed up the preparation of procedures for sharing sensitive information in contamination incidents with other businesses, through trade associations and, when appropriate, with the FSA, the panel stated.
To help make recalls faster, the industry should determine how the loophole in traceability between smaller supplier and distribution operations, such as "Cash and Carry" outlets, and smaller retail can be closed, the panel stated.
The panel also called on the FSA to take more of a central role in ensuring more co-ordinated attention to intelligence gathering, scanning and implementing early warning systems.
The FSA should also work to proactively share such information with the food industry, the panel stated.
"We see major difficulties in communication between the FSA and the majority of the 600,000 food businesses in the UK, which do not belong to any trade association," the panel stated.
The food industry should seek ways to share information based on its ingredient sourcing practices and experience of hazards, the panel recommended.
The panel also called on the FSA to organises regular practice exercises with industry and enforcement bodies to deal with any future, major food safety incidents in the future.
The panel noted that representatives from both the Seasoning and Spice Association (SSA) and Premier Foods told them that they were now insisting on traceability for spices to be taken back as far as the grinding stage, as contamination or adulteration of the product is much easier after grinding.
The SSA now advises its members not to buy pre-ground material.
Industry representatives also told the panel that more scientific work was now being done to test for various potential hazards, to develop methodologies and screening devices and improve the limits of detection.
Industry also stressed the need for harmonized EU-wide analytical methods when testing for contaminants.
The panel also noted that a paper published in 1995 in the Indian Journal of Food Science and Technology describing the adulteration of spices in India, including by Sudan I, could have been picked up by the industry.
Yet no one seemed to consider the hazard until the French discovery of the contamination in 2003, the panel stated.
Heinz bought the Worchester brand from Danone in 2005 as part of its purchase of the HP brand from the company.