Dixons Group plc briefing note December
Dixons Group is Europe's largest specialist
retailer of consumer electronic and electrical products. The Group
has more than 1,250 stores across the UK, the Republic of Ireland,
the Nordic region, Spain and France and trades in the UK and Ireland
as Dixons, Currys, PC World and The Link.
Currys is the leading choice for families buying
electricals for the home. We deliver seven days a week to households
throughout the UK.
Over the last financial year the Group collected
750,000 end of life white appliances (fridges, freezers, cookers
and washing machines), from people's homes at no cost to the consumer.
Of these, approximately 300,000 were fridges. These were recycled
or refurbished by a network of contractors, relieving Local Authorities
who would otherwise be obliged to collect or receive these products
of a significant burden. In effect Currys provided the consumer
and local authorities with a cost-free channel for the disposal
of this domestic waste.
Until November 2001 our sub-contractors, a network
of small waste disposal businesses, collected these appliances
from our depots. They disposed of them in one of three ways. If
suitable for re-use they were either refurbished for re-sale in
the UK, often to low income households, or exported for further
use countries outside the EU providing an income stream for the
contractors. If not able to be reused the contractors extracted
CFC gases from the fridge compressors, when present and recycle
them for their constituent parts and disposed of non-recyclable
materials through land fill.
Since mid-November contractors have withdrawn
these services as they will have no legal route to dispose of
these products from 1 January 2002 when phase two of EC Regulation
2037/2000 on substances that deplete the ozone layer is implemented
governing disposal of products containing CFCs. Phase two requires
the removal also of the CFCs from the foam insulation in the fridge
walls and doors, for which there are no facilities in the UK.
This will also end the export of fridges containing
CFCs to non-EU countriesthus ending an export revenue ending
stream for small businesses. This, combined with the non-availability
and heavy capital investment cost of extraction plant to comply
with the new regulations means that many contractors believe their
business is now non-viable.
What would we do were the implementation of these
regulations to be delayed?
We rely on these small contractors to dispose
not only of used fridges but also other used white goods (cookers
and washing machines). The resale potential of these is far more
limited and for many contractors it was the fridge revenue that
made their businesses viable. Without the fridge revenue several
have given notice that they may withdraw all collection services.
Many will exit the recycling and waste disposal business altogether.
Were the regulations to be delayed
we believe this network of contractors could be persuaded to restart
their collection services. For their businesses to be viable they
need this part of their business to generate an income streamwhich
would require the retention of the ability to export fridges suitable
for sale and re-use. We estimate that, until now, up to half of
the UK's end of life fridges were exported rather than disposed
Were Government to signal its intention
to initiate the recycling credit scheme flagged by DEFRA officials
we believe that this could create the impetus to get local authorities,
major waste contractors and retailers together to investigate
the feasibility of creating self-funding CFC extraction plants.