Dixons Group plc Note for Meeting on 18
February 2002 with Rt Hon Michael Meacher, MP, Minister of State
(Environment)
BACKGROUND
At a previous meeting with the Minister on 24
January 2002, retailers suggested the Government might adopt a
"Lead Authority" scheme for the administration for recycling
of end of life refrigeration. Further to that meeting, retailers
have discussed with waste recyclers the possibility of re-starting
retailer take back for these products if the Government were to
acquire local authorities to accept domestic refrigeration products
from retailers and their agents, free of charge, as domestic waste.
This paper summarises the implications of this for retailers and
recyclers and draws some conclusions in the light of their comments.
Dixons Group has 18 local distribution centres
in the UK. End of life white appliances are collected from these
LDCs by nine waste recyclers, of which four (Coopers, SJ Wholesalers,
Raw and TKB) account for around 90 per cent of our white goods
disposal. These companies originally collected all our end of
life white appliances, 40 per cent of which were refrigerated
products. Of the refrigerated products, until legislation prevented
it, around 25 per cent were previously exported for re-use (having
been de-gassed prior to export they were re-gassed at the other
end). To give an indication of the volumes that could be exported,
one contractor estimates that in January 2001 there were able
to fill 15 containers for export. In January 2002, when only non-CFC
containing products could be exported, they could only fill one
container.
Since the products could no longer be exported,
there was still some opportunity for these companies to raise
revenue by refurbishing refrigerators for re-sale in the secondary
market in the UK. One contractor estimates that for every hundred
refrigerators collected from Dixons Group LDCs they would expect
to be able to refurbish and sell 30-35 units. The income generated
from these made it viable for them to collect other refrigerated
units without charge as well as washing machines and cookers.
Since the withdrawal of the fridge collection
service and the loss of income generated by re-sale, some recyclers
have been approached by local authorities with the request to
take products away for refurbishment and re-sale. These contractors
estimate, however, that when collecting from local authority sites
not more than 10 out of a hundred units are suitable for refurbishment
and re-sale. Mainly because the local authority municipal sites
store the refrigerated products with far less care and, in consequence,
many are damaged either in transit to the site or in storage.
The same recyclers have also come back to Dixons
and re-negotiated the terms under which they are willing to receive
other waste white goods now that refrigerators are no longer part
of the mix. Without the cross subsidy from the revenues from refurbished
fridges they now require a unit charge for collection from our
depots. Most contractors have indicated that this charge will
have to increase substantially over coming months to make their
businesses viable and several recyclers have recently exited the
business since the loss of refrigerator revenue.
Can take back be re-started?
We have discussed with these contractors whether
it might be viable to re-start refrigerator collection by Dixons
and their collection from our businesses if local authorities
were to waive any "commercial waste charge" and treat
all refrigerators received as domestic waste. It is apparent that
since the change in regulations many contractors have re-evaluated
their businesses and how take the view that it is no longer practical
for them to offer this service.
We therefore considered whether there might
be another route to re-starting the household fridge collection
by retailers. If the contactors are not willing to collect from
the local distribution centres it is important that the operation
is simplified as far as possible. In the case of the Dixons Group,
we would be willing to deliver refrigerated products direct to
local authority sites if we could identify one local authority
site per local distribution centre that would be willing to receive
all refrigerated products from that LDC without the complex and
administratively expensive process of matching each fridge to
the local authority of origin. (We have not been able to discuss
such a scheme with our competitors in the time available.) We
are aware of at least one scheme set up by Dorset County Council
by which small retailers are able to return end of life fridges
and freezers to the County Council free of charge. This, however,
requires the contractor to obtain the householder's name, address
and signature and to match the paperwork to the unit. While this
may be achievable by for small retailers collecting one or two
units per week, it is clearly impractical for companies which
collect several hundred or even thousands. Arguably, this particular
scheme also gives small retailers a competitive advantage over
their larger rivals even if slight. It is also discriminatory
behaviour on the part of the County Council. We are writing to
the local authority in question to ask whether this facility will
be made available to Currys' branches within their constituency.
If the Government were willing to identify local
authorities, which would be willing to accept units from out local
distribution centres, we would meet all delivery costs to those
facilities and would deliver on a daily basis. (This would be
required in order to avoid disproportionate accumulation at our
sites.) We would also be willing to permit existing recycling
contractors to remove any units they identify as suitable for
refurbishment without charge before disposing of the balance to
the local authority. This would both reduce the number of units
received by the local authority and potentially keep the small
recycling contractors in business as they would have a flow of
units for recycling without having to meet the cost of disposal
of non-refurbishable units.
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