Examination Of Witnesses (Question Numbers
160-168)
MR DAVID
NORTH
12 DECEMBER 2007
Q160 Jo Swinson: But they will find
percentages easier to work out?
Mr North: They do not need to
work out the percentage. They need to see the percentage. That
is the beauty of percentages, they are worked out for you. Are
we confident that a large number of customers know that 80% is
higher than 70%, 60, 50 or 40? Yes, I think we are and I think
I would say that fairly unashamedly.
Q161 Jo Swinson: I agree, but somebody
working out how much of something they can have—we are straying
perhaps slightly off topic but looking at the two systems myself
I know which I find easier to work out and I always found that
maths was actually something I quite enjoyed at school. Just to
go back onto the subject matter, am I right in thinking that Nature's
Choice is the standard you have for all your fruit and vegetables,
but you also have another range called Naturally?
Mr North: I am glad to have the
opportunity to clear that up. Naturally is a much smaller system
which really applies to cleaning and one or two other products,
so it should not really be confused with Nature's Choice, which
is a much bigger scheme.
Mark Pritchard: Could I just interject,
Chairman, and put on the record my thanks for the fact that that
particular labelling suggests that there is no animal testing
and to applaud Tesco for their animal welfare credentials?
Q162 Jo Swinson: On Naturally, is
that again similar to Nature's Choice but just for a different
product range?
Mr North: No, it applies to a
very small range of primarily cleaning and related products.
Q163 Jo Swinson: So consumers have
got the choice of buying a Naturally one or a Tesco value one?
Mr North: They would have the
choice of buying a Naturally one or a branded one, or in some
cases a value one or a mid-range one, or in some cases a Finest
one, but I am not sure how many Finest products we have got in
the household categories.
Q164 Jo Swinson: How does Naturally
actually differ from those other brands which Tesco has itself
like Finest? Is it more of an accreditation scheme or is it effectively
another brand?
Mr North: It is a set of products.
It is 30 something products across the household range. The differentiator
is that those products derive from plants. That is the main claim
on which Naturally rests. We then make sure that those should
exceed legislative requirements, for example on biodegradability,
but it is actually generally speaking the fact that they are plant-derived
and therefore overcome some of the difficulties other products
might have, as Mr Pritchard explained.
Q165 Jo Swinson: Okay. Just to move
on to the issue of carbon labelling, which I know we have touched
on already in this session, you are one of the companies working
with the Carbon Trust on a range of products to come up with the
labelling system. What is the progress on that and what are you
intending will happen in the future on the carbon labelling of
Tesco products?
Mr North: We said in January that
we would begin the search for a universally accepted and commonly
understood measure of the carbon footprint of each product we
sell, looking at its complete lifecycle, and that we hoped over
time this would enable us to label our products so that customers
could compare their carbon footprint as easily as they can compare
other things. We have always understood that there is a number
of people working on this and views differ between those who believe
it is the right approach in terms of understanding the carbon
footprint of a product in order to drive change up the supply
chain and those who, like us, believe there is quite a lot of
potential in terms of empowering customers to make choices between
products with lower footprints as opposed to higher footprints.
We have been very encouraged. As we were saying earlier, this
is an issue on which retailers, Government, agencies in the form
of the Carbon Trust and NGOs are happy to work together. We are
currently embarked upon a trial of around 30 products, working
with the Carbon Trust, and what we are doing is life cycle analyses
of those products. We are also separately doing some work on testing
the degree to which customers can understand the carbon currency
and how we can try and communicate whether a product has a higher
or a lower carbon footprint than, for example, the average for
that category of product. It is quite detailed work. We are getting
on with it as diligently and as rapidly as we can.
Q166 Jo Swinson: Do you ultimately
envisage having a carbon label on all your products?
Mr North: That is our ultimate
aspiration. Where we are focused more at the moment is on what
the next step should be. What we found in conversation with customers
was that they need help to understand what the carbon footprint
of a product is expressed in grams. I know you discussed that
in the previous session. They need to be able to compare that
with what the average for the category might be or what a high
number for that category might be, whether it is a bag of crisps,
a rose, or a bag of washing powder. They also need to understand
what is measured when you make the claim for that carbon footprint.
Is it simply the embedded carbon in the production of the product
or is there some assessment of how you might take that home, and
what you might then do with it and how you might dispose of it?
I think in each of those we, with our partners, need to strike
a balance between ensuring that the information is comprehensive
and ensuring it is actually easily understood by the consumer.
Q167 Jo Swinson: Given all these
difficulties in making it easily understood for the consumer,
do you think consumers will actually drive change through carbon
labelling or is it more for yourselves and manufacturers of products
to drive that change through wanting to improve year on year on
your principal products?
Mr North: I think I differ from
the answer Dr Knight gave on that. I think it is both, but I think
more importantly than that if we can, through the skill of communication
and to some degree through the skill of marketing, reach a position
where customers are actually empowered by carbon labels on products,
then you can be even more confident that manufacturers, whether
they are own label manufacturers or branded manufacturers, will
seek through the supply chain to reduce the footprint of those
products because they will know that that will motivate consumer
choice. I think if you say it is just a supply chain issue, then
progress will be slower and over time will be less than if you
can galvanise the consumer.
Q168 Mark Pritchard: Briefly, Mr
North, you are setting out what you are doing in the United Kingdom
and I just wondered whether this is being exported to your new
US business? Are you leading the way in the US food retail market?
Mr North: It is early days in
the US on the West Coast, but again what we have picked up in
setting up that business and in building it really from scratch
is that environmental sensibility is a growing and important aspect
of your offer to customers and how customers in turn view you
as a business. So we have established that business on the basis
that it should operate with a lower carbon footprint than a comparable
competitor. It should operate with products being sourced locally
wherever possible with a lower environmental impact wherever that
is possible. We have got the largest installation of solar power
on our distribution centre serving our stores in California as
well, so it is a very, very important aspect of that business.
Chairman: Okay. I think we wish you every
success in trying to create environmental sustainability within
a year and can I thank you for coming along and giving evidence
this afternoon.
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