Waste Strategy for England 2007 - Environment, Food and Rural Affairs Committee Contents


Examination of Witnesses (Question Numbers 240-259)

MR JULIAN WALKER-PALIN, MS GEMMA LACEY, MR ARTHUR SAYER AND MR RICHARD WHITEFIELD

19 NOVEMBER 2008

  Q240  Chairman: That is an impressive exposition of what you are doing. You said effectively it was your parent company which decided this was the right thing to do. Does that suggest that the waste strategy which the Government has put forward and other policies did not actually have an influence on your company's policy?

  Mr Walker-Palin: No, I do not think that is true. I think you have to look at the way that ASDA runs its business. We are a very commonsense business and everything we do is about delivering low price for our customers.

  Q241  Chairman: I am glad you got your commercial in early! That is all right.

  Mr Walker-Palin: Our business model relies on driving out inefficiencies. What the Government's waste policy, in particular the increasing of the Landfill Tax, has allowed us to do is to make a very strong business case for investing in the new technology needed to divert the material to landfill. So I think if I had to pick out one key element from Government policy, it has been the increase in the Landfill Tax.

  Q242  Chairman: What is John Lewis's position on this? We are going to come on and talk about some of the very good things you have been doing, but do you have an overall approach and philosophy like ASDA does to this problem?

  Mr Sayer: Yes, we do. It differs from ASDA, as I suspect you would expect it to from company to company. We have an aspiration to divert our waste from landfill to the extent of 95% by 2013, so perhaps not quite as bullish as my colleague's on my right, but the approach we take is to adopt a responsible approach to the waste that we are generating and I am in the post that I am in with one other colleague in the last year to obviously try and identify what fits the size and scale of our business and looking at how we can actually dispose of the waste which our operations generate. We do use the waste hierarchy. We support that in terms of reducing, reusing, recycling and then recovering. To actually get to the levels we want to aspire to of 95% from landfill will require energy from waste solutions to actually deal with the waste which we cannot recycle, which is difficult to do, but at the moment we do not see fully how you can get to 100% because there are some residues from these processes which still exist and are categorised as hazard waste. At the moment those solutions seem not to be there, but as they emerge—and hopefully they will in the next five years or so—then obviously that will help us get to those targets.

  Q243  Chairman: From the small business sector, Mr Whitefield, what is your overall philosophy and approach?

  Mr Whitefield: We have only been developing our management policy over the last two years really and that is with the onset of having to take on ISO 14001, which is basically a requirement on us by our suppliers. So there is not too much external drive other than our customers on that. We had very modest targets to start with. We were looking to reduce landfill by 5% a year to start with. We are reducing it by about 40% per year at the moment. We have no defined ultimate target because we are not sure where we are going with it, but what we are trying to do is to have progressive targets as the years go on.

  Q244  Chairman: Can you just for the record—because you are an electrical business, are you not?

  Mr Whitefield: It is mechanical engineering really.

  Q245  Chairman: Right. Just give us a 30 second scenario of your business, because I think people know who ASDA and John Lewis are but they may not know your company.

  Mr Whitefield: We are a design, manufacture and supply company. We produce conductor rail for the railways, namely new aluminium conductor rail which is going in on the Jubilee, Northern and Victoria Lines. We provide the shoe gear that collects the electricity from those rails. Overhead systems, the Dublin Lewis tram system we have recently installed, and pantographs which go on top of the trains and collect the electricity for all the UK trains. We are in Somerset and we are a company of around about 180 people.

  Q246  Chairman: Very good. Can I ask our two colleagues from the retail sector, you have talked about what you are doing to minimise your own disposals to landfill over time, but what is your approach to minimising the incidence of waste itself in the first place? Do you want to start for John Lewis, Mr Sayer?

  Mr Sayer: Yes. In terms of minimisation, packaging is probably what you are referring to, I suspect, and my colleague, Gemma, I think is actually more informed on that than I am.

  Ms Lacey: Obviously following the waste hierarchy, then we are very much focusing on reducing the amount of packaging we produce, first and foremost. As part of our commitment to packaging reduction we look at not just opportunities where we can eliminate unnecessary packaging but also look at opportunities to introduce innovative new types of material. There are opportunities as well around lightweighting particular types of packaging and introducing recycled materials.

  Q247  Chairman: Can I just stop you there so that we can be entirely clear, because all of us are customers of a product which is packaged, but I think you are talking about what comes in, if you like, from the warehouse end in which the product is either delivered to your stores or in the case of Mr Walker-Palin, who gave us a very clear indication, where you would have an outer container which can then ultimately be modified to go on display directly in a store?

  Ms Lacey: The approach is actually the same in terms of obviously looking at both the secondary and tertiary packaging, which would be in terms of what is actually delivered into our stores, but when I talk about, for example, when we are looking at eliminating unnecessary packaging then it is about looking at our product range and identifying areas where we can eliminate packaging which we consider no longer necessary. Examples of that within Waitrose are that we have been looking particularly at the fruit and vegetable range and also our meat, fish and poultry. So examples of that are where we have removed the outer sleeve from our breaded fish packaging, which actually results in a reduction of around 33% in the weight of the total packaging. There are also things around our salad bags, for instance, where we introduced lightweighting, again saving reductions overall. They are not always necessarily visible to the end consumer. We have also been looking at what alternative types of material we can use as well, from trialling materials such as biodegradable compostable types of material, but again it is very much obviously making sure that we have still got packaging which is fit for purpose and adequately protects the product both in transit and also on the shelves, and also carries all the relevant information we need for the customer from an information perspective. So it is really a balance of looking at opportunities across different areas, and what we are now looking to do, where we have focused on specific categories, is actually taking that learning and sharing that best practice through packaging forums with our buying teams and with our suppliers to look at further opportunities across the whole product assortment and the packaging around that.

  Q248  Chairman: Okay. Mr Walker-Palin?

  Mr Walker-Palin: For our primary packaging, ie which is around our products, we look at it in three ways. We look at right sizing the packaging that is around there, we look at lightweighting for the packaging that is around it and we look at bringing in more recycled content where we can. We were one of the first members, as I believe John Lewis were, to sign up to the Courtauld Commitment of a 10% reduction. We looked at the 10% reduction of lightweighting of packaging and said, "Actually, we think we can set ourselves a stretch target on top of that," so we have been working over the last two years to a 25% reduction by weight in our primary packaging and we are currently at about 24% and will hit 25 by either the end of next month or probably the first or second week of January. We started off looking at our Organics packaging range because we thought it is the kind of range where you can make some real differences and customers will work with you around those differences, so we could do some trials to see what worked and what did not work. Generally, the approach which we took worked there in terms of reducing the amount of packaging that is around it and then lightweighting the materials we are using. We are also one of the lead partners on WRAP's light glass project, so we looked at particularly moving away from glass and into plastic bottles. A lot of our materials now have been lightweighted from materials like glass into plastic. The reason we have done that is that there are lots of efficiencies throughout the whole supply chain. If you can take the weight and the thickness of a piece of glass and replace it with plastic, you can then fit more of these goods on a trailer itself. The trailer is lighter, so therefore you are moving more goods for the same trailer at less fuel and we can fit more of these goods on the shelves, which helps in terms of availability to customers as well. We have so far removed about 40,000 tonnes of packaging from our products. What we are now doing, when we have done lightweighting, which we have done so far, is looking at what is next and one of the key challenges we have got is if you take lightweighting too far—and I think a block of cheese is a good example—if you have a prepared block of cheese which has a lightweight plastic packaging around it, as soon as the customer cuts that packaging it starts to go off, notwithstanding whether it is in the fridge or not, and probably if we just put the lightest possibly packaging around that a lot of that cheese would go in the bin and then turn into food waste and create a lot of methane. We believe it is probably better for items like that to put a zip lock on that piece of packaging and therefore you can re-seal it, it retains its freshness and all of the product can be eaten, but as soon as you start to do that the packaging then becomes heavier. So we have reached that point where we have done a lot of lightweighting and now need to look more across the whole lifecycle of the product to see what is actually the best direction to take from here.

  Q249  Miss McIntosh: How much control do you have, Mr Walker-Palin, over the producers of the supplies on the type of packaging you are given? Can you virtually dictate how you wish the product to be packaged?

  Mr Walker-Palin: What we have done is we have brought in an external consultancy to help us with this who are experts in packaging. To be really clear, our commitment is around our private label packaging, so it is around the ASDA packaging, not around branded packaging. In terms of branding, we do share a lot of information with our brand owners. I did a seminar with Unilever, for example, yesterday where I was talking about packaging and what we have learned and what we could pass on to them. In terms of the private label, the own brand product, then yes, we will sit down with the manufacturer and say, "We have this target to lightweight the packaging and we do require you to work with us on this. Let's work together on what the appropriate solution is."

  Q250  Miss McIntosh: Do you see any evidence yet that the producer responsibility is working in terms of packaging?

  Mr Walker-Palin: I think it is well-established that yes, it has worked so far probably, I would suggest, with the exception of mixed plastic packaging. What we have moved to very quickly, the whole retail sector, is that as part of the lightweighting work which has been done under the Courtauld Commitment, as I said before, more of these materials are now plastics which are very light materials, but the non-rigid plastics in particular, the things which are not generally bottle shape, are not usually collected by local authorities for recycling. So I think producer responsibility now has a role to play in looking at more of those materials and certainly we are part of the Packaging Recycling Action Group, which is a group of industry members—and I actually chair the group—which works with Defra on trying to find solutions to this. We are very pleased with the packaging strategy that Defra is working on at the moment to look at tweaking producer responsibility, to focus on some more of these materials, because we do get a lot of postbag from our customers saying, "Why have you given us this plastic packaging? I can recycle glass but I can't recycle plastic. I don't want it," whereas actually we know environmental it is the right decision to take. But where we can, we need to close that loop and get that material back either to convert into energy or preferably closed loop recycling.

  Q251  Miss McIntosh: I will come back to the energy question in a moment. Could I ask John Lewis how we can reduce the Primark factor and the throwaway society? Are you looking at ways of reducing that level of waste?

  Ms Lacey: Again, going back to the waste hierarchy, I think it is about working across all the different areas and I think it is about working in all those areas in balance, so looking at both packaging and also product optimisation in terms of the materials you are using right through to then obviously putting in place the right infrastructures then to actually be able to use those products in a responsible way but also then deal with those products once they come to the end of their lives.

  Q252  Miss McIntosh: Do you think price has a role to play in Primark?

  Ms Lacey: Certainly from our perspective it is about providing quality products and as part of that I think we have got a big responsibility in terms of how we communicate the use of those products and in terms of the responsible use of those products.

  Q253  Miss McIntosh: Can I ask Mr Whitefield on this point: is it difficult for small and medium sized companies to demand higher environmental standards from suppliers?

  Mr Whitefield: Yes, but it depends on where the goods are coming from. We purchase an awful lot of aluminium, 2,000 tonnes a year, and if we are buying that from UK sources, meals in the UK, then it is very easy for us to use recyclable packaging, ie either aluminium or steel packaging. When we are buying it from abroad—and an awful lot comes from Germany—we find that there is a tendency to use wood packaging because the transport costs do not make it effective for us to reuse the packaging. So that is one of our main things, to try and get rid of wood packing with reusable steel packaging in the main. Our biggest waste is wood. We are throwing away 5 tonnes a month. We want to reduce that by introducing reusable stillages for our equipment and for some of the products which are coming in, but it is very difficult when you have got a supplier in Germany and you are trying to get them to actually come on board with that and also keeping the cost down, because it does have a cost implication on those goods.

  Q254  Miss McIntosh: Are you able then to collaborate with other small companies from Germany?

  Mr Whitefield: Not really. Because of the uniqueness of our product it is very difficult to do that. The other thing which does affect it is the transport that we are using from an environmental point of view is very much utilised in delivering that product to other areas of the world, so virtually every wagon that comes into our premises is re-booked again by our transport agents to take goods away. So that space is probably better utilised for that than it is for transporting packaging around. But we have had contracts in Europe where we have had demands on us to return our packaging to the UK.

  Q255  Miss McIntosh: Can I just return to something Mr Walker-Palin said? You take the packaging, the plastics, to Skelmersdale and you have a facility there where you go?

  Mr Walker-Palin: Not in Skelmersdale. What we do is we take it back to Skelmersdale, where we bulk it all up. At the moment we have got it split into three way streams, so we have got animal by-products, bakery and then everything else, because we are looking to the future, hoping that animal by-products will probably go for rendering and therefore biofuels. Bakery will hopefully go to feeding animals and there are certain microbiological issues to resolve first. Then we are hoping the rest of it will go to an anaerobic digestion facility because we like the idea of getting electricity and digestate from these materials, but there is not currently sufficient infrastructure in the UK of anaerobic digestion so what we are doing is bulking it all up as one and then our waste contractor, Veolia, is taking it away to a facility, I believe in the Midlands, I think it might be in Bedford or Coventry, where it is then being burnt to create electricity. But that is our short-term solution. Our long-term aim is to have proper uses appropriate to the materials that we are bulking up, which is why the process we have got actually has the three streams rather than everything in one go.

  Q256  Miss McIntosh: Does your company own the Birmingham facility?

  Mr Walker-Palin: No.

  Q257  Mr Drew: It was just on the plastic and glass issue that I wanted to come back to Mr Walker-Palin, and maybe Ms Lacey as well. I remember from years ago and I still see in a lot of European supermarkets customers returning their empty bottles to the supermarket and back, presumably to the supplier for re-using. Have you looked at the feasibility of that, the practicality of that, and indeed the environmental issues involved? Is it something which could be re-introduced and ought to be re-introduced?

  Mr Walker-Palin: I think from ASDA's perspective we are looking at this from two angles. One is the general "bring bank" facilities we have in our stores where customers can bring those kinds of materials back. We do not believe they are probably as attractive as they ought to be. However, almost all of these "bring banks" are operated by the local authority in which area the store resides, so we do have a process where next year we are hoping to roll out more and more to engage with the local authorities to spruce up these facilities. In fact, we are running a competition with schools in Leeds and schools in Bristol at the moment to say to the schoolchildren, "Have a look at these facilities and how would you encourage your parents and parents that you know to use them more?" As part of that we are saying, "Do we need to bring more different types of recovery within those facilities?" One of the difficulties is that if the local authority does not collect that material for recycling, they then will not collect it from the bring bank facilities because they are serviced by the local authority. But we believe that is something we need to focus on more next year, and we will do so. Then in terms of reusable packaging, we certainly see a place for certain types of products. What we are trying to work through at the moment with a company called Easyserve is on the liquid detergents. We like the idea and we tried it about eight years ago and we want to dust it off and have another go with new technology, whereby customers would click in a reusable pouch for their washing detergents and then by reusing the pouch we can give them money off at the checkout as well. There is a lot of cash which needs to go into making that work. I think it was something like £150,000 in terms of R&D costs, which is a huge amount of money to get to the position to put this machine in, but it would also have productivity savings in terms of merchandising on the shelves as well, so we are motivated to try to make it work. For us, it is probably about six to 12 months away before we get to that point.

  Q258  Chairman: Could I just take you back to the line of questioning which Anne McIntosh was pursuing on this question of a so-called Primark effect. Let me say at the outset this is not an attack on Primark as a brand, but it was the language which was used when we visited a waste site in Croydon. The operator commented that they had seen a significant increase in the amount of textile waste which was being disposed of. Five years ago it constituted 7% of the waste stream and now by weight it was up to 30%, and it was presenting them with real challenges because these materials were not easily recyclable, in other words it was either landfill or burning them. It does raise a rather more fundamental issue about sustainability because I suspect from the John Lewis Partnership, a point which you were making, Ms Lacey, you concentrate on perhaps the longevity of life in terms of the clothing offer, whereas, with no disrespect to ASDA, the price points are going to be lower. You have a different appeal. How much do these sustainability arguments influence, if you like, the type of textile goods you are selling, bearing in mind they now seem to be occupying an increasing proportion of the waste stream with difficulties for ultimate disposal and so some quite serious questions on sustainability are being raised?

  Mr Walker-Palin: We have textile recycling facilities in all of our stores, so customers can recycle textiles through us. I think it is important to look at it from the angle that we are there to give our customers the product they demand from us, and what is really interesting in terms of the kind of fast fashions and people buying clothes and then disposing of them that we might have seen in the past is that we did a survey with our customers at the beginning of this year and said to them, "What do you like about our ranges? Do you think we turn them over fast enough? Do we freshen the designs fast enough?" What they actually said to us is that they are making product choice decisions now around quality and value for money. They are shopping for wardrobe essentials rather than impulse buys, which fast fashion tends to be. So we have now completely changed our brand offer on our George clothing to reflect that and are moving away from the so-called "fast fashion". We have done that in three areas. We have brought three new brands in. We have brought in a brand called Moda for the ladies and we have brought in Boston Crew for the gentlemen and G21 for the younger customers, and G21 are the kinds of customers who in the past would have gone for cheap, fast fashion, and we have moved them away from the disposability of goods to the durability of the textiles they are purchasing. In certain areas, footwear being one, we have completely moved away from fast fashion. We have a stable range of footwear. Generally as a whole business we have reduced the number of clothing options available to our customers by 20% and it is our strategy to actually fall in line with what our customers are demanding, which is yes, the right price, but also clothes which will last them for a considerable period of time because they do not have a huge amount of cash in their pockets. They want to buy something, invest in it and then use it longer than perhaps they have in the past.

  Q259  Chairman: Now, Ms Lacey, in the interests of proper retail balance, having had a very good commercial for three new brands from ASDA, is there anything you would like to add to what you said earlier?

  Ms Lacey: I think it comes back to the point you made in terms of what our brand offer is about and I think within the terms of the John Lewis Partnership and John Lewis and Waitrose brands it is about offering quality products which offer value for money. I think it is all sorts of ethical issues. Our customers will have an expectation that as a business we make all those sorts of considerations, so there is much greater interest in terms of where our products come from, how they have been sourced, the relationships we have with our suppliers, what materials they contain and also in terms of providing good information about what they are actually buying and how they can get the best and the most from that product.

  Chairman: Okay. We are going to move on. We have got a lot more questions to ask and it probably will mean that not each one of you will have the opportunity to comment on the question simply because, with no disrespect, we could be here all afternoon. So if you are not asked to respond it is not because we do not want to know what you say, but those who are asking the questions will have decided who, in their judgment, might be the most appropriate person to answer them.



 
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