Examination of Witnesses (Question Numbers
260-279)
MR JULIAN
WALKER-PALIN,
MS GEMMA
LACEY, MR
ARTHUR SAYER
AND MR
RICHARD WHITEFIELD
19 NOVEMBER 2008
Q260 Miss McIntosh: I think, Mr Walker-Palin,
you said that it was the level of the landfill tax which allowed
you to make the business case for developing the disposal policies
that you have. Are there any other main drivers for your company's
policies on waste?
Mr Walker-Palin: Yes. We as a
business in terms of Wal-Mart globally are trying to make ourselves
more sustainable, so one of the drivers is reducing the amount
of waste and therefore the carbon emissions from that waste. That
is why we invested something like 4 to £5 million in the
ASDA service centre network to allow us to backhaul the waste
without creating additional carbon with lorry units on the road.
So for us it is about taking inefficiencies out of our business.
On a landfill escalator it helps on that one, but also it is about
doing the right thing by the planet, and something like waste
we have not seen a conflict between the two, actually they work
very well together.
Q261 Miss McIntosh: That is good.
I think you mentioned, Ms Lacey, about the customers expecting
a certain environmental responsibility. You are a partnership.
Do your employees encourage you to take action, or do they expect
you to take action on waste?
Mr Sayer: Yes, I do, and I was
going to mention that because there is an expectation from our
customers in terms of the reputation we have. They are expecting
us to do certain things. We are a co-owned business, as you correctly
imply. We have got 69,000 partners or employees and because it
is their business there is a pressure from them every day to be
seeing their business doing the right thing as well. So it is
a combination of those factors and, yes, the legislation with
landfill tax which actually drives action.
Q262 Miss McIntosh: Mr Walker-Palin,
just on this point, would stronger regulation banning certain
waste from landfill or imposing high national recycling targets
drive your company actually faster?
Mr Walker-Palin: I do not think
it would drive us faster because the speed we are moving at is
incredible in terms of zero waste to landfill by the end of 2010,
but I think it would be a helpful marker to the whole market on
moving the whole industry forwards, yes.
Q263 Miss McIntosh: Mr Whitefield,
you have obviously got a very impressive record in your company.
What is preventing other companies of your size achieving your
rate of recycling?
Mr Whitefield: I think it is time
with a lot of them. I think the business case for small engineering
firms is getting their product out of the door and unless there
is a huge incentive on it—I mean, with the amount of waste
that we have got on the product that is going through it makes
commonsense for us to do the actions that we are doing, but for
a lot of people it is actually just finding the time, their own
resources and time. If you have got a manager then, you know,
he is looking at what he is getting out the door really. If there
is a financial impact, then obviously they would take that on
board, but generally it is not that significant and in what they
are doing their time is better put to other things really.
Q264 Miss McIntosh: So you do not
get the same impetus from the employees, perhaps, with larger
companies?
Mr Whitefield: Not at all. It
is probably harder work with our employees to get them to recognise
our waste streams and use those.
Q265 David Taylor: Mr Whitefield,
you are one of WRAP's star performers, but how crucial to your
undoubted success has been any advice programmes they may have
been able to provide?
Mr Whitefield: I think advice
programmes are useful and it enables you to understand that you
are going in the right direction and where you are going. It is
very difficult to benchmark a company like ours against other
companies because of the diversities. I think comparing it with
other engineering initiatives, MAS have come in and worked very
well with engineering companies on actual workshops and getting
things done. What I tend to find on the environmental side, because
there is lots of advice, every body will tell you to turn the
lights off, every piece of paper you pick up tells you that you
can do this and you can do that, and it is all commonsense and
I am sure everybody in our line of business understands that and
knows that. It is actually putting the systems in place and having
the time to deal with that. I think there is a lot of duplicated
advice around and some of that money, that time and effort could
actually be put into practical solutions. There is a lot of things
that we face in our company, how we deal with wood. Is the wood
dirty? Can it be reused? Can it go to landfill? I am sure there
are hundreds and thousands of companies having the same problems,
yet trying to find the solutions is so difficult sometimes. You
could almost do with some help on that, for somebody to come along
and say, "This is the way to do it."
Q266 David Taylor: You may be aware
that WRAP does face some cuts in central funding?
Mr Whitefield: Yes.
Q267 David Taylor: It sounds an obvious
question, but I will ask it anyway. How difficult do you think
it will be for other companies to follow the Brecknell Willis
route with a shrunken WRAP, with less advice or support services
available to them?
Mr Whitefield: It depends how
much they are aware and how much they are involved with it. I
think companies can get on on their own very well. We have a couple
of local groups where production managers and directors get together
and talk about our issues. One such issue we are having in one
of our groups at the moment, the manufacturing south-west group,
is talking about environmental issues and sharing those thoughts.
So I think it actually works a lot better where you have got local
groups of manufacturers and work with those rather than the individual
company so that you have got a common goal.
Q268 David Taylor: Can I broaden
the question to link into the Waste Strategy's declared objective
of widening the active participation of businesses, including
and indeed especially retailers? I wonder what support, say, JLP
have received from Defra funded programmes, and if you have received
that support how do you rate it? Then I will put the same question
to ASDA.
Ms Lacey: The Waste Resources
Action Programme, as you mentioned, is one organisation we have
been closely involved with and we have been working with them
both from a packaging perspective as part of the Courtauld Commitment
in terms of identifying opportunities within our own business
for packaging optimisation and obviously advice and guidance on
that area. Another area in which I think WRAP has been particularly
good is in terms of the whole food waste debate and pulling together
all the information out there, because it is a huge topic, and
actually pulling that into a sort of concise report which provides
a good steer in terms of actually what the issues are and what
the priorities should be for us as a business in terms of where
we can focus our effort, not just in terms of managing food waste
from our own operations in terms of what we generate and how we
can reduce that but also in terms of the consumer communications
and also employee communications perspective. I think through
the support of a campaign like "Love food, hate waste"
it enables us to collectively campaign on a particular issue and
obviously you have got the support and the weight behind it from
WRAP and Government but also collective action across retailers.
Q269 David Taylor: ASDA, what support
do you have from either Defra or indeed Defra funded programmes?
Mr Walker-Palin: I would not disagree
fundamentally with what my colleague from the John Lewis Partnership
said. A point I would make about Defra is that they have been
very open and receptive to new ideas and to supporting us in our
thinking, and we certainly thank them for that. In terms of WRAP,
I think it would be a shame potentially if they were to lose funding
because they have done a lot of work in this sector. I would not
underestimate the Courtauld Commitment in terms of bringing together
like minded people to share expertise with WRAP at the centre
of that to help then stimulate the debate and share that knowledge.
One of the things WRAP is able to do that we cannot get together
and do as retailers is that we cannot get together under competition
rules and have detailed discussions about what we are going to
do on specific policies generally, whereas we can feed into WRAP
and then WRAP can pull that out as policy advice. I think that
is really useful.
Q270 David Taylor: Briefly, ASDA
Wal-Mart is an international company. Are you able to draw on
best practice ideas from the USA in what you are doing, or are
you given fairly free rein from the international HQ, as it were?
Mr Walker-Palin: We work very
closely with Wal-Mart on all aspects of our sustainability. I
have personally spent probably about a third of my time on global
issues with Wal-Mart and about two-thirds on ASDA issues, and
certainly if you look at something like packaging
Wal-Mart is focusing on branded suppliers, so
they are putting a good clear steer onto the branded supplier
market around what is expected from them, which links up with
the work we are doing on our private label products. They have
also created useful tools, one prime example being a packaging
score card, which is something they worked out a couple of years
ago and we are about to roll it out in the UK next year, which
is a tool for our suppliers to tell us exactly how sustainable
the packaging is. Then we use that tool to give to our buyers
so they can make buying decisions based on the sustainability
of that packaging. That initiative came directly from the US.
Q271 David Taylor: Staying with you
on my next question, you said a moment or two ago there were insufficient
facilities for anaerobic digestion and you would like to see more.
Are there any other infrastructure gaps or weaknesses you can
identify which would help increase the recycling and minimisation
of waste, either within your own company or on a broader scale?
Mr Walker-Palin: I think the biggest
gap, to touch on what I said earlier, is around helping customers
to recycle more. If you look at the "bring bank" facilities
in our stores being serviced by local authorities, I think you
have the same issue where customers want to recycle more. They
want to recycle more at kerbside level, or they want to recycle
more at store level. Generally both are serviced by the same local
authority and we are really passionate, which is why we work very
hard with the Packing Recycling Action Group to try and come up
with solutions to that and to try and be part of the solution
rather than part of the problem. I think any work which can be
done on developing a standardised number of materials which are
collected nationwide for recycling would be very, very helpful.
Immediately then in one measure you could communicate nationally
around what you can and cannot recycle and how you need to put
it out for collection. We all now have a metric on our pack; we
have a logo on the back saying, "This is what it is made
of," and then using that data how easy it is to recycle that
pack. What we are aiming towards is to get more uniformity of
these materials for recycling, to then use that label to make
it very easy for customers to then recycle it. That is in terms
of our customer waste. In terms of our own operational waste,
the big gap at the moment is around anaerobic digestion facilities,
in particular anaerobic digestion facilities which can de-package
a product at front end. At the moment there is only one facility
in Bedford which does that and we are going to need many more
of those facilities around the country. What we would also like
to see is more investment in some of the new technology coming
forward like gasification or pyrolysis where you can take biodegradable
waste with the packaging and turn it into energy and digestate.
Certainly Wal-Mart is doing a lot of work on bringing forward
models in the US on that and if feels to us like that is probably
the future. You have got anaerobic digestion immediately and then
you have got the next stage, and we would be really keen on trying
to develop that next stage and Government funding, I guess, would
help a lot with getting the market to develop that.
Chairman: Just before we leave that point,
David Drew wanted to come in, so can you work together on this
anaerobic digestion?
Q272 Mr Drew: Could I just ask you—and
I do not think it is a provocative question—how much does
the wider waste debate matter to you? Clearly there is this issue
which is concerning me in my area about moving from landfill to
energy from waste, ie incineration. Does it matter to you that
there is a wider context to waste and do your customers say, "Well,
you know, if this is going for incineration then I want to know
about it"? Is that something you engage with?
Mr Walker-Palin: I think from
ASDA's perspective we engage with minimising waste because it
is about our operational model. So our operational model is around
everyday low cost gives us everyday low price. Waste is a cost
within our business. In terms of our customers, they expect us
then to minimise the waste. However, I have not had any conversation
with them around whether energy from waste versus recycling is
a good or bad thing. My gut fear would be that people generally
think recycling is better but they also probably think around,
you know, old-style burning facilities rather than some of the
new style combined heat and power and energy from waste facilities.
I think there is still a perception there that is probably a few
years old.
Q273 Mr Drew: Given the amount of
consumer interest there has been in food per se, is waste something
you think you should be engaged in directly with your customer
base—and perhaps you might want to say something about that—or
is this just too artificial?
Mr Sayer: In the Waitrose branches
where we have been doing anaerobic digestion for the last few
months we have actually used local publicity in those branches
to tell the customers what we are doing in terms that the food
waste is actually producing electricity. So we are engaging with
them and telling them what we are doing as best we can. I think
there is an expectation from the customers that we will be doing
the right thing. Whether they perceive that right thing to be
anaerobic digestion or avoiding landfill, I am not sure.
Q274 Miss McIntosh: On the trials
that John Lewis has been doing, do you think customers understand
the importance of reducing food waste? Do you think we are well
enough informed as customers?
Mr Sayer: We have been informing
our customers and giving them some advice with portion control
and things like that to actually educate them, and on food storage
and the best way to do that. We have advice that we have given
out on that. I think it is true to say it is never enough because
obviously there is a lot of food waste in the country at the moment.
Q275 Chairman: So I suppose you have
a little label saying, "If the lights go out, you've got
it right!"
Ms Lacey: Certainly in terms of
the research we have done with our consumers, packaging and waste
recycling is top of their agenda amongst all the broader CSR issues
although I think from the food waste perspective this is a lesser
priority. They are probably more focused on the packaging side
of things, but I think it is more about wanting to understand
things around portion control and also linked in, I guess, with
the packaging, how we can we get the right balance in terms of
making sure the packaging is right, in terms of reducing that
from an environmental materials perspective, but also making sure
that any packaging we do use does not have an impact on food wastage
as well, so it is looking at more innovative ways of using that
packaging too.
Q276 Miss McIntosh: Does ASDA have
a similar policy? Do you think, being brutally frank and provocative,
are we doing it to move food off the shelves more quickly so that
if people throw out the waste at home they are going to come and
buy new products?
Mr Walker-Palin: I think it is
an interesting one and I guess one of the key elements, apart
from education—learning how to cook, learning how to store
food and all the rest of it—is around the promotional strategies
we use in our stores. We do not use "Buy one, get one free,"
that is not part of our promotional strategy. What I find really
interesting is that one of the key areas which I think is highlighted
in terms of food waste is the short coded food that you cannot
freeze, most of that being produce, fruit and vegetables, those
kinds of foods. We did a big customer panel of over 200 customers
at the beginning of this year and we said to them, "How can
we get you to eat five a day? How can we get you to eat more healthily?"
because we do know that a large number of our customers rely on
us to give them the right prices on fresh food, and that is actually
the only time they get hold of fresh food. So it concerns us,
as WRAP was saying at the time, if this food is then going into
the bin. They said to us, "We want to do more scratch cooking,
so we need more of these fruits and vegetables to cook with at
home. However, we don't have a huge amount of money spare in our
pockets so we do need you to do some promotional activity around
fruits and vegetables to make it easier for us to get the five
a day." They did say to us at the time, at the beginning
of the year, that some of our promotional strategies were leading
to them being left with food at the end of the week that they
had not been able to eat and could not freeze. So in June we changed
our entire promotional strategy for our short coded food products
and said, "What we are not going to do any more is to do
two for £2, for example, on lemons or oranges, so you get
too much of one product that you then cannot eat," and we
changed our promotional strategy to be around meal deals. So now
we say, "You can have two for £2 across the whole of
citrus and apples," for example, or across the whole of prepared
vegetables, potatoes and sweetcorn, for example, and our customers
have responded to us by saying, "That's exactly what we wanted
you to do and we're now disposing of less food, if any."
Q277 Miss McIntosh: John Lewis, you
are working on extending the anaerobic digestion plants across
the stores. Are you able to say anything about the cost benefits
of reducing food waste in this way?
Mr Sayer: It is proven in the
trials we have done to be cost neutral to us compared with the
way that we were on disposing of food waste before we had done
the anaerobic digestion trials. So we have not faced a cost penalty,
but it is cost neutral, so it is not something which precludes
us from doing it and indeed we like the solution of anaerobic
digestion. It is ticking lots of boxes in terms that it is producing
energy, it is avoiding landfill, and so I would support what my
colleague has said. Obviously, what we really want to see is a
greater proliferation of these facilities around the country because
it is a good solution for that particular waste stream.
Q278 Miss McIntosh: Have you identified
any barriers to rolling further on down and any solutions to overcoming
those barriers?
Mr Sayer: I do not think it is
barriers that we directly have faced, but for the private investors,
who obviously want to actually build these facilities, my understanding
from the position we are in is that they obviously face barriers
in terms of getting planning permissions to actually build these
plants, so anything Government can do to actually find a way through
that faster now will obviously enable these plants, hopefully,
to appear sooner rather than later.
Q279 David Taylor: We have been hearing
about ASDA's aspirational goals. Our Government here has downgraded
some goals to aspirations, but I did not realise there was a sort
of halfway house. It is good to know that and I shall certainly
be heading for the nearest ASDA store in about three or four months'
time to see if you can get the waste material down on your Easter
eggs, which seem to be perhaps the most wasteful in the product
range! For my last question I want to return to where I started,
to Mr Whitefield. The regulatory framework for the commercial
sector and the municipal sector are out of kilter, are they not,
in this area for the expectations and obligations of local authorities?
Would you think it would be a good idea—and MPs sometimes
get this from small firms—for local authorities to allow
small and medium sized enterprises—for instance very small
firms in particular often feel quite frustrated by the reaction
they get. Is that something which you think has any merit?
Mr Whitefield: I am sorry, I do
not fully understand your question.
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