Examination of Witnesses (Questions 480-499)
Ms Jane Bickerstaffe, Mr Stephen Carter, Dr Robert
Chilton and Dr Forbes McDougall
4 MARCH 2008
Q480 Baroness Platt of Writtle: But,
of course, with aluminium, which is infinitely recyclable, certainly
our local authority does it on a magnetic basis, the steel from
the aluminium.
Dr Chilton: You can get it out if you have got
the technology.
Mr Carter: In terms of material choice, as a
packaging technologist there is one golden rule and that is: choose
a material that does the job. Certain materials are not suitable
for packaging certain kinds of products and in many cases we have
quite a limited number of optimal choices of material. It would
be crazy to choose the wrong material because it was more recyclable.
Q481 Chairman: But, Mr Carter, that
may be, with respect, okay for your industry and perhaps I have
to ask the others, but where there are global supply chains, where
you do not control the packaging of some of the items that go
into the ultimate box, as it were, that must be a problem. The
other one is, to what extent are you sensitive to consumer demands?
Does the "40 to 30" on the washing machine, which is
something that some of us have stumbled over and now know it saves
us money, come from you or does it come from the consumer, do
you think? Where do these sorts of pressures come from, the one
you cannot control and the other who is setting the agenda?
Mr Carter: Ultimately we are a consumer-led
business, so we will make products for the consumer to meet their
wishes. One of the challenges we have, and I think it will be
shared by my colleague from Proctor & Gamble, is that we need
to educate the consumer in some ways because the general perception
of packaging does not always match the technical reality.
Q482 Lord May of Oxford: In some
ways this is a comment. The notion that being a consumer industry
means you serve the wishes of the consumer is a bit tendentious,
because you are trying to shape the consumer's wishes more often
than not. SUVs would be a perfect example. Nobody wanted SUVs;
they were shaped to evade the legislation on better fuel efficiency
in the States, but the industry shaped consumer demand for a ludicrous
car. What do you say to that?
Mr Carter: I agree that there is a risk that
that can happen.
Q483 Lord May of Oxford: Risk of
that happening? It is part of the business.
Mr Carter: Yes, but not in every instance in
every business is that the case. Certainly the "Turn to 30"
campaign that Proctor & Gamble have introduced is both designed
by the consumer and meets Proctor & Gamble's sustainability
objectives, just like Unilever's concentration of laundry detergent.
Halving the size almost halves the amount of packaging, takes
lorries off the road, and again there is a consumer desire for
that to happen but also it meets our sustainability objectives
because we want to reduce our footprint.
Q484 Chairman: Just on this point,
the laudable "40 to 30" in my mind is somewhat undermined
by the fact that the little cubes of detergent that you then put
in the washing come in packaging which seems to me horrendously
overdone. I just wonder if my "40 to 30" move is merely
compensating for the cost of the packaging that the damn bits
of soap powder come in.
Dr McDougall: I will respond to that. Again,
with this lifecycle approach, we took what we used to call the
fluffy powders, which was when our laundry boxes were this size
and concentrated them, and what we found across the industry was
that consumers do not dose according to how dirty the clothes
are, so that drove the move to the tablets. The reason the tablets
are wrapped is to prevent, when you open your box, moisture getting
into the tablet and breaking it down. The data that we have shows
that the very tiny amount of foil wrap that goes round it is still
beneficial when you compare it to the wastage that you would have
with uncontrolled powder dosing.
Q485 Chairman: And the cardboard
box?
Dr McDougall: The cardboard is recycled cardboard.
Q486 Chairman: If you can get the
consumer to recycle it.
Dr McDougall: No, no. I mean a lot of the cardboard
in the UK market contains a high percentage of recycled material.
Chairman: Sorry—that is one of my hobby-horses!
Q487 Lord Haskel: Having said all
of this and having learnt what you have told us about CAD engineering
and lifecycle assessment, how much weight does this carry in the
final decision about whether you are going to market a product
or not?
Dr McDougall: It is definitely involved in the
decision. What you often see with this element of design is that
certainly the computer-aided design helps optimise the amount
of material that goes into that packaging or the product. If you
optimise that you optimise the cost, so you are designing out
excess material, and the same for the lifecycle: you understand
where to focus. Although we are a big company we have limited
resources on where to focus energy and R&D money, so these
studies allow us to identify where we should put the focus or
energy.
Q488 Lord Haskel: There are many
other aspects that go into the final decision. How much weight
does eliminating waste carry when the company makes the final
decision about whether it is going to make and market a product
or not?
Dr McDougall: With the rise of sustainability
up the agenda globally, waste is higher up the agenda in the big
multinational companies now than it has ever been.
Q489 Lord May of Oxford: I should
begin narcissistically by declaring my interest as a Fellow of
the Institute of Chemical Engineers. They have produced a list
of ways to assess the amount of material used as part of their
sustainability guides, things like what are the total raw materials
used per kilogram of end product or what is the fraction of raw
materials recycled within a company and so on? I wonder how widely
these sorts of things are used in Unilever, Proctor & Gamble
and more generally. If they are not used, why not? If they are
used, what are the typical figures which emerge?
Dr McDougall: We do use a wide range of metrics.
We manufacture over 100 different product lines, so 100 different
brands, for example. Each of those brands will have a range of
different multiples, whether it is small bottles, medium sized
bottles or big bottles. We compile and publish data to cover the
whole of our business. We have what we call a sustainability report,
which is a separate report from our financial report. You ask
for figures. For 2006/2007 we converted 95.72 per cent of all
raw materials to final product, so it is more of a description
of transition. Of that remaining piece 2.36 per cent was recycled,
so overall a relatively small amount goes to waste because waste
is money.
Mr Carter: Manufacturers of branded goods have
to use these measures to sell to retailers like Wal-Mart in the
USA, for example, and it is coming to the UK. Wal-Mart/ASDA have
a scorecard where the grams of packaging per millilitre of contents
is one of the key indicators that you need to declare to them,
so everyone who sells through ASDA in the UK will be collecting
data on this measure. Having said that, from a Unilever perspective
we have a concern about using simple measures. One of our concerns
with using a grams of packaging per ml of content measure is that
it encourages large packs because large packs are much more efficient
on a gram per packaging per ml of product basis. That then clashes
with some of the other issues. If we introduce larger and larger
food packs we create more and more food waste. We may also cause
an obesity problem and that is not what a responsible food manufacturer
should be doing. The demographics of the western world at the
moment are moving to smaller and smaller households, so we are
being driven in a direction where potentially our grams of packaging
per ml of content is likely to be moving the wrong way, not because
we do not want to reduce the amount of packaging but because other
factors are influencing that. The other thing I would say about
grams of packaging per ml of product is that it gives no credit
for concentration of a formula, like a liquid detergent. If instead
you use grams of packaging per consumer usage then you get full
benefit for concentrating down the formulation inside. Unilever
chooses to use some different measures like grams of packaging
per consumer usage or grams of packaging per portion for its food
packaging.
Q490 Chairman: Do you use the same
criteria or metrics across all of your plants internationally
or are there variations caused by externally imposed legislation?
I am not talking about emissions but the kinds of things we have
been talking about. If you have got a plant in Malaysia and a
plant in the US, say, in California, and one in the UK, would
they be operating to the same standards, or seeking to achieve
the same standards; let us put it like that?
Dr McDougall: All our plants operate to the
same environmental standards wherever they are in the world irrespective
of the legislation in the country they are operating in. We work
to the highest environmental standard. Plants manufacturing the
same products will use the same metrics so we can identify the
good performing plants and share their best practice and we can
also identify the not so good performing plants and do something
about them.
Q491 Chairman: Is it the same for
Unilever?
Mr Carter: Yes, the same for us.
Q492 Lord May of Oxford: Very often
improving the efficiency of material used is a win-win because
it saves you money and it is more sustainable, but are there examples
where there is a tension between the two, where improving the
efficiency of material use is an additional cost and you have
to weigh the costs to you against the benefit to the environment?
Mr Carter: There are not many examples that
spring to mind. Usually, if we use less material it is at lower
cost. Perhaps the one example I can give is in terms of comparing
a solid plastic bottle with a much lighter weight laminate pouch.
Q493 Lord May of Oxford: Exactly.
It is a different material that is involved.
Mr Carter: Yes. The pouch is much cheaper to
buy because there is less material in it but the filling technology
to fill these packaging items on a production line is more limited
and slower for a pouch. Typically that manufacturer can fill bottles
and cans at very high speeds whereas pouches are slower, so you
can get into a situation where the packaging cost is lower but
the filling cost because you have to run your production lines
at much lower speed is higher, so there are instances potentially
where what you have just described can occur.
Dr McDougall: There is also an opportunity where
country-specific legislation around packaging can push you in
one direction and not be the same or not be pushing in the same
direction in another country, and when the European packaging
legislation was rolled out across Europe it was implemented differently
in every single country. In some countries the prices for different
types of packaging on the market are different, so you could theoretically,
if you were a producer in Germany, choose to have your packaging
in one format that would save you money perhaps in Germany but
it would not be an optimum material in another country as far
as how much you pay is concerned.
Q494 Lord Howie of Troon: So you
use different methods of packaging in different countries, do
you?
Dr McDougall: No. As a global producer we cannot
because of the complexity. We have to pick the best packaging
for the product and we have to pay the different tariffs for packaging
recovery across Europe.
Q495 Lord Methuen: It has been suggested
that a higher level of taxation should be applied to the use of
virgin raw materials. Do you think this would be effective in
incentivising businesses to use raw materials more conservatively
and efficiently?
Ms Bickerstaffe: I think that is a single issue
approach again because though you use materials you also use energy
to process and convert them, and just putting a tax on one part
of an equation is always going to have unintended side effects.
For example, corrugated boxes, and we all know they contain a
very high proportion of recycled material already, in order to
be sustainable need to include virgin fibres each time; otherwise
they just turn into pulp and fall apart. If you impose a tax just
on one part of that it does not seem like an efficient way of
incentivising it. There are other things that push the choice
rather than a tax.
Q496 Baroness Sharp of Guildford:
Moving on to the Courtauld Commitment, this seems to have proved
quite successful at reducing unnecessary packaging because it
has encouraged retailers to work with the Government on a voluntary
basis. What do you see as being the major achievements or limitations
of that commitment and what further work needs to be done either
with the Government or with retailers and consumers to reduce
packaging waste further?
Ms Bickerstaffe: What the Courtauld Commitment
has done is bring together a number of initiatives which were
happening to some extent anyway. Lightweighting, because of all
the commercial drivers, let alone the environmental ones, has
been going on for years and years. It has been successful in pulling
those together and probably has given a high profile to it because
there has been a lot of publicity to support that. It has probably
not though addressed the areas of consumer concerns about excessive
packaging. We would argue that 97 per cent of stuff on the market
is not excessively packaged. Sometimes it is not obvious to us
as shoppers why it is packaged the way it is. To get goods through
the supply chain we think the majority of packaging is there for
a good purpose and is doing a good job, but all of us know things
that irritate us. We pick up something that has more layers of
material or is a huge box with a tiny product in it, and the Courtauld
Commitment has not really addressed those concerns. Those are
the things that we would like to see addressed because the consumer
needs just one example of excessive packaging to jump from the
particular and say all packaging is a waste of resources. It is
a very bad image for the industry as a whole. How we tackle that
is more difficult. You do not need something that is going to
address 100 per cent of packaging. You need something that just
identifies that 3 per cent, if you like, those exceptions, and
does something about those, we think some sort of multi-stakeholder
group that could do some work, see where those areas are—we
could probably decide them in the room now; we know where these
irritating areas are—and then help provide technical advice
to the companies who are doing it so that they can make improvements.
Q497 Baroness Sharp of Guildford:
It has been suggested that this has been relatively successful
because in a sense the Government has got closer to you. It has
become a facilitator rather than just a more distant regulator,
so do you feel that the Government can provide a more positive
role here in terms of getting you together—as you say, something
like polystyrene peas or something like that are an incredibly
irritating form of packaging when you get them—so that you
can identify which are the things that irritate the consumers
and work with that?
Ms Bickerstaffe: I think we do know but we need
to make some careful decisions over what is packaging for luxury
products, for example, and what is truly excessive. Luxury is
always a subjective judgment. It would be silly to outlaw things
that are gifts, but things that are genuinely excessive we do
need to tackle. As I say, they are a tiny per cent; they are the
exception. We do not need a sledgehammer to approach them. We
need something that is much more simple. We already have a legal
requirement that companies must not excessively package their
products. It is called the Essential Requirements Regulation and
it is enforced by trading standards officers. We think that some
sort of stakeholder body could help support them and act as a
sounding board for them in this area.
Q498 Baroness Sharp of Guildford:
How about laminate materials? There is now a way of recycling
Tetrapaks but it is quite an expensive process, but there are
other laminates which are more difficult, I gather, to recycle.
Should the Government and industry address the potential conflict
here between waste reduction and recyclability?
Ms Bickerstaffe: No, because I think companies
sort that out for themselves. People do not make packaging just
for itself. They are using the packaging, as Steph was saying,
to get their goods from A to B in the most effective way and then
get the materials that come out as waste at the end recovered
in the most effective way. Sometimes laminates are the most effective,
sometimes they will allow you to have far fewer lorries on the
road delivering goods because they are such a tiny amount of material,
so you have got your plus environmental points at that part of
the supply chain. I know the public do not see that, but that
is good for the environment. The fact that it cannot be recycled
but you can recover energy from it does not detract from being
able to use it.
Q499 Baroness Sharp of Guildford:
What proportion of collected waste do you think now goes to energy
recovery?
Ms Bickerstaffe: In the UK 11 per cent of municipal
solid waste but the target is for 25 per cent of municipal solid
waste by 2020, and it looks like we are on target for that.
Dr McDougall: I would like to add to and support
Ms Bickerstaffe's point there. I think that we need to have a
balance between recycling where it is economically and environmentally
beneficial and not focus on all packaging material having to be
recycled. There will be a balance in the spectrum of materials
where at some point we will have to say, "No, these very
small yoghurt pots", for example, "to collect and recycle
them is really just not worth the effort. We will be much better
burning them and taking the energy back". Again, it is this
big picture piece, to make that decision.
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