Select Committee on Environment, Food and Rural Affairs Minutes of Evidence

Dixons Group plc Note for Meeting on 18 February 2002 with Rt Hon Michael Meacher, MP, Minister of State (Environment)


  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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