Examination of Witnesses (Questions 140
MONDAY 4 MARCH 2002
140. So it has gone down?
(Ms Smith) Yes.
141. You do not know the percentage?
(Ms Smith) That is commercially sensitive. I would
be happy to write to the Committee on that issue.
Chairman: I think the Committee has noted to
wait until January to buy a new fridge.
Diana Organ: If I ask questions that you have
been asked before, because I have not been here, just stop me
and say "we have answered that one". You made the point
that buying fridges is generally done in distress and the only
time I ever bought a freezer was when I shoved a knife through
the back of my old one and something ghastly escaped and it did
Chairman: You attacked it?
142. No, I was trying to defrost it and doing
it with a carving knife in my haste. It was a few years ago, but
never mind. Why did you start the take-back policy? Why?
(Ms Smith) Largely because, and we have been doing
it for many, many years, if you deliver a fridge to people it
is a great big large bulky unit and they cannot put it in until
they have got rid of the old one, so we did that as a service
to our customers.
143. When I buy a sofa from IKEA they do not
take the old one away.
(Ms Smith) I suspect if they were in as competitive
an environment as we were they would find ways to improve their
144. Other companies did offer a take-back service,
you are in a highly competitive market for white goods with Comet,
Currys, electrical warehouses, all sorts of things like that.
Other companies also stopped their take-back policy.
(Ms Smith) That is right.
145. Did you have a chat about that that you
were all going to stop together or was it an independent decision
and Comet just happened to do it just a few days after you?
(Ms Smith) Basically we were all served by similar
contractors, not the same contractors because our local distribution
centres are in different parts of the country, but very often
where our local distribution centres overlap we are using the
same contractors to dispose of them. So we were all basically
getting services from the same contractors, and the contractors
pulled out of serving all of us at the same time, so we ended
up losing the service at the same time. We did discuss with our
rivals, which is quite unusual, "Have you got any contractors
left who are still doing this?" We basically compared notes
on "have you lost the service?", but that was as far
as it went.
(Ms Williams) One other thing is that there were a
lot of incidents where we had manufacturers who deliver on our
behalf who pulled out in advance of retailers and people like
Electrolux sent the same letter to each retailer saying they were
going to stop our take-back service.
146. So it went down the chain?
(Ms Williams) It went down the chain and they obviously
sub-contract with similar people to us.
147. On that can you help us with a little bit
of timing. I notice from your very helpful chronology that at
the back end of 2001 you formally said to the Government take-back
ends. You have indicated to us that people had notified you earlier.
When do you think the Government got the first hint that the take-back
service was about to come to an end?
(Ms Smith) The very first time we wrote to the Government
in November 2000 we indicated that the loss of the export capacity
could mean that that service would come under threat. In fact,
we did say in that very first letter in November 2000 that we
understood one electrical retailer had already taken the decision
to no longer collect such fridges and freezers. At that stage
we had already had contact from our contractors. They were the
ones who alerted us to the fact that they could not export and
at that point they were then talking about pulling out of contracts.
Chairman: So when the Government replied did
their ears prick up with this thought that something might happen
or did it just get passed by? Do not worry if you cannot find
it now, but it would be very helpful to know what their response
148. You said that usually in a competitive
environment like yours it is rare that you would talk with your
competitors but you did talk when you were asking questions about
the loss of capacity from the people that were offering you the
services. Have you had any other discussions with competitors
and others in the field about what to do to solve this problem
because you have put forward a scheme and nobody else seems to
have come forward from the High Street with any kind of scheme.
Have you had any discussions, "This is a problem for all
of us chaps, we are trying to sell the white goods"?
(Ms Smith) We have. When I say it is rare for us,
it is rare for us to discuss what is happening to us commercially
with our competitors. We do, of course, discuss things with our
competitors all the time through the British Retail Consortium.
In this situation we have all the way through talked to our competitors.
When we drew up the lead authority paper for 24 January we circulated
that through the BRC and to RETRA and Comet whom we talked to
about this issue. We basically said, "This is what we are
going to put forward, you may wish to be aware of it. This is
our `starter for ten'", for want of a better expression.
149. When you started to have discussion with
others in the industry when was that and were they relaying their
concerns to government?
(Ms Williams) One of the things we had at the BRC
was a Waste Electrical and Electronic Equipment Task Group which
was looking at the future Directive. That is an on-going forum
that takes place every couple of months. We did bring up the ODS
Regulation and the changes to hazardous waste. We invited officials
from DEFRA to come and explain to members of that committee what
this might mean to us.
150. When was that?
(Ms Williams) I think it was about August last year.
I have got some paper work.
151. Did somebody come?
(Ms Williams) Yes.
152. Did you get a good explanation from them?
(Ms Williams) Reasonable.
(Ms Williams) We had quite a discussion about all
the issues. To be honest, the retail members shared very similar
concerns at that time about it and we did go through all of those
and those people did go on to become members of the various meetings
that DEFRA set up to try and focus in on some of the issues and
move them forward.
154. If the Government when they came to that
meeting had a reasonable understanding, were you not a bit surprised
about the tardiness of subsequent action?
(Ms Williams) When we had an official come to our
first meeting it was after the final decision on whether foam
was to be included was taken, so we knew where we were at that
point. It was a question of trying to move forward and sort out
a solution after that.
155. Let me ask you about the Government's reaction.
I notice again from your very useful diary on 13 December 2000
that you were chatting to Kim Howells, the Consumer Affairs Minister.
Were you happy with Dr Howells' reaction that he gave you a recommendation
to contact another Minister, namely the Secretary of State instead
of saying, "I will get on and do something about it myself"?
(Ms Smith) To be fair, it was in the margins of a
meeting about other things because it was really about consumer
protection issues more than anything else. We did raise it but
by that time we were concerned to raise it in every forum we could
in order to try and hurry things along. We raised it with Dr Howells
in December 2000. He suggested contacting Pat Hewitt so we were,
to be honest, looking for guidance and follow-up, and we got it.
156. You got it?
(Ms Smith) We got guidance. He told us the Minister
responsible which at that stage was Patricia Hewitt who was then
in the DTI in those days.
157. Did you hear from Patricia Hewitt thereafter?
(Ms Smith) By that time there were meetings going
on between DTI and DETR which we were attending. We had raised
it with a Minister but we continued to pursue it through officials
rather than Ministers at that stage.
158. In any of these meetings did you get the
idea that the Government had understood what was about to arrive
in the way of this fridge mountain? I do not get the impression
they were terribly switched on as to what was coming.
(Ms Smith) I think it is fair to say that officials
may have felt that we were exaggerating the scale of the problem.
I do not think they recognised exactly how many fridges we collected.
159. Did you tell them the numbers you had collected?
(Ms Smith) Yes we did.