Valpak Retail WEEE Services Ltd (Valpak) has been re-appointed to operate the Distributor Take Back Scheme (DTS) under the WEEE regulations for the next three year phase (phase two), which lasts from January 2010 to December 2012.

The DTS is the mechanism by which distributors of electrical and electronic equipment (EEE) meet the requirement to contribute towards the collection of waste electrical and electronic equipment (WEEE) from customers as the alternative to taking back of unwanted items themselves. In the main, the majority of distributors that join the DTS would describe themselves as 'retailers'.

Next steps
Valpak will now develop systems to operate the DTS in phase two and expects to be in a position to re-register existing members from late November 2009. All members will be contacted once the re-registration period begins.

Background
The first three year phase of the DTS will come to an end on the 31st December 2009, with a new one starting on the 1st January 2010. Before the end of 2009, distributors should decide whether to rejoin the DTS for this second three year period. Membership of the DTS provides distributors the ability to opt-out of the legal requirement to take back waste from customers themselves. The requirements apply to all distributors of electrical equipment to household end-users, irrespective of size and method of sale.

Distributors who are members of the DTS are able to advise customers to take their WEEE to a Local Authority Waste Recycling centre free of charge and will not need to collect any of their customer's waste if they don't want to.

Rejoining the DTS in phase two - fees
Because most of the initial set up costs have been met, the cost of rejoining the DTS in phase two will be significantly lower than was charged to join in phase one. The total fees for any member that rejoins will not exceed 37.5% of those paid in phase one for a similar amount of EEE sold, and in many cases will be significantly lower (as low as 25%). Fees for members of the DTS in phase one that are re-joining in phase two will be known as 'retention fees'.

Retention fees - Distributors for whom the total value of EEE put onto the market is less than £1.5m per annum
The retention fees for re-joining the DTS will be as described below:

* Value of electrical and electronic equipment in the period 1 October 2008 to 30 September 2009.
** The total cost includes a retention fee that is passed onto Local Authorities to assist in the maintenance of CA site DCFs and an operational fee to Valpak to cover the costs of running the DTS. In return for this fee, Valpak are responsible for the registration of members and collection of funds, registration (and maintenance of the register) of the network of WEEE designated collection facilities, monitoring of how collected funding is spent by Local Authorities and Councils, provision of information to the Government and Enforcement Agencies and assistance to members relating to the Consumer Information Obligation. Total cost exclusive of VAT and any credit card fees.

Retention Fees - Distributors for whom the total value of EEE put onto the market is more than £1.5m per annum
Distributors will fall into 'band A' of the DTS in phase two if the EEE that they sold in the period 1 October 2008 to 30 September 2009 had a value in excess of £1.5m. The retention fee payable by these distributors will then be dependant on the exact amount of EEE sold in that period. These 'band A' distributors will therefore be required to provide information that shows the number of units sold by each of the WEEE categories between 1 October 2008 and 30 September 2009 so that their fees can be calculated.

The total retention fees payable by all members in 'band A' will be £1.72m over phase two of the DTS, assuming that all members from phase one rejoin. This compares to a total of £8.8m collected from 'band A' distributors in phase one of the DTS. This means that, in the event that sales figures are the same as they were at the beginning of phase one, the retention fees charged to any 'band A' member will be less than 20% of those charged previously. In addition, 'band A' members will be required to pay an operating fee to Valpak equal to 14.75% of the retention fee. The total fees for re-joining the DTS will therefore be equal to 22.5% of those charged in phase one.

It should also be noted that the fees payable will be proportional to total market share and not a fixed cost split just amongst DTS members. This means that, if some members in phase one do not rejoin the DTS, the total amount collected from distributors in band A will be less than those figures highlighted above. This in turn means that members of the DTS in phase two will not be required to make up any shortfall that arises as a result of distributors that do not rejoin in phase two.

Take back of WEEE
If any distributor decides against joining the DTS then they are legally required to provide for return of WEEE from all customers, free of charge, on supply of equivalent equipment. They will also be required to make sure that they have the necessary waste licences, that items received are passed on for recycling and that necessary records are maintained. This does not just apply to large goods that are delivered to a customer's home, but also to all smaller equipment that is sold in store.

It should be noted that no business, whether a DTS member or not, will be allowed free access to council waste sites for disposal of waste as a matter of course.

New members
Joining fees for distributors that are new to the DTS in phase two will be higher than the retention fees paid by existing members of the DTS. The fee structure is designed to appreciate the front loaded nature of costs to DTS members in phase one, whereby the funding provided thus far assisted in meeting the high 'start up' cost of developing a network of collection facilities. It would therefore be unfair to allow a new registrant low cost access to the DTS during this second phase when facilities have been established at the cost of other distributors.

Fees for distributors that are new to market (in terms of electronics retailing) will be comparable to those paid by entrants at the beginning of phase one. Charges will be between the retention fees payable by existing members and the fees paid by new applicants to the DTS who chose not to participate during phase one.

Decision making process
If you do not wish to offer free collection facilities for all products that are being 'replaced' by goods that you sell (for example you have no desire or physically cannot store unwanted goods at your premises or have an internet operation) then you probably need to stay in, or join, the DTS.

Valpak will now develop systems to operate the DTS in phase two and expect to be in a position to re-register existing members from late November 2009. All members will be contacted as soon as the re-registration period begins.

For more information on UK's WEEE collection network, please click here.