Day 061 - 05 Dec 94 - Page 15

     
     1        A.  It is probably, it is a -- can I finish?
     2
     3   Q.   Yes.
     4        A.  It is a sum of many constituent parts.
     5
     6   Q.   Yes, but we are talking about pennies, are we not?
     7        A.  If could finish, please?  It is the sum of many
     8        constituent parts that actually controls the cost from a
     9        supplier to a buyer.  It is not the sum of one part exactly
    10        balancing out one another; it is many, many parts.
    11
    12   MR. JUSTICE BELL:  Presumably, it is not necessarily a matter of
    13        cost at all.  It may be that it is a question of bargaining
    14        between the two sides, so the supplier's costs may go up
    15        and the price may stay the same; it may even in some
    16        circumstances drop, I suppose, if McDonald's is making a
    17        tough deal?
    18        A.  That is correct, my Lord, but may be not in the context
    19        that you said it.  McDonald's, because of its increasing
    20        number of restaurants each year and its increasing volume
         each year, is actually buying more from the suppliers every
    22        year and, therefore, their overhead content of their cost
    23        comes down.  Another element may go up but the overhead
    24        content comes down.  It does not necessarily mean that if
    25        recycled material costs more or less that there would be a
    26        price change.
    27
    28   MR. MORRIS:  When Perseco took over as an intermediary, I think
    29        you said, something like that, between you and your
    30        suppliers as regards policies, seeking out improved
    31        policies, in the company, yes, recycled paper, is that
    32        correct -- you said Perseco was established and from that
    33        moment on there was a much more systematic approach to the
    34        use of recycled paper?
    35        A.  Perseco provides a complete packaging/purchasing
    36        service to McDonald's.
    37
    38   Q.   That is right.
    39        A.  That is their role.
    40
    Q.   So the first thing they would have done, would they not,
    42        would be to institute an audit to check what the recycled
    43        content was, what it could be, what the price
    44        considerations would be; is that a fact?
    45        A.  It would not be the first thing they would have been,
    46        no.
    47
    48   Q.   It might have been the third thing, but that would have
    49        been one of the major things they did in the early months,
    50        would it not? 
    51        A.  No, it would not.  Perseco had to establish themselves, 
    52        first of all, to verify that the suppliers we had were 
    53        correct.  They then to establish a quality assurance
    54        department and, ultimately, they would have got into other
    55        projects, one of which would have been recycling or
    56        recycled content.
    57
    58   Q.   So when they got into the recycling project, they would
    59        have identified what the recycled content was of the paper
    60        at that time, would they not?