A European Union directive passed recently requires white good manufacturers to take responsibility for the safe disposal of their products. This is clearly good news for the environment. Some might argue that it's equally bad news for manufacturers although Electrolux wouldn't agree. However, as Peter Lusty, Chief Executive, Strategix, explains, the directive does create logistical problems that only intelligent use of the distribution channel can solve.

The directive passed by the EU last month makes manufacturers responsible for recycling their own electrical and electronic products. Green activists and others concerned about the future of the planet will take heart from this as, while these kind of goods account for only four per cent of household waste, this number is growing fast. It is also a major source of organic pollutants and heavy metals. While the new law obliges local authorities to set up collection facilities (common in Japan for many years now), the removal, processing and recycling of the waste falls to the manufacturer.

Along with recycling responsibilities come the associated costs. These must be paid for by the manufacturers and will clearly be passed on to the end consumer. Initially, producers will be able to add an individual charge to new products to cover these costs but eventually, these charges must be absorbed into the purchase price of the product. Usually, any government intervention that requires prices to go up creates an outcry among the manufacturers. This time, however, the move has been welcomed.

Innovative manufacturers like Electrolux realise that this may be a source of competitive advantage. Since the charges apply across the board, individual producers can benefit by creating products that are easier and cheaper to recycle. This will lead to more competitive product pricing. Also, making manufacturers individually responsible for their own goods should promote innovation and drive down the cost of meeting environmental standards.

At first glance, one might imagine that manufacturers would organise among themselves for shared disposal facilities - a kind of grand socialist experiment with recycling as its central theme. As attractive as this is, it is unlikely to happen. Those manufacturers who have streamlined the recycling process will be unwilling to share the costs of those that have not.

So, that all sounds good in theory, but the practical consequences of the directive is that manufacturers are faced, in effect, with product returns that ultimately will be 100 per cent! Product returns are a particularly thorny issue and returns on this scale is a daunting task. Liaison with local authorities, confirmation that the goods were produced by an individual manufacturer, transportation of the goods to the recycling plant - all of this requires a detailed level of local knowledge. This is something that most manufacturers will be unwilling - and largely unable - to take on.

Step forward the distributor. This is exactly the kind of responsibility that they could be shouldering on behalf of manufacturers and one that plays to their core strengths - distribution and understanding of local markets. At a time when many producers are looking to 'disintermediate' elements from the supply chain by moving to a direct relationship with the end-user, this is an excellent opportunity for distributors to restate their value.

Of course, this is easier said than done. As with any complex logistical procedure, the recycling process will be more easily carried out if it can be automated. Many distributors have already invested in sophisticated supply chain management systems in order to provide, for example, sales analysis and forecasting information to manufacturers, as well as assisting them to manage returns and improve workflow. These companies will be much better able to step up to the challenge of complying with the new directive. Those without such systems will need to think hard about how they can continue to add value to the supply chain, especially now that the EU has raised the bar in terms of the downstream value-add that manufacturers will seek from their supply chain partners.

Overall, I believe that we should all take heart from the new EU directive. It's good news for the manufacturers as their recycling innovations will ultimately be rewarded. It's good news for consumers who will find that disposing of unwanted white goods will be much easier. And it's clearly good news for the planet that electric and electronic products will not simply be left to rot in the countryside or in public dumps. However, its impact on distributors is an open question. I'd like to think that the majority will look on the directive as an opportunity. If that's the case, then it will be good news for them too.