AGM Minutes 2006

'''Minutes of the forty-ninth Annual General Meeting of CONSUMERS' ASSOCIATION held on Saturday 25 November 2006 at the Royal Institute of British Architects (RIBA), 66 Portland Place, London, W1B 1 AD'''

starting at 2.15pm

PRESENT: Mr Brian Yates (Chairman), Mr Peter Vicary-Smith (Chief Executive), and some 120 Ordinary members of the Association.

 1/49 MINUTES OF THE 48TH ANNUAL GENERAL MEETING OF CONSUMERS' 

'''ASSOCIATION HELD ON 26 NOVEMBER 2005'''

The Minutes of the meeting held on 26 November 2005 were APPROVED.

2/49 CHAIRMAN'S STATEMENT

Mr Yates welcomed members to the meeting, the fourth to be held at RIBA and said that there had been many exciting developments during the last year. The Which? brand was now fully established and products had been refreshed and revised.

Council had spent some time considering a three year business plan and two particular aspects were worth highlighting. First, there had been a slow decline in the number of subscriptions over a period of years. However, substantial investment in the products during the last two years had helped to reverse this trend and subscriptions were now rising. Second, prize draw, which had started to become less effective had been dropped and much better and varied ways of marketing had been introduced. The website had been relaunched as a showcase for our products and campaigning.

Drug and Therapeutics Bulletin was a publication that was totally financed by the Department of Health and the only truly independent source of drug information and treatment. It had been published for nearly 40 years and earlier in the year, the Department of Health had withdrawn funding. Council had undertaken some direct marketing and looked to see whether there was any other organisation prepared to take on this product. Negotiations had taken place with the British Medical Journal and agreement reached so that in December 2006 they would be taking over the publication and its staff.

It had become necessary to re-prioritise the Which? campaigns and focus on health, food and financial services. While this meant dropping some areas, it also meant a greater focus on issues that affected individuals' everyday lives. However, Which? would still be able to react to new issues where necessary such as the switchover to digital television. A high profile kids' food campaign covering the marketing of unhealthy foods to children had been launched. Which? had benefited from the fact that consumers were able to support the campaign online. The internet had also been very helpful as it had been an effective tool in the campaign to combat overcharging by banks.

Which? was also very active in promoting the consumer viewpoint in the pensions arena and very much supported the introduction of personal pension accounts.

During the Queen's speech it had been announced that there would be an Estate Agency Bill that would require all estate agents to join an independent redress scheme. There was also a bill to regulate the way lawyers operated and Which? was hoping for fundamental changes to the way complaints were dealt with. The Government also planned significant changes in the way consumers in the UK were represented as the National Consumer Council would merge with Energywatch and Postwatch. Which? was keen to ensure consumer interests were protected and it was important that the new body 'Consumer Voice' was well funded.

Mr Yates said that at the last AGM he had forecast a projected deficit consequent upon decisions to invest in the magazines and other products. However improved performance coupled with strict cost control had enabled the projected deficit to be converted to a surplus. With continued growth, a healthy surplus was projected for the current year, which would be the 50th anniversary.

The Chairman closed his opening remarks by thanking the Director and the Corporate Management Group for leading the organisation through another successful year and paid tribute to Phillip Whitehead who had died on New Year's Eve. Phillip had been a staunch consumer advocate for many years and was Chairman of Council between 1990 and 1994.

3/49 CHIEF EXECUTIVE'S STATEMENT

Mr Vicary-Smith said he was delighted to report that Which? continued to go from strength to strength, not just in striving to be number one in everything we did but in gaining 'superbrand status'. Out of the top 500 brands, Which? came in at 201, ahead of household names like Waitrose and Volkswagen.

A great deal of work had taken place during the year to revitalise products, serve customers better and grow the subscriber base.

Subscriptions to Which? magazine were growing and had increased for the first time in five years - up by 10,000 since 2004/05. Since the launch of the new website the number of subscribers had exceeded targets by 15%. Computing Which? had seen strong growth with subscriptions now topping 80,000. Which? Legal service was another success story having achieved a 29% growth in membership and an increasing number of phone calls.

The biggest edition of Which? with 84 pages had recently been published and an extra £1m in product and services research had been invested with 3,688 products and services this year. The added value was demonstrated by the fact that more members were staying for longer.

In July 2006, as announced at the 2005 AGM, the prize draw recruitment method was stopped. A whole range of innovative recruitment methods had replaced prize draw and the first national advertising campaign was launched in October with a very positive response.

Which? products had been given a new lease of life and the £1m increase in product testing had been very effective. These efforts had been recognised at the Magazine Design Awards where we had been nominated in the best redesign category. There had also been excellent feedback from members.

The approach of tailoring information to support individuals via a number of new initiatives continued to develop with the launch of a Computing Which? helpdesk service and a Gardening Which? advice service. With increasing gas and electricity prices the Switch with Which? service for energy companies was proving invaluable to all consumers. The Which? Local pilot in Birmingham, which was a new website to help members find reliable tradesmen, was also being tested.

There were other plans in the pipe line. Early 2007 would see the introduction of a specialised money magazine called Which? Money.

Which? campaigns were delivering real benefits to all consumers. Which? was at the centre of the debate to set up a National Pensions Savings Scheme to deliver what consumers wanted; a simple pension system run by someone they could trust with manageable choice and low costs. Another success story came from Scotland which had launched its pilot hygiene scores information for local restaurants.

The Kids' Food Campaign enabled Which? to give a voice to the thousands of people who supported the campaign to end the irresponsible marketing of foods high in fat, sugar and salt to children. The spotlight had been placed oi marketing practices used by a number of big name companies which undermine parental control and encourage children to eat foods that they should be consuming less of. Furthermore, the Chancellor supported Which? evidence showing that a 9pm watershed was the most effective way to control TV adverts.

In summary the three key achievements during the year were first; Which? was growing and reaching out to more and more consumers; second we were increasingly fresh and modern and in touch in an age when consumers wanted information 24 hours a day, seven days a week and third, Which? was continuing to make people as powerful as the organisations they came up against in their daily lives. Mr Vicary-Smith concluded by saying that having been a household name for almost 50 years, Which? would continue to be the most progressive and effective voice for consumers in the years ahead.

'''4/49 REPORT OF THE COUNCIL OF MANAGEMENT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2006'''

The Chairman proposed that the Annual Report and Accounts for the year ending 30 June 2006 be received.

The Chairman reported that Mr Atkinson had asked what action Which? could do to prevent genetically modified or GM contaminated foods being forced upon unwilling consumers by the EU within which the UK government was a major proponent of action.

In reply, Mr Stace (Director of Campaigns and Communications) said that Which? was disappointed that the UK government had accepted rather than challenged the European Commission's guidance on co-existence measures in spite of Which? alerting them to the fact that the approach conflicted with previous EU legislation on GM. This decision would be a disappointment to many consumers who wanted to retain the right to choose between GM and non GM.

Dr Baker asked for an explanation for the prominent advertising of Hughes Direct's services and the omission of advertising other discount sellers, and whether this compromised the independence of Which?

In reply Helen Parker (Editorial Director) said that Hughes Direct was a 'best value for money' initiative exclusive to members and would not generate any profit for Which? but rather was a valuable membership benefit. While most affinity groups who used Hughes Direct received a small percentage of the revenue from purchases, Which? had negotiated any available percentage back into making the products cheaper still. There was no effect on Which?'s reporting of other retailers.

Dr Baker raised a supplementary point and said that the benefit to Hughes Direct was significant in that they were getting free advertising to 500,000 people, a proportion of which were interested in the products on sale. Ms Parker replied that the prominence given to Hughes Direct could be reviewed but that the belief was that this link offered a tangible benefit for members. The Chairman said that he would arrange for a short paper covering this independence issue to be submitted to Council.

Mr Bevan said that government research had shown that consumers preferred a simple traffic light scheme to highlight the benefits applicable to certain foods. However, some supermarkets had decided to choose alternative schemes which would not provide such clear information. Mr Bevan asked what steps Which? was taking to persuade the government to have a universally applied scheme.

In reply, Professor Robert Pickard (Council member) said that food labelling was very complex. Over last five years, a group of labelling initiatives that direct people to a healthier diet had been introduced. However, these were often complex and the Food Standards Agency (FSA) had published recommendations for a multiple traffic light labelling scheme. While some companies had adopted this scheme, others had rejected the FSA scheme in favour of a non-colour coded GDA label. Which? research had shown that the FSA's scheme was the easiest to understand and the quickest to use and enabled consumers to make the most accurate choices about their food.

Mr Bevan expressed disappointment that not all supermarkets were using the traffic light scheme and asked that the pressure be kept up for this to be introduced.

Mr Conquest asked why the Which? Online forums had, as part of changes to the relaunched Which? Online, been effectively hidden with no reference to them on the home page.

In reply, Malcolm Coles (Editor, Which? Online) said that the forums were still there for those who wished to use them. However, they had a number of shortcomings. The software and technology they ran on had proved unreliable and there were licence issues and they could not easily be integrated with the main content. However, Which? was committed to using the Internet to enable communities of users to provide advice on a peer to peer basis. In October 2006 a pilot site called Which? local had been launched for Which? members to share personal recommendations on a wide range of local services. There were also plans to add user reviews to the main Which? tests during 2007.

Mr Conquest raised some supplementary points and said that licence issues could be overcome at small cost. Technical problems had been largely overcome and it was counter productive to direct more emails away from a self help forum.

Mr Glover asked where CA expected to be in five years' time.

Mr Vicary-Smith said that over the next 5 years he would like to see Which? become an organisation with an ever growing numbers of customers; many new products and become number one in everything it did. There would be greater engagement with customers and the public and this would take place in new and innovative ways. There would be increased joint testing and more testing on a continuous basis.

Dr Gyde asked if there was an effective way of advising the banking industry that the present obsession with selling financial packages to the well off and squeezing the poor with high charges was unethical and ultimately counter productive. h

In reply Louise Hanson (Head of Campaigns) said that Which? was in dialogue with the banking sector and used opportunities with government to address issues relating to how the sector worked. Banking practices had been consistently challenged over the years - from the unfair mortgages campaign to the situation in Northern Ireland. Earlier in 2006 Which? had launched an ASBO (Anti Social Banking Order) campaign and would continue to campaign for an industry that met consumer needs.

Dr Gyde asked whether Which? could persuade banks to take consumer opinions on board. Ms Hanson said that banks claimed they did this but Which? research provided a different story. There was a divide between what was promised and what was delivered.

Mr Vicary-Smith said that the financial services industry was in three different places. Some organisations were looking for solutions and Which? was looking to help them. Then there were those where Which? was fighting to make the voice of consumer more prominent. The third group comprised those who did not care about consumers and were in denial. In those cases straight opposition was the only thing that worked.

Ms Noble said that the best way of showing a bank your dissatisfaction was to move to another bank.

The Chairman said that Mr Jones noted that the Which? property at Gascoyne Way, Hertford had been professionally valued at an open market value half a million pounds less than its book value and had asked whether the Council considered that the diminution in value was not permanent.

In reply Neville Duncan (Chairman of the Joint Audit Committee) said that the Hertford Property had been valued at £3.2m in 2001 and its current book value was £3.7m. However £1.8m had been invested on refurbishment and the value of the property had increased by 13% as at 2005. So a combination of capital growth and money spent on refurbishment meant that the valuation gap had probably been eliminated. Furthermore, as both properties were and would continue to be in active use by Which?, Council did not place the highest priority on a market valuation.

Mr Phillips referred to Which?'s withdrawal of support for the weakened Housing Information Packs (HIPs) and asked whether Which? would campaign for better protection for the consumer when they purchased a property.

In reply Louise Hanson said that Which? stood by its initial support for HIPs. However, the late decision to remove the home condition report and thereby water down the proposal had led Which? to reluctantly step away. The Government would be looking to see whether HIPs would work as a voluntary part of the pack and Which? would be keeping up the pressure on this point. Which? would always support initiatives that speeded up the process for purchasing houses and helped improve value for money.

On the second point, while Which? received some complaints about new build, they were much smaller than the number of complaints about estate agents and solicitors. Consequently, and, given limited resources, it was these areas Which? had chosen to concentrate on.

Ms Telfer said that the HIPs issue could become a problem with consumers paying more money for nothing much of value that might damage the reputation of Which?

Ms Pinschof asked why the Which? report in July on the sun screen efficacy had not hit the headlines and asked whether big business had undermined Which? press coverage.

Mr Stace said that there had been quite a bit of newspaper coverage. ITN had originally agreed to run the story but had dropped it at the last minute. Because there were no European standards for testing sun tan lotion Which? would be open to challenge. Mr Stace also said that big business did not undermine Which? publicity. Which? was proud of its reputation of being entirely independent taking no advertisements and putting the interest of consumers first.

Dr Roston asked whether Which? would be campaigning for improvements in the state pension. Second, Dr Roston asked whether Which? was satisfied with Ofcom proposals for 0870 and 0845 numbers.

In reply Louise Hanson said that the level of the state pension was a citizen issue but noted that the government was planning to restore the link with earnings. However it was not a matter that Which? would campaign on. Organisations such as Help the Aged and Age Concern were better placed to promote the needs of pensioners. Which? instead was focussing on the new personal pension accounts proposed in the White paper as they met the Which? objects of creating a low cost, simple and flexible way for low to moderate earners to save for a more prosperous retirement.

Jim Woodward-Nutt (Council member) said that OFCOM would introduce new UK wide 03 numbers from early next year. Calls to 03 numbers would cost the same as calls to geographic numbers and be included as part of any inclusive call minutes or discount scheme for geographic calls. This would apply to calls from any line. No revenue sharing would be permitted on calls to 03 numbers.

It was then up to individual companies to switch from their current 0845/0870 numbers to 03 numbers. This development from OFCOM removed the need for companies to have a geographic alternative although OFCOM could not force companies to adopt 03 numbers.

The Chairman said that companies would have to state on publicity that if an individual rang an 0870 number it involved revenue sharing at 8p a minute. Furthermore a recorded message must repeat this information at the start of the call.

Mr Wagner asked for an explanation of the statement in the accounts disclosing £400k of new revenue relating to the administration fee rebate from switchwithwhich.

Mr Gardner (Marketing Director) said that Switch with Which? was a gas and electricity switching service launched in July 2005 that is publicly available and allowed householders to compare the price of their current gas and electricity suppliers with others in the market. The £400,000 related to administration fees paid by gas and electricity suppliers for each person who had successfully switched. Unlike other switching services CA received a flat administration fee which did not vary by supplier or individual tariff.

Mr Williams and Mr Woolley raised the issue of identity theft which was one of the most rapidly growing and personally damaging criminal activities. The question was also raised as to whether Which? should avoid the use of postcards for AGM notification purposes.

In reply, Neil Fowler (Editor of Which?) said that Which? had published a report on ID theft in March 2005 and that had significantly increased the number of shredders sold. A further report would appear in January 2007. The best advice was to be vigilant and only give personal information to trusted companies. However, names and addresses were freely available and Which? membership numbers could not be used fraudulently to gain any personal or confidential information. So the AGM postcards were not a risk. Which? also believed that identity theft insurance was unnecessary as the most consumers were liable for was £50 and this sum was often waived.

Mr Vicary Smith said another factor was the role of the Information Commissioner. There had been a lot of media attention given to banks dumping bin liners of confidential information and the Information Commissioner was very exercised about this. It was clear that he would be tough on banks that were negligent.

Mr Woolley said that data theft fraud, whereby call centres abroad were selling personal details meant that consumers were less secure than in the past. Mr Vicary-Smith said that in respect of the theft of data in the UK, the Information Commissioner was key. The situation was more difficult when data theft took place abroad as a result of banks outsourcing. The Information Commissioner would still press banks to sort out the problems. However, consumers who didn't like using a bank that processed data overseas could move to a bank that didn't adopt that practice.

Mr Wrench asked whether a Which? 'recommend' would be better than a best buy and referred to the fact that a July 2006 report on refrigerators gave ten items as best buys.

In reply, Liam McCormack (Head of Which? Research) said that anything we made a best buy was an excellent product. As most people bought freezers according to type, each category was presented in a separate table with recommendations in each category.

It was RESOLVED that the Annual Report and Accounts for 2005/06 be received.

'''5/49 APPOINTMENT. NOMINATION AND ELECTION OF COUNCIL MEMBERS'''

The Chairman said that there were four vacancies on the Council of Management. They arose from the retirements of Tanya Heasman, Natalie MacDonald, Roger Pittock and Brian Yates.

The Chairman announced that six valid nominations had been received for these vacancies namely John Bevan, Tanya Heasman, Natalie MacDonald, Robert Pickard, Roger Pittock and Brian Yates

In accordance with Article 3.7.6, the Chairman called for a poll and instructed the Secretary to arrange for the despatch of ballot papers during the following week to all ordinary members for return to the Independent Scrutineers, Electoral Reform Ballot Services, by 5 January 2007. The results would be notified as soon as possible thereafter* and would be deemed to be the resolution of the AGM. The Chairman said that members voting in the election would have the choice of voting by post, telephone or internet.

(*The results of the 2006 Council elections are given below).

6/49 APPOINTMENT OF VICE-PRESIDENTS

The Chairman advised the meeting that the five-year terms of office of two Vice-Presidents expired at the 2006 Annual General Meeting. The Council had recommended that each be re-appointed for a further period of five years.

The Chairman of behalf of Council MOVED:

THAT in accordance with Articles 6.6 and 6.7 of the Articles of Association, Jennifer Jenkins be and is hereby re-appointed as a Vice-President.

The Resolution was duly seconded and declared CARRIED.

The Chairman on behalf of Council MOVED:

THAT in accordance with Articles 6.6 and 6.7 of the Articles of Association, Alma Williams be and is hereby re-appointed as a Vice-President.

The Resolution was duly seconded and declared CARRIED

7/49 RE-APPOINTMENT OF AUDITORS

The Chairman moved that Deloitte and Touche LLP be re-appointed as Auditors, to hold office until the conclusion of the next General Meeting at which accounts are laid before the company.

The Resolution was duly seconded and declared CARRIED.

8/49 REMUNERATION OF THE AUDITORS

THAT the remuneration of the Auditors for the ensuing year be fixed by the Council of Management.

The Resolution was duly seconded and declared CARRIED.

There being no other business the meeting ended at 4.40pm.

Election of the Members of Council 2006

The results of the 2006 elections, which closed on Friday 5 January 2007, are as follows:

4 vacancies

Tanya Heasman 2836     ELECTED

Robert Pickard   2608    ELECTED

Roger Pittock    2598      ELECTED

Brian Yates         2739    ELECTED

John Bevan 1075

Natalie-Jane Macdonald 2524