Cartridge recycler gets up HP's nose

By RICHARD WOOD

Inkjet and laser printer refill business Cartridge World is expanding rapidly in New Zealand through franchising.

But printer manufacturer Hewlett-Packard is wary of the Australian company's street-front refilling approach and is investigating what it can do to combat it.

Twenty stores have been set up since July 2000, with another 10 waiting in the wings.

Nine of the existing stores are in Auckland.

While refill bottles for inkjet cartridges have been available for years, Cartridge World offers a drop-in service.

The company advises on the suitability of the cartridge for refilling, and if necessary uses ultrasound equipment to dislodge dried ink.

It then adds the ink while you wait, saving what can be a messy operation for the customer.

Inkjet printer manufacturers decry the use of refilled ink cartridges, which undercut new replacements by as much as 50 per cent.

Winnie Kwan, Hewlett-Packard's market development manager for supplies (Australia), said the company could guarantee the best printout only if the customer used a genuine HP cartridge.

Refilling a cartridge could clog the print head, she said.

"The printer could get smudges or even in some cases it could ruin the printer."

Kwan said if a refilled cartridge caused a problem the HP warranty would not apply.

Ink research cost a lot of money, she said, and the refill industry was getting far less revenue to fund that research than the printer manufacturers.

But Cartridge World New Zealand master franchisee Geoff Smith said the refill industry was spending big money on ink research.

The company says on its website that its inks have the same chemical and physical properties as original inks, and inks with cleaning agents are used where possible.

"We've researched the ink qualities thoroughly and use the best available," said Smith.

"Cartridge World guarantees it will perform as well as the original under similar conditions."

Ironically, the company also sells new cartridges for the major vendors, a situation that makes HP uncomfortable.

Kwan said Cartridge World was effectively a competitor to HP so she had misgivings about supplying it with new products to sell.

Cartridge World is supplied through HP's distributors so is not directly under the control of the vendor.

"I'm trying to go through and see what HP can do, to actually see if we can stop distributing to them," said Kwan.

She distinguishes between the way Cartridge World sells ink and the supply of third-party refill bottles by the likes of Dick Smith Electronics.

She said Dick Smith did not provide a refill service to the customer.

Smith said Cartridge World was offering the public an alternative.

It brought the refilling industry to the street-front, offered savings of up to 50 per cent, and helped to keep plastic out of landfills, he said.

Cartridge World has 100 stores in Australia and is expanding globally.

It is owned by Brian Stokes and Paul Wheeler, of Adelaide.

Smith said the New Zealand arm also included stores in Whangarei, Tauranga, Napier, Wellington, Christchurch and Dunedin.

Franchises cost $70,000, including exclusive territory, technical training, start-up stock and equipment.

Store and lease costs were not included and would typically be an extra $10,000, said Smith.

He claimed some stores had reached monthly turnover of $50,000.

Cartridge World