Europen: German deposit system has damaged industry

Related tags European union

The German system of mandatory deposits on certain non-refillable
beverage containers has had a devastating impact on some sectors of
the packaging industry, according to a recent assessment.

The study, carried out by Europen, the European Organisation for Packaging and the Environment argues that the deposits have had a number of harmful effects, and have not brought the environmental benefits that were the main reason given for their introduction in the first place.

Europen's findings suggest that the controversial German system has resulted in an overall net loss of 9,530 jobs in 2004 alone. Moreover, factories in the UK and Sweden have been closed due to the collapse of demand for non-refillable beverage containers.

The study also shows that the return rate for refillable containers has fallen significantly - to below 50 per cent in some categories and that plastic recycling capacity in Germany, carefully developed by DSD (the German packaging waste recovery and recycling organisation), is increasingly becoming under-used.

Europen has sent copies of the study to the environment ministers of all the EU Member States and to the European Commission. Europen aims to make sure that, in view of future discussions on packaging and the environment - both at EU and national level - European policymakers are given a full and accurate picture of the consequences of the German deposit law.

The deposits, which place a compulsory charge on a range of drinks bottles and cans, have been widely criticised since they were introduced in January last year. They have led to complaints from businesses both inside and outside Germany, and from 10 EU Member States, that they breach EU internal market rules.

The European Commission has launched an infringement procedure against the German government, and the Advocate General of the European Court of Justice recently expressed a strong opinion that the German deposit legislation is incompatible with EU law.

The Advocate General supported the view of the EU Commission that the present deposit regime contains discriminatory practices not in compliance with the EU Packaging Directive and has lead to distortion of competition within the internal market. He did not endorse the mandatory deposit as a valid and justified instrument to protect national refill bottle systems and questioned life cycle assessments as basis for a discriminatory packaging policy.

This announcement was warmly welcomed by the Beverage Can Makers in Europe (BCME). "It will be very difficult for the German government to ignore the additional criticism from an EU Institution commenting on the advocate general conclusions,"​ said Lars Emilson, chairman of the BCME, which is made up of Ball Packaging Europe, Crown Bevcan Europe and Rexam.

The packaging industry is confident that it has consumers on its side. The Association of European Steel Producers (APEAL) for example claims that the majority of Germans want to see the one-way can deposit system scrapped. Over 75 per cent of consumers feel that one-way drinks packaging should be sorted for recycling at home, as was done until the end of 2002.

The current system, which was introduced on 1 January 2003, means that consumers must return the can to the shop in which they purchased it.

"As a result, if you bought a container in Hamburg and went by train to Frankfurt, you couldn't return it,"​ Rexam group communications director Per Erlandsson told "Customers can only return a container to the shop in which they bought it. As a result, many retailers have delisted one-way containers."​ For consumers, the problem, it seems, is that there is no uniform return system for one-way packaging in Germany. According to APEAL, there are currently five different, incompatible systems covering 10 per cent of the drinks market at most.

In addition, the packaging industry has argued that mandatory deposits lead to discrimination and unequal treatment for different types of packaging. The system is also ambiguous - still soft drinks are not subject to deposits, while fizzy drinks are. The Advocate General's conclusions will therefore provide the packaging industry with yet more ammunition with which to bring down a highly unpopular policy.

Related topics Processing & Packaging

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