Western Europe's Experience with
Refillable Beverage Containers
This web page presents policies in Europe that promote or require
refillable beverage containers, the development of these policies,
what they have achieved, and what may happen in the near future.
Another topic that deserves attention is the logistics of refilling
in Europe, but that topic is already thoroughly covered by three
reports [AGM][AGC][KJ]. On this web page, all Euro amounts of taxes
and deposits are based on October 22, 2001, exchange rates [XCHG].
Refilling advocates, especially those in the United States and
Canada, look to Western Europe's thriving refilling systems for
inspiration and for technical guidance. Wherever refillable beverage
containers are prevalent in Europe, refilling systems exemplify
the use of advanced technology. One of the most important innovations
is the 1.5-liter refillable PET bottle, which has enabled refilling
systems to package beverages in lightweight, shatterproof, multi-serve
containers. When European consumers return these bottles to stores,
they most likely use a fully-automated take-back machine. Bottles
are automatically sorted at the store or at another distribution
point and then returned to the bottling plant, where they are automatically
put on the washing line. After the bottles are washed, an electronic
sniffer inspects them for contaminants. The clean bottles are refilled
on production lines whose speeds match those of one-way bottles.
Innovations in packaging have come also to the beer industry, where
many European brewers have been working to perfect the use of refillable
PET and PEN bottles. The development or refinement of these technological
innovations in Europe has certainly depended on viable markets for
beverages in refillable containers. In turn, these markets have
depended on policies that effectively promote or require refilling.
Europe has served as a proving ground for the successful use of
such policies.
In almost every European nation, regardless of the presence or
absence of a policy, refillable containers are used to some extent
for at least one type of beverage [AGM][IAS]. In France, however,
refillable beverage containers have become almost extinct. In Ireland
and the United Kingdom, refilling has almost disappeared, but most
of the beer sold in these two countries is draught beer [CBMC].
In Belgium, Greece, Portugal, Italy, and Spain, refilling has disappeared
for most types of beverages but has remained for other types, mainly
alcoholic beverages. In Sweden, Germany, Austria, Norway, and The
Netherlands, consumers can buy almost any type of beverage in refillable
bottles, but one-way containers hold a significant market share
[AGM, p. 5]. In Finland and Denmark, almost all beer, soft drinks,
and packaged water come in refillable containers. Refillable bottles
for wine and for liquors also are very prevalent in these two countries
[AGC, pp. 7-23].
In spite of the high prevalence of refillable beverage containers
in many countries, refilling has been slowly declining across Europe.
In 1997, 41 percent by volume of the mineral water sold in European
Union (EU) countries came in refillable bottles. In 1996, about
39 percent of soft drinks were consumed from refillable bottles.
The amount of beer sold in refillable bottles fell from 81 percent
in 1979 to about 60 percent in 1997 because the growth in the European
beer market has favored one-way containers. Non-carbonated beverages
such as fruit juices and flavored milk are packaged mainly in cartons,
and only a few refilling systems exist for these types of drinks
[AGM, pp. 16-19].
The changes in the beverage and retail industries that caused the
decline of refilling in the United States are forcing the decline
also in Europe. Coca-Cola, which has more than 50 percent of the
European market, had a decentralized bottling and distribution structure
until the mid-1980s. Around that time, Coca-Cola's European subsidiary
began transforming itself from a multi-company organization of franchise
bottlers and distributors to a single corporation. Coca-Cola's consolidation
led to the centralization of its bottling and canning operations.
One of these operations, the Bergues plant in Northern France, cans
Coca-Cola products for the entire European market [AGM, pp. 46-47].
The availability of canned soda pop from this and other plants should
please retailers, who prefer one-way containers. Food retailing
in Europe has become much like that in the United States, where
supermarket chains dominate the retail food industry. One of the
driving forces in food retailing in Europe has been the discounters,
who adamantly refuse to stock anything in reusable packaging. One
of Europe's leading discounters, the German company ALDI, also has
stores in several U.S. states. The following are some of the characteristics
that distinguish the discounters' stores from other retail stores
[AGM, pp. 56-59].
- Consistently the lowest prices
- Stock limited to only the most basic goods, usually about 500
items
- Display of merchandise in boxes or on pallets
- Minimal storage space
- Only cardboard for transport packaging
Stores with such features do not accommodate refillable beverage
containers very well.
Besides the retail industry, another adamant opponent of refilling
in Europe is the packaging industry. The packaging and the consumer
products industries express their opposition to refilling policies
through the European Organisation for Packaging and the Environment
(EUROPEN). EUROPEN asserts that laws which favor certain types of
packaging unnecessarily restrict trade and distort competition.
To demonstrate that refilling laws are trade barriers, EUROPEN has
made the following equivocal argument: In European countries where
the market share of one-way containers is less than five percent,
the market share of imported soft drinks and beer also is less than
five percent [ERC, p. 227]. To argue against refilling laws and
other packaging laws, EUROPEN also has criticized the use of life-cycle
analysis in policymaking.
In its effort to abolish refilling laws, EUROPEN has a powerful
ally--the European Union (EU). The executive branch of the EU, the
European Commission (EC), has referred Germany and Denmark to the
EU Court on charges that their beverage container laws violate trade
agreements between EU member states [HW][ECPR][AGM, p. 74][CB].
The EC has also argued that the beverage container laws of these
two countries are not the types of laws that conform to the EC Directive
on Packaging and Packaging Waste. The directive, however, barely
mentions the reuse of packaging and instead emphasizes recycling
and recovery. The directive aims to harmonize the packaging laws
of EU member states and to reduce the environmental impacts of packaging
and packaging waste without impeding commerce. To comply with the
directive, each member state has implemented laws and strategies
that work with its existing waste management policies [KJES, p.
i]. The directive requires the EC to revise its waste diversion
targets by 2001, but the EC was still discussing them in mid-2001.
The Environment Committee of the EU Parliament has recommended stronger
reuse provisions for the revised directive and has suggested that
manufacturers use life-cycle analysis studies to justify their choices
of packaging for their products [RLIE]. The European Environmental
Bureau, a federation of grassroots organizations from across Europe,
has also called for stronger reuse provisions in the revised directive
[EEB].
While the retail and packaging industries clearly dislike refillable
beverage containers, the attitude of the beverage industry appears
to vary from country to country and from product to product. While
the Finnish beverage industry boasts about how its use of refillables
has contributed to Finland's noteworthy waste diversion achievements
[PAND], the Dutch soft-drink bottlers explicitly state their preference
for one-way containers [NFIB]. German mineral-water bottlers have
expressed pride in their refilling systems [GDB], but French bottlers
have expressed their resentment of Germany's beverage container
laws [HW].
One industry group that has traditionally preferred refillable
bottles is HoReCa: hotels, restaurants, (pubs), and caterers. Hotels,
restaurants, and pubs in Europe prefer to sell packaged beverages
in refillable bottles because of their customers' preference for
local and regional beverages in refillables and because of the cultural
value of eating and drinking in these places. In addition, many
breweries own restaurants and pubs, and this arrangement makes refilling
the ideal packaging option for beer [AGM, p. 60].
Regardless of whatever opposition or support exists, many European
governments consider refilling the best option for managing beverage
containers. Many European countries face a shortage of space for
landfills and therefore must do everything possible to divert waste
from them [EMAG]. Although recycling is a viable option for waste
diversion in most European countries, it is less so in others. The
need to prevent beverage containers from going to landfills or from
littering public spaces has provided many European governments the
impetus to enact laws that promote or require refilling. In most
of the nations that have such laws, most of the volume of packaged
soft drinks, mineral water, and beer is sold in refillable containers;
these nations have been able to prevent or decelerate the decline
of refilling and to preserve and improve their refilling systems.
Without refilling laws, the forces that oppose the use of refillable
containers would prevail, and one-way containers would dominate
the European beverage market. Indeed, the policies are what drive
refilling in Europe.
return to top
Denmark applies both a regulatory and an economic instrument to
deliver a one-two punch to one-way containers. This country requires
refillable containers for all packaging of domestic beer and soft
drinks, and bans cans for both domestic and imported beer and soft
drinks. These regulations apply also to carbonated mineral water.
In addition, a tax on almost all consumer packaging gives refillables
a price advantage. In the latest version of this tax, the results
of life-cycle analysis (LCA) studies determine the per-kg rates
for different packaging materials, but volume-based rates apply
to beverage containers. The Netherlands apparently was the first
country to use life-cycle analysis in its beverage container policy,
but Denmark's LCA-based packaging tax has gained the attention of
environment ministers from other European countries.
Policy development. In 1977, Denmark began requiring refillable
containers for all beer and soda pop sold there by domestic producers.
The soft-drink industry and Denmark's two leading brewers supported
this requirement in order to protect their refilling systems, which
were threatened by a brewery that had begun to package its beer
in cans [AGC, p. 8]. A 1989 law, with its 1991 and 1997 amendments,
requires refillable containers also for carbonated, unflavored mineral
water and specifies criteria that all domestic refillable containers
must meet in order to be approved by the Danish Environmental Protection
Agency (DEPA). For imported beer and soft drinks, the law allows
refillable or non-refillable containers that are not made of metal
and that are sold and recovered under a deposit-return system. A
violation of the 1989 law may result in a fine of an unspecified
amount [SO1][SO2]. Denmark's beverage container laws effectively
ban metal cans. Because non-alcoholic, non-carbonated beverages
such as iced tea, juices, and flavored milk have an insignificant
share of Denmark's beverage market, they are allowed to be sold
in cans. If significant shifts in the markets for these beverages
occur, then the DEPA will review its policies [FT].
In 1978, Denmark complemented its refilling requirement with a
tax on all new beverage packaging [AGC, p. 14]. The Danish Action
Plan for Waste, which became effective in 1993, stimulated discussion
about taxes on all packaging. The interest in such taxes waned and
remained dormant until 1996, when the parliament asked the government
to re-study the possibilities of a packaging tax. While the government
was finishing its study in 1997, the parliament approved a limited
packaging tax, which became effective in 1998. This tax applied
to beverage bottles and to bottles and jars of only a few types
of food products. Some of the recommendations of the government's
study were the basis for an expanded packaging tax scheme, which
became effective in 1999 [ERC, pp. 230-231].
One of the other recommendations of the 1997 study, a tax scheme
based on the findings of life-cycle analysis studies, evolved into
a DEPA proposal to set tax rates which are indexed to the environmental
impacts of glass. Under this scheme, packaging materials whose environmental
impacts are greater than glass are subject to higher tax rates,
and materials with less impact are subject to lower rates [ERC,
pp. 230-231]. For beverage containers, however, the final version
of the tax law only distinguishes cartons from other beverage containers.
The tax scheme assigns six different per-container rates for six
different volume-capacity ranges for cartons and likewise assigns
another set of six per-container rates for all other types of beverage
containers [SO3]. For beer, soft drinks, liquor, and wine, fillers
and importers pay the tax on each container. The revenue from the
tax goes to the treasury, but some of this money has helped to fund
the government's environmental programs [DB]. This latest version
of the packaging tax became law in December 2000 and was scheduled
to become effective on April 1, 2001 [SO3].
Because the tax on beverage containers is based on volume capacity
rather than weight, the tax on a one-way bottle of a given size
is equal to the tax on a refillable bottle of the same size. When
a refillable bottle is refilled several times, however, the tax
per filling is less than that of the one-way bottle [ERC, p. 233].
To illustrate how the tax magnifies the cost difference between
a one-way bottle and a refillable bottle, consider the typical costs
of 500-ml PET bottles in Europe. A one-way PET bottle of this size
costs 0.069 Euro, a comparable refillable bottle costs 0.133 Euro
[AGM, p. 71]. The refillable bottle only has to be filled twice
to make the price per filling cheaper than the one-way bottle. If
we assume that the refillable bottle makes 20 fillings, the average
for PET bottles in Denmark [AGC, p. 9], the cost difference between
the bottles is 0.062 Euro without the tax, but grows to 0.167 with
the 0.11 Euro tax [SO3], [DAR]. Furthermore, the refillable bottle
on average is almost 15 times cheaper than its one-way counterpart
-- 0.012 Euro per filling as compared to 0.179 per filling for the
one-way container. See the tables below.
Price
of 500-ml PET Bottles in Europe,
One-Way v. Refillable (in Euros)
| |
|
Refillable
Refilled
Twice |
Refillable
Refilled
20 Times |
Container
Cost |
Container
Cost Per Filling |
Container
Cost Per Filling |
| One-way
bottle |
0.069 |
0.069 |
0.069 |
| Refillable
bottle |
0.133 |
0.067 |
0.007 |
| How
much cheaper is a refillable in Euros? |
-0.064 |
0.003 |
0.062 |
Impact
of Tax on Price of 500-ml PET Bottles in Europe,
One-Way v. Refillable (in Euros)
| |
Container
Price per
Filling |
Tax
per
Filling |
Total
per
Filling |
| One-way
bottle |
0.069 |
0.110 |
0.179 |
| Bottle
refilled 20 times |
0.007 |
0.006 |
0.012 |
| How
much cheaper is a refillable in Euros? |
|
|
0.167 |
| How
many times cheaper is a refillable? |
|
|
14.7 |
Results. Together, the refilling requirement and the packaging
tax have effectively promoted the use of refillable bottles in Denmark's
beverage market. Because of the refilling requirement, Danes consumed
100 percent of their packaged beer and at least 90 percent of their
soft drinks and mineral water in refillable bottles in 1999 [CBMC][KNUD].
For beverages not subject to the refilling requirement, the tax
has effectively promoted refilling. Because of the price advantage
that the tax gives to refillables, most retailers in Denmark sell
wine and other alcoholic beverages only in refillable bottles. One
of these retailers is the discounter ALDI, one of Europe's most
adamant opponents of refilling. ALDI and other retailers sell soft
drinks and alcoholic beverages in Denmark in refillable bottles
and have experienced very few difficulties with costs and logistics
[AGC, pp. 8, 13]. On store shelves in Denmark, moreover, consumers
see a variety of beverage packaging. Soft-drink companies--who like
to use packaging to distinguish their products from competitors'
products--have been allowed to use their own bottles or to choose
their packaging from the five standard PET bottles and one standard
glass bottle [BWID][AGC, p. 8].
Denmark's beverage container laws have greatly benefitted the public.
The refilling requirement for soft drinks and beer has prevented
390,000 tons of waste annually. The use of refillable wine bottles,
which is encouraged by the tax, has prevented 60,000 tons of waste
annually [FT]. While helping Denmark reduce waste management costs,
the packaging tax raised 109 million Euros in 1998 and 101 million
Euros in 1999 [DB]. The Danish Tax and Customs Administration spent
254,800 Euros and many man-hours of labor to establish the information
systems required to administer and collect the tax. Operating costs
for the tax collection system were 27,000 Euros in 1999. The complexity
of the packaging tax scheme makes collection seem difficult in comparison
to other taxes [ERC, p. 233]. On the other hand, the administration
and enforcement of the refilling requirement for soft drinks and
beer has been easy, and compliance has been easy for the beverage
industry [AGC, p. 13].
Outlook. If the EU Court rules against Denmark, then Danes
may see many more one-way containers. In 1999, the European Commission
(EC) referred Denmark to the EU Court of Justice for that country's
ban on cans [AGM, p. 74], and the case went to trial June 2001.
The EC argued that the ban on cans violates the EU Directive on
Packaging and Packaging Waste because it contravenes the Directive's
purpose of harmonizing the management of packaging across the EU.
The EC also argued that the ban is a trade barrier under Article
28 of the EEC Treaty and attempted to debunk Denmark's use of life-cycle
analysis studies to defend its beverage container policies [CB].
In its defense, Denmark cited a 1986 ruling by the EU court that
found the ban is not a barrier to trade as long as the EU does not
require a beverage container reuse policy for all member states.
The EU, in fact, has not required such a policy through its packaging
directive or through any of its other directives [AGM, p. 74]. In
the debate leading to the trial, furthermore, Denmark has argued
that ". . . the Directive is at present not fully operational as
a harmonisation directive," and has viewed the ban on cans ". .
. as a natural extension of the environmental objectives of the
Directive [DEPA]."
Denmark's vulnerability to canned beverages from surrounding countries
underscores the importance of the trial. In Sweden, Denmark's northern
neighbor, 63 percent of beer comes in cans [SBAC]. To the south,
the Bergues plant in Northern France cans Coca-Cola products for
the entire European market [AGM, pp. 46-47]. The slow decline of
refilling in Germany and the anticipated softening of that country's
beverage container laws will also put more cans closer to Denmark's
borders. ". . . Denmark risks being inundated with all possible
types of non-refillable packaging," says Svend Auken, Danish Minister
of Environment and Energy [DEPA]. If the EU Court rules against
Denmark, then Denmark may join Germany in softening its policies
by introducing a deposit law [ERNU]. However, Denmark could make
refillable beverage containers exempt from its packaging tax and
maintain the success that it has had with promoting refilling.
Late-Breaking News. According to the February 2002 Danish
Environment Newsletter, "the Minister of the Environment has repealed
the prohibition on disposable packaging that has kept beer and soft
drink cans off the Danish market. Denmark has called on the EU Commission
to drop the pending lawsuit, which is now unnecessary. A common,
obligatory deposit and return system will ensure that the used cans
are collected." By January 15, 2002, new deposit regulations covering
all beer and soft drink containers are slated to be effective. By
summer 2002, breweries and retailers are slated to install new recycling
machines for cans and other one-way packaging [DEN]. The deposit
is expected to be DKr 1.5 (0.20 Euro) for containers smaller than
a liter and Dkr 4.25 (0.61 Euro) for those larger than a liter [CSE].
return to top
Among the European countries that promote or require refilling,
Finland has become one of the most successful by implementing a
simple levy on one-way beverage containers. Although this policy
instrument allows one-way containers, consumers and the domestic
beverage industry overwhelmingly prefer refillable bottles. Refilling
is almost a necessity in Finland, in fact, because recycling is
an expensive and impractical option for managing used beverage containers.
The prevalence of refillable containers and the prevention of waste
are measures of Finland's success with refilling, and the lack of
an EU challenge will help ensure that the levy stays in place.
Policy development. Since the 1970s, Finland has used a
tax system to promote refilling. Under the current laws, which became
effective in 1994, a container levy on both alcoholic and non-alcoholic
beverages supplements other food and beverage taxes. The amount
of the levy is based on the method for managing the containers [VYH][KJFN,
pp. 2-3][ERC, p.222][AGC, p. 19].
- No recovery of packaging waste, 0.67 Euro per liter
- Recycling, 0.17 Euro per liter
- Refilling, no tax
To obtain an exemption from the levy on beverage containers, the
refilling system must meet three main requirements [ERC, p. 222].
- A deposit of 0.08-0.25 Euro
- Return rates of 75 percent in the first year, 85 in the second,
90 in the third, and 95 percent in the fourth year
- Submission of reports to the Ministry of the Environment
The bottler, brewer, or importer pays the levy upon shipment to
stores [ERC, p. 222], and the revenue goes to the treasury [DB].
The Ministry of Finance and the Ministry of the Environment jointly
administer the levy program [ERC, p. 223].
The prevention of beverage container waste motivated the implementation
of the levy [ERC, p. 223], but the impracticality of recycling in
Finland necessitates it. Finland's capacity for recycling glass
is limited, and markets for recovered glass are unstable. In addition,
Finland does not have any facilities for converting recovered PET
and other plastics into feedstock, and no plans exist to build such
a facility there. In fact, Finland exports almost all of its recovered
PET and aluminum. Finally, Finland's low population density and
trickle of packaging waste do not justify investments in extensive
recycling collection and sorting systems. The difficulties of recycling
glass and plastic bottles make refilling the most practical packaging
option for beverages [KJFN, p. 10].
In spite of the apparent need for it, the levy has been the subject
of debate within the government. In 2000, the Finnish Competition
Authority (FCA) demanded the abolition of the beverage container
levy and the deposit laws because the FCA believed that both laws
were effectively closing the beverage market to new companies, to
small companies, and to foreign companies. One barrier was the minimum
amount of beverage that a new company would have to sell before
it could earn profits from refilling. Another possible barrier to
entering Finland's beverage market was the one-time membership fee
of 17,000 Euros required to participate in Panimoliitto's bottle
management system. (Panimoliitto is the Federation of the Brewing
and Soft Drink Industry, a trade association that manages the refillable
bottle pool for its members.) To help the smaller bottlers compete,
the government proposed to exempt manufactured mineral water from
the beverage container tax system. The parliament rejected this
proposal, but Panimoliitto offered to replace its fixed membership
fee with a fee that is based on the number of different products
that a beverage producer annually offers [ERC, pp. 226-227].
The levy has survived a challenge also from the packaging industry,
which argued that the purpose of the levy was the preservation of
deposit-return systems for beverage containers. In 1996, moreover,
the European Aluminum Association and the Beverage Can Makers of
Europe complained to the European Commission that the tax discriminates
against recyclable one-way containers because it still applies even
when recycling rates are high. The commission responded by saying
that the amount of the tax was too low to validly argue that its
purpose is something other than environmental protection [ERC, p.
223].
Results. The levy has effectively promoted refilling, reduced
the consumption and waste of packaging materials, and brought revenue
to the government. In 2000, Finns consumed 73 percent of their beer
and 98 percent of their packaged soft drinks and mineral water from
refillable bottles [PANP]. Moreover, the prevalence of refilling
has kept pace with the growth of Finland's beer market. In the soft-drink
market, one bottler unsuccessfully tried to sell beverages in 500-ml
one-way PET bottles [AGC, p. 17]. The levy not only has thwarted
one-way bottles but also has forced the establishment of a deposit-return
system for aluminum cans. This system recovers 95 percent of the
cans that are sold under it and allows its participants to pay the
amount of the levy that corresponds to recycling [ERC, pp. 225,
226].
Besides the recovery of cans, the levy has brought some other amazing
results in regard to waste prevention. Refilling has prevented 380,000
tons of waste annually [ERC, p. 225] and has made Finland the EU
champion in the prevention of packaging waste. In 1998, Finland
generated 83 kg per capita of packaging waste, while other EU member
states generated an average of 159 kg per capita [PAND]. On a weight-per-person
basis, in fact, 84 percent of glass packaging in Finland is reusable
packaging [KJFN, p. 10].
The total revenue from the levy from 1995, 1996, and 1997 combined
was 37.5 million Euros, and the estimated revenue from 1998 was
11.6 million Euros. From 1995 to 1996, the revenue dropped by 40
percent because of the establishment of the deposit-return system
for cans [ERC, pp. 222-223]. The cost of administration of the levy
is low [ERC, p. 223], probably because it is co-collected with other
food and beverage taxes.
Outlook. Because of the popularity of refillable bottles
among consumers, the support by both government and industry for
refilling, and the European Commission's lack of concern about the
levy, the future of refilling in Finland looks bright. The results
of a January 2001 Gallup poll indicate that 79 percent of Finnish
beer drinkers prefer to buy beer in refillable bottles and that
94 percent of consumers who buy soft drinks prefer refillables [PAND].
Both the Ministry of the Environment and the major brewers want
to keep Finland's beverage container laws in place. Abolishing the
tax system would begin the abolition of all environmental protection
regulations, according to the environment minister, and would begin
to undermine the competitiveness of the refilling system, according
to the brewers [ERC, p. 226].
return to top
After it enacted its Packaging Ordinance in 1991, Germany gained
a worldwide reputation as a pioneer in mandating producer responsibility
for packaging waste. Special provisions of the ordinance also hold
beverage companies responsible for their containers, but the slow
decline of refilling in Germany in the last few years has revealed
the weaknesses of these provisions. One strength of these provisions,
however, is that they apply not only to soft drinks and beer, but
also to water, juice, wine, and milk.
Policy development. Germans have been concerned about packaging
since the early 1970s, when the emergence of beverage cartons and
one-way glass bottles and the concurrent decline of refilling started
the discussion about beverage packaging. The first German waste
law of 1977 authorized the government to regulate markets by ordinances.
In 1978, industry and government made an informal agreement to preserve
the refilling systems that were operating at that time. In 1989,
the beverage industry and government again made agreements to preserve
refilling, with the understanding that regulations would follow
if industry failed to fulfill its obligations. Only six months after
the parties signed these agreements, the government realized that
industry was failing to fulfill its refilling obligations [AGC,
p. 31]. In response to industry's failure, the government enacted
a deposit law for one-way PET bottles in 1989 [HW].
Observing the industry's inexorable transition to one-way containers,
the government began drafting an ordinance to preserve refillable
beverage containers in the early 1990s. In spite of aggressive opposition
from the beverage and the packaging industries, the 1991 Packaging
Ordinance became law that year. The ordinance requires the beverage
industry to package at least 72 percent of the volume of its products
in refillable containers [AGC, pp. 31-32]. Containers of water,
carbonated soft drinks, fruit juices and other non-carbonated soft
drinks, beer, and wine are subject to the beverage packaging provisions
of the ordinance. If less than 72 percent of all of these beverages
combined is packaged in refillable containers during a given year,
then the government conducts a survey of beverage packaging over
the following year. If this survey reveals that the 72 percent quota
again is not met, then those types of beverages that did not meet
their individual quotas are subject to a mandatory deposit. Under
the deposit provision, producers of these non-complying beverages
must establish deposit-return systems and thus must forfeit their
option to have Duales System Deutschland or a similar recycling
organization recover their one-way containers. For one-way containers
whose capacity is 1.5 liters or less, the mandatory deposit is 0.25
Euro; for larger containers, the deposit is 0.50 Euro. The individual
quota for each beverage is the percentage of that beverage that
was packaged in refillable containers in 1991. These percentages
are the following: water, 91; carbonated soft drinks, 73; juices
and other non-carbonated soft drinks, 35; beer, 82; wine, 29. The
Packaging Ordinance treats milk separately by requiring dairies
to package 20 percent of their milk in refillable containers [PKGO][ZU].
Although the volume of beverages packaged in refillable bottles
increased after the ordinance became effective in 1991, the volume
percentage decreased because the growth of the beverage market outpaced
the growth of refilling. In 1997, this percentage fell below 72
percent for the first time because of the increasing prevalence
of beer cans and of one-way mineral-water bottles. The combined
market share of beverages in refillable containers was 71.3 percent
in 1997 and was 70.1 percent in 1998. The beverage industry's failure
to meet the quota for two years in a row stimulated discussion in
Germany about alternative policy instruments to stop the decline
of refilling. One alternative that the government and some environmentalists
favored is a Danish-style tax on all packaging. For any given beverage
container, the amount of the tax would be based on the environmental
impacts and resource demands of the container material [KJDL, p.
21]. Another alternative, tradeable permits, was also discussed.
Under a tradeable permits system, beverage producers would have
to buy permits for a fixed quantity of one-way containers [EUPN].
The tinplate industry contributed to the discussion by supporting
a proposal for a "flexible packaging mix" of both one-way and refillable
beverage containers and for the refilling or recycling of 90 percent
of all beverage containers [AGVU]. This industry has supported this
plan apparently as a Trojan horse for a complete transition to one-way
containers.
In spite of the many suggestions about policy instruments, in 2000
Environment Minister Jürgen Tritten proposed a variation of
the existing law. Tritten proposed to require a deposit simply for
all beverages except wine rather than for only those beverages whose
packaging did not comply with the ordinance. Tritten's proposal
also called for the abolition of the quota [JT], leaving only the
proposed mandatory deposit on one-way containers to stop the decline
of refilling. A third component of the proposal classified beverage
containers as ecologically advantageous or ecologically disadvantageous
rather than as refillable or non-refillable and exempted ecologically
advantageous containers from the mandatory deposit [GOGP]. The classification
of a particular type of beverage container was to be determined
by results of life-cycle analysis (LCA) studies. Surprisingly, a
recent German LCA study had concluded that disposable cartons are
ecologically comparable to refillable bottles, and thus cartons
would have been exempt from mandatory deposits [OKO][CDD].
In early 2001, the Federal Environment Ministry and the Federal
Ministry of Economics and Technology agreed on the proposal for
a mandatory deposit law [JT], and the Federal Cabinet approved it
in May [CDD]. In July 2001, the Bundesrat narrowly rejected the
proposal. In response to the Bundesrat's vote, Environment Minister
Trittin said that he would uphold the existing law to require deposits
on only those beverages whose packaging mix did not satisfy their
quotas [CRI][WAFG]. Under the existing Packaging Ordinance, the
quotas remain in force, and one-way containers of beer, wine, and
water will be subject to a deposit in early 2002 [CDD][CRI][PKGO].
Results. Although the Packaging Ordinance has not stopped
the slow decline of refilling, it has had some positive effects.
The 1999 percentages of beverages packaged in refillable containers
are respectable figures that show refilling is still very prevalent
in Germany. Unlike other European countries with refilling laws,
furthermore, Germany has maintained noticeable levels of refilling
for many types of beverages--not just beer and soft drinks. The
following bar graph shows the levels of refilling for the types
of beverages whose packaging is subject to the quotas [ZU].

The bar graph clearly reveals which beverages--water, beer, and
wine--will be subject to a mandatory deposit because their packaging
did not meet their respective quotas. Generally, the percentage
of beverages in refillables slowly increased after 1991, peaked
in 1993, and declined after 1993 [PR97]. The Packaging Ordinance
not only increased refilling slightly but also encouraged many medium-sized
beverage companies to invest in refilling systems [JT]. These new
refilling systems certainly created some jobs. Refilling has indeed
boosted employment in Germany's beverage and packaging industries,
according to a 1993 study. Of the 161,000 jobs that are directly
connected to the manufacture and filling of beverage containers
and to the distribution and selling of packaged beverages in Germany,
73 percent involve refillable containers. In that case, if one-way
containers completely overtook refillables, then 53,000 jobs would
be lost. If a transition occurred in the opposite direction, then
27,000 new jobs would be created by moving completely to refilling
[AGM, pp. 71-72].
Outlook. If current trends continue, the packaging of both
carbonated and non-carbonated soft drinks may not meet their respective
quotas in the near future, and then all beverages except milk will
have their one-way containers subject to a mandatory deposit. Other
than the threat of a mandatory deposit, the Packaging Ordinance
has no fines or other penalties for failing to meet the quota [PKGO].
The lack of such penalties leaves the government with no way to
enforce the quota and with only a deposit law to stop the decline
of refilling.
Many experts have doubts about the effectiveness of the deposit
law. First, the deposits would not give beverages in one-way containers
a price disadvantage. In addition, neither retailers nor producers
will have an economic incentive to favor refillable containers [AGM,
p. 81], and deposits do not address the factors that have been contributing
to a decline in refilling [GAPO]. Nevertheless, Environment Minister
Tritten believes that deposits will promote the use of refillable
containers and considers the deposit law a market-based alternative
to a ban [JT]. Tritten and other refilling advocates in Germany
might be encouraged by a 2000 poll which found that 69 percent of
Germans prefer to buy beverages in refillable containers [DSD].
If current trends continue, however, these consumers may find it
increasingly difficult to exercise their preference.
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While other European nations have taken an economic or a regulatory
approach to preserving refilling, the Dutch have taken a contractual
approach. The Packaging Covenant II is a contract between government
and industry that governs the management of packaging and packaging
waste in the Netherlands. Apparently, the beer, packaged water,
and soft-drink industries have fulfilled their covenantal obligations
to preserve the refilling systems that they have had in place.
Policy development. In 1979, the Dutch parliament passed
a motion which made prevention and reuse the two top priorities
in the hierarchy of waste management strategies. In 1990, the environment
minister introduced the strategy of producer responsibility, which
was given a legal foundation in 1994 by the Environmental Management
Act. The act holds every generator of solid waste responsible for
managing it and authorizes the government to require industries
to take back and recycle their end-of-life products. Rather than
impose regulations, the Dutch government has implemented producer
responsibility by negotiating voluntary agreements with industries.
These agreements, called covenants, are intended mainly for industry
sectors in which laws, licensing, or other government controls already
exist. If an industry does not enter into a covenant or does not
fulfill the terms of a covenant that it has signed, then the government
might impose regulations on that industry. Covenants have been established
also for industry sectors in which the government does not impose
regulations but could impose them. In anticipation of the EU Directive
on Packaging and Packaging Waste, the government and the Dutch packaging
industry signed the Packaging Covenant I in 1991. After the European
Parliament approved the Directive in 1994, government and industry
established Packaging Covenant II in 1997 [KJNL, pp. 1-2].
Covenant II includes a reuse protocol which is intended to preserve
refilling. Under this protocol, beverage producers and importers
cannot substitute refillable with one-way beverage containers unless
they can demonstrate that the environmental impact of their one-way
containers is less than or equal to the impact of their refillable
containers [PCII]. The Dutch soft-drink industry recently tried
to justify a transition to one-way containers. A recent life-cycle
analysis study conducted by the Dutch research institute TNO concluded
that replacing 1.5-liter refillable PET bottles with similar one-way
bottles in the Dutch soft-drink market presented no environmental
advantages. Under the covenant, therefore, the results of the TNO
study imply that soft-drink bottlers cannot replace their current
float of 1.5-liter refillable PET bottles with similar one-way bottles
[NFIB]. Arjan Hess, an environment and packaging manager at the
Dutch soft-drink association NFI, believes that the TNO study favored
refilling because of the short transportation distances in the Netherlands
[DRSC]. Another factor besides geography favors refilling. The Dutch
government subsidizes the water that the beverage industry uses
to wash refillable bottles [EUPN, p. 20].
Results. The covenant has apparently preserved most of the
refilling that was occurring when it was signed. In the Netherlands,
about 75-80 percent of soda pop and mineral water comes in 1.5-liter
refillable PET bottles [DRSC]. In addition, the Dutch consume all
of their packaged beer in refillable bottles [CBMC].
Outlook. Because Covenant II expired on December 31, 2001
[PCII], the government and industry met in 2001 to negotiate a third
packaging covenant which was supposed to become effective in 2002
[RLIN]. Because the Dutch soft-drink industry apparently likes the
marketing and logistical advantages of one-way containers [NFIB],
it may want to weaken the reuse provisions of the packaging covenant.
In 2001, the government was also considering a Danish-style, LCA-based
packaging tax [NDPL].
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Portugal. The decline of refilling in Portugal's soft-drink
market happened over a few years rather than a few decades. For
both carbonated and non-carbonated soft drinks, the market share
in refillable containers plummeted from 88 percent in 1987 to 20
percent in 1997 [AGC, p. 80]. In 2000, the market share was about
13 percent, and one-way PET bottles dominated soft-drink packaging
with 80 percent of the market share [ANI]. The decline of refilling
in the beer industry has been much slower. For packaged beer, the
market share in refillable containers was about 100 percent in the
early 1980s and has remained about 80 percent throughout the 1990s
[AGC, p. 78][CBMC]. Although refilling had begun to decline sharply
in the early 1990s, Portugal did not establish its current beverage
container laws until 1997. Like the Packaging Covenant II of The
Netherlands, Portugal's beverage container laws are part of its
efforts to comply with the EC Directive on Packaging and Packaging
Waste.
Retail sector. Until 1990, refillable bottles dominated
the market in Portugal because they made packaged beverages affordable
to more Portuguese and because most retailers were small stores.
The arrival of supermarket chains and discounters during the 1990s
accelerated a takeover by one-way containers, especially in the
soft-drink market. These retailers have strongly resisted selling
beverages in refillable containers and have been able to undermine
refilling by selling cheap, canned soft drinks from other countries
[AGC, pp. 81-82]. On the other hand, most of Portugal's beer comes
from two domestic brewers who successfully overcame retailers' opposition
to selling beer in refillable bottles [AGC, p. 78].
During the mid-1990s, the rapid decline of refilling and the concurrent
increase of urban solid waste motivated the government to promote
the reuse of beverage containers through its laws on packaging waste.
The laws affecting the packaging of soft drinks, water, beer, and
table wine include the following [KJPG, pp. 2-3].
- No one may put reusable packaging into a bin designated for
municipal trash collection.
- Producers or distributors who sell beverages in refillable containers
must establish a deposit-return system for the containers.
- The beverage industry must meet product-specific quotas for
the packaging of beverages in refillable containers. The quotas
gradually increase from 1997 to 1999.
- Any retailer or distributor who sells a beverage product in
a one-way container must also offer that same product in a refillable
container [KJPG, p. 3]. For this web site, this type of law is
called a "mandatory stocking" law.
- Any retailer who sells beverages in refillable containers must
provide a facility for taking returns [AGM, p. 78].
Although these laws together regulate the three parts of the packaging
chain--consumers, producers, and retailers--their inherent weaknesses
have made them ineffective. Because none of the laws requires producers
to package beverages in refillable containers, only those who do
so have their data counted in calculating the percentages that are
used to measure compliance with the quotas [AGC, p. 83]. Moreover,
retailers have cleverly flouted the mandatory stocking law by finding
many unattractive ways to display beverages in refillable bottles.
For those retailers who absolutely refuse to comply with the mandatory
stocking law, the fines do not exceed the cost savings that they
get from their non-compliance. Non-compliance has been allowed by
the government because of the unexpectedly high costs of enforcing
the law [AGM, p. 89].
HoReCa sector. Portugal has enacted separate laws for beverages
sold in hotels, restaurants, pubs, and other locations where they
are directly served to customers for on-premise consumption. These
establishments must either sell all packaged beverages in refillable
bottles or sell them in one-way containers and send all of their
empties to a recycling facility [KJPG, p. 3]. The recycling option
resulted from the EU's pressure on Portugal to rescind its ban on
one-way containers for on-premise consumption [AGM, p. 74]. Hotels
and restaurants have consigned the recovery of their one-way beverage
containers to Ponto Verde, the primary industry organization for
the recovery of packaging waste in Portugal [KJPG, pp. 3-5]. This
deal with Ponto Verde was likely necessitated by the rise of one-way
containers for on-premise consumption, which has traditionally been
a significant part of Portugal's beverage market and has traditionally
favored refilling. However, the dominance of one-way soft-drink
containers in the retail sector [AGC, p. 81], and the absence of
refilling in the Spanish and French soft-drink and bottled-water
industries [AGC; p. 24, p. 92], may leave Portugal's hotels, restaurants,
and pubs no choice but to serve these beverages in one-way containers.
Because these establishments make up almost half of the beer market
[AGC, p. 78], however, and because one-way containers hold only
about 16 percent of all beer consumed in Portugal [CBMC], refillable
bottles should still be widely available for on-premise consumption
of packaged beer.
Norway. While refillable soft-drink and water containers
are disappearing in Portugal, they command 98.5 percent of the market
in Norway. Among refillables, Norwegians consume almost 97 percent
of the volume of their soda pop and packaged water from 0.5- and
1.5-liter PET bottles. On the other hand, cans have been conquering
the beer market. The market share of canned beer jumped from 0.9
percent in 1998, to 16.6 percent in 1999, and then to 30.5 percent
in 2000. Meanwhile, the market share of beer in refillable bottles
dropped from 57 percent in 1999 to 44 percent in 2000 [BROM]. Two
factors may explain the rising percentage of canned beer. First,
almost 70 percent of beer is sold in stores [BROM], which generally
favor cans and other one-way containers. Second, from 1998 to 1999,
the volume of imported beer doubled [BROM].
Refilling has apparently thrived under Norway's beverage container
tax system, which consists of two components. The first component
is a fixed rate of 0.10 Euro per unit for only one-way containers.
The second is a variable component that applies to both one-way
and refillable containers and specifies a maximum rate per unit
for metal, plastic, and glass. For each type of material, the maximum
rate applies when the return rate for beverage containers is less
than 25 percent. When the return rate is at least 25 percent but
less than 95 percent, the tax is set according to an inverse relation
with the return rate: increasing the return rate decreases the tax
rate per unit. When the return rate is at least 95 percent for beverage
containers of a specific type of material, then the tax rate-per-unit
of the variable component is zero. For 2001, the maximum tax rates
are 0.52 Euro for metal and for glass and 0.31 Euro for PET, and
the actual tax rates are 0.08 Euro for metal and for glass and 0.03
Euro for PET. Therefore, the total per-container tax rates for 2001
are 0 for refillables, 0.18 Euro for cans and for one-way glass
bottles, and 0.86 Euro for one-way PET bottles. Containers for milk,
juice, and still water are exempt [BROM], but cartons have a maximum
rate of 0.13 Euro [NMF]. To promote the return of beverage containers,
Norway has established a deposit law [NWDR]. Both the tax and the
deposit law are authorized by the Product Control Act [NPCA].
The tax system effectively increases the cost of beer in one-way
containers. With a 0.18 Euro-per-unit packaging tax but without
the alcohol tax or the value-added tax, the cost-per-liter of lager
in a 330-ml refillable bottle is 0.87 Euro less than the cost-per-liter
in a 500-ml can, and the cost of a single bottle of lager is 0.76
Euro less than the cost of a can of lager [NWCC]. These cost differences
affect most of the beer market in Norway. About 91 percent of beer
sold there is lager, about 30 percent of beer is sold in 330-ml
refillable bottles, and about 31 percent of beer is sold in 500-ml
cans [BROM].
Belgium. Belgian beer drinkers consumed almost 49 percent
of their beer in refillable bottles, a little over 11 percent from
one-way containers, and about 40 percent from draught in 1999 [CBMC].
To address the environmental impacts of packaging waste, in 1993
the Green Party successfully persuaded the government to establish
eco-taxes on beverage packaging [KJBL, p. 1]. The 0.37-Euro tax
applies to beer and to some types of soft drinks and to all containers
of these beverages except those that qualify as reusable [DB]. To
qualify as reusable, a beverage container must meet the following
standards.
- Withstand at least seven refillings.
- Be sold and recovered through a deposit-return system with minimum
deposits required by law.
- Be effectively reused.
- Wear a label that states the container is reusable and is subject
to a deposit.
One-way beverage containers are exempt from the tax when specific
recycling rates are met. The bottler or distributor pays the tax
and must register with the Administration of Customs and Excise,
and every beverage container that is subject to the tax must have
the registration number and a distinctive mark on it [KJBL, pp.
1-2]. The symbol that marks refillable beverage containers is intended
to clearly distinguish them from one-way containers. However, because
the law does not specify a minimum size for the symbol in relation
to other labelling on the container, a magnifying glass is sometimes
required to see them. The lack of publicity or promotion of the
symbol has also diminished its visibility [AGM, p. 90].
In 2000, the Belgian Green Party again actively participated in
the formulation of eco-taxes by working with the coalition government
to propose changes in beverage packaging taxes. The changes involve
increasing the per-liter eco-tax rates on one-way containers of
beer, wine, liquor, juices, carbonated soft drinks, non-carbonated
soft drinks, and packaged water. Under the proposal, furthermore,
increases in the eco-taxes would be offset by decreases in other
beverage taxes. The eco-tax will increase by 0.18 Euro for beer,
by 0.10 Euro for packaged water, and by 0.13 Euro for both carbonated
and non-carbonated soft drinks. Under the new tax scheme, 330 ml
of beer would cost 0.66 Euro in a one-way container but only 0.59
Euro in a refillable container. A 1.5-liter soft drink would cost
1.30 Euro in a one-way bottle but only 1.10 Euro in a refillable
bottle. In March 2001, the government was still preparing the tax
proposal for approval by the executive and the parliament. If it
is approved, the eco-tax scheme for beverages will replace the old
one on January 1, 2002 [RBET].
Sweden. Although Sweden abolished its beverage container
taxes in 1993 [ERC, p. 217], most of the effects of that policy
instrument are still visible in that country's beverage market.
About 82 percent of packaged water, 54 percent of soda pop, and
24 percent of beer is sold in refillable bottles [SBA]. The Swedish
Brewers Association has reported that it is unaware of any significant
impacts that the abolition of the tax has had on refilling [ERC,
p. 220]. However, promoting refilling was originally not the main
purpose of the tax. In 1973, Sweden implemented the tax on beverage
containers in order to replace the loss of revenue that resulted
from a price freeze on food. Bottlers, brewers, and importers paid
the tax for almost all soft-drink and alcoholic-beverage containers
that they used. The amount of the tax was less for containers that
were subject to a deposit. The country abolished this tax in 1984
and soon replaced it with a tax scheme that affected only containers
that were subject to a deposit. This tax was effective until 1993,
when Sweden abolished it and implemented producer responsibility
regulations for a wide variety of packaging. This approach to waste
prevention made the tax seem obsolete, and European Union laws made
the tax seem illegal [ERC, p. 217]. In fact, Sweden's laws on packaging
and packaging waste now do not include any provisions specifically
for refillable beverage containers [AGC, p. 104].
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