The European Commission has granted approval for packaging recycling provider Austrian ARA System to obtain a number of important contracts in Austria.
The decision concerns the use of the "green dot" trademark and ensures unrestricted access for competing systems to the collection infrastructure. The Commission has already adopted decisions concerning similar systems in other Member States, aimed at improving conditions for competition on the growing recycling markets.
Under a European Union directive made in 1994, manufacturers and distributors are required to take back and recycle, free of charge, used sales packaging from consumers. In Austria, as in many other countries, manufacturers and distributors responded by adhering to a comprehensive collection system also known as the "green dot" system. The system takes on the responsibility of collecting, sorting and recycling the packaging waste. Currently ARA is the only relevant provider of this exemption service in Austria. Similar systems operate in other EU member states, suchas Duales System Deutschland in Germany and Eco Emballages in France.
Altstoffrecycling Austria AG (ARA) grants licences for the use of the "green dot" trademark and charges a fee to manufacturers and distributors of packed goods (totalling €155.5 million in 2002). ARA and a system of dedicated branch recycling companies organise the take back and recycling process for certain packing materials and certain parts of the disposal chain. Independent disposal companies, instructed by the various branch recycling companies, then carry out the actual collection and sorting.
No service, no fee
ARA has agreed that the license partners pay a fee only for the collection and recovery service provided by ARA and not for the use of the "green dot" trademark.
Manufacturers and distributors of packed goods can label their products with the "green dot" even if they use the collection and recovery service of an ARA competitor. According to the European Commission, this is important for all companies who sell their products in Member States where the "green dot" is obligatory. Those companies can bring their products to the Austrian market without having to remove the "green dot" trademark from their packaging.
Limited duration contracts
The Commission has granted an exemption as to the collection and sorting contracts of the branch recycling companies ARGEV and ARO with the collector companies. Only one collection and sorting company is assigned a service contract, with a minimum term of three years, for each region and material group, thus blocking market access for domestic and foreign recycling companies. However, the three-year exclusivity can be accepted, to allow the recycling companies to recover the investments necessary to build up the collection infrastructure, the Commission said. ARGEV and ARO also guaranteed to award new contracts via a competitive, transparent and objective procedure for up to five years.
The Commission did attach certain obligations to its decision. These stipulated that ARGEV may not prevent recycling companies from contracting with competitors of the ARA system on the sharing of containers and other arrangements for the collection and sorting of household packaging waste. Thus the access to the disposal infrastructure is guaranteed. This, says the Commission, is of crucial importance for the development of competition on this growing market.