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].
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.
|Refillable Refilled Twice||Refillable Refilled 20 Times|
|Container Cost||Container Cost Per Filling||Container Cost Per Filling|
|How much cheaper is a refillable in Euros?||-0.064||0.003||0.062|
|Container Price per Filling||Tax per Filling||Total per Filling|
|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].
To obtain an exemption from the levy on beverage containers, the refilling system must meet three main requirements [ERC, p. 222].
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. return to top
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]. return to top
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].
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.
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]. return to top
[ANI] Portuguese Association of the Soft Drink and Fruit Juice Industries (ANIRSF). "Sector Data in Portugal."
http://www.anirsf.pt/eng/stats.asp ILSR converted the association's percentage, whose total counts fountain sales, to a percentage whose total counts only packaged soft drinks and still drinks. (L)
[DAR] One can also symbolically show that the tax magnifies the cost difference between a one-way bottle and a refillable bottle, given the number of fillings required to make the cost of a refillable bottle less than that of a one-way bottle without the tax.
[DB] "Database on Environmental Taxes in the European Union member states, plus Norway and Switzerland." Brussels: European Commission.
[DEPA] Danish Environmental Protection Agency, Ministry of Environment and Energy. "The Danish Government Defends Existing Packaging System for Beer and Soft Drinks--'the Danish Can Ban.'"
[ECPR] European Commission. "Packaging Waste: Commission refers Germany to Court." Press Release 29 March 2001.
[ERC] ECOTEC Research and Consulting, et. al. Study on the Economic and Environmental Implications of the Use of Environmental Taxes and Charges in the European Union and its member states. Brussels: European Commission, 2001. (B)
[OKO] Prognos GmbH, Institut für Energie und Umweltforschung Heidelberg, Gesellschaft für Verpackungsmarktforschung mbH, Pack Force, and the German Federal Environment Agency. Ökobilanz für Getränkeverpackung II Berlin: German Federal Environment Agency, 2000. (B)
[JT] German Federal Environment Ministry. "Federal Environment Minister JŸrgen Trittin: Deposit on Disposable Drinks Packaging from 2002 Will Halt the Advance of the Can." Press Release 27 Feb. 2001.
[PANP] Panimoliitto. "Domestic Sales by Container, %."
http://www.panimoliitto.fi/eng/pdf/gif/container.gif ILSR converted Panimoliitto's percentage, whose total counts fountain sales, to a percentage whose total counts only packaged waters and soft drinks. (L)
[SBA] Swedish Brewers Association. "Shares for Different Packages."
http://www.swedbrewers.se/eng/statistik.htm ILSR converted the SBA's soft-drink percentage, whose total counts fountain sales, to a percentage whose total counts only packaged soft drinks. (L)
[SO3] Government of Denmark. Statutory Order No. 1292 of December 20, 2000. Lov om Ændring af Lov om Afgift af Visse Emballager Samt Visse Poser af Papir Eller Plast m.v. og Lov om Forskellige Forbrugsafgifter og om Ophævelse af Lov om Visse Miljøafgifter. Copenhagen: Retsinformation, 2000. (B)
[ZU] German Federal Environment Ministry. "Trend zu Einweg bei Getränken Setzt Sich Fort Mehrwegquote Sank 1999 auf Weit Unter 70 Prozent." Press Release 24 Sep. 2001.