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Business

German Beverage Industry Balks at Can Deposit

In a surprise move, Germany’s beverage industry said it will no longer build an expensive nationwide deposit system for cans and plastic bottles that was supposed to simplify the recycling of non-refillable containers.

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A deposit of 25 cents is currently levied on all canned beverages in Germany.

Since it came into effect at the beginning of the year, retailers and the beverage industry have been loath to go along with new German legislation that requires consumers to pay a 25-cent (29 U.S. cents) deposit on almost all single-use cans and bottles.

While the government hopes to increase recycling, the business community has complained the scheme is inconvenient for consumers and excessively costly to retailers and bottlers.

The industry is now balking at setting up an expensive network of deposit machines by October 1, saying on Tuesday there wasn’t a proper legal framework to justify the billions of euros investment.

“In our estimation, over the past five months the mandatory deposit on single-use drink containers has caused dramatic market distortions leading to existential dangers for firms and jobs,” said Peter Traumann, chairman of the German Food Industry Association, in a statement. “We’re afraid this trend will continue if conditions don’t change.”

Although the industry has made no secret it would like to kill the can deposit altogether, the latest row was sparked by a letter to German Environment Minister Jürgen Trittin by European Commission officials who are concerned the present awkward system unfairly penalizes non-German beverage companies.

Present system a mess

The current system has proven highly unpopular with both retailers and consumers alike, because in order to get back the hefty deposit on a can of beer or bottle of soda, you have to take the container back to the place of purchase.

Trittin and other officials say the industry has only itself to blame, since it had nine months before the law went into effect to build a nationwide network of recycling machines. On Wednesday, Trittin dismissed the industry’s stand as “ridiculous” and only an “excuse” to torpedo the deposit.

Umweltminister Jürgen Trittin ohne Bart

Jürgen Trittin

“There is no conflict between the federal government and the EU Commission,” Trittin told the German news agency DPA.

Trittin said the letter from EU internal market and environment commissioners, Frits Bolkestein and Margot Wallström, only criticized that the recycling network was not yet in operation and questioned if it could not be introduced sooner.

In an interview with the Financial Times Deutschland newspaper published on Thursday, Wallström backed up Trittin's description of the missive. "The purpose of our letter was to get the industry to build out, as quickly as possible, a nationwide can return system that would allow people to return their empty cans to any store," the EU environment minister told the paper.

Wallström said the industry's interim system violated EU regulations, creating a competitive disadvantage for foreign distributors and customers and demanded a clarification from the German government on what steps were being taken to insure that the permanent can return system would be in place by October 1.

Many of Germany’s discount supermarkets have removed one-way bottles and cans from their shelves and some retailers have stopped charging the deposit altogether because of the hassle involved and the anger from customers.

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