In reporting its interim results today, the company admitted the problems with the deposit scheme in Germany had cost it 20 million. But the company reported that it is working with retailers on “island solutions” to the drastic decrease in the purchase of non-refillable cans that resulted from the scheme.
Germany's government introduced the deposit scheme in January 2003 to encourage consumers to reduce waste by using refillable containers rather than single-use packaging.
Previously, there had been an eight cent deposit on refillable containers (such as plastic and glass bottles), which was refunded when those containers were returned. But because of a decrease in the amount of refillable containers being purchased by German consumers, the government then introduced a more expensive – 25 cent – deposit on single-use containers such as cans.
The apparent flaw in the plan was that no national system was established to collect the single-use containers, and consumers were therefore obliged to seek the return of their deposits at the point of sale. However, this meant that many containers were not being returned, and led to a drop in sales of drinks in single-use containers.
The move was branded “chaotic” by the Association of European Producers of Steel for Packaging (APEAL) shortly after its introduction (see letsrecycle.com story), saying that there would be a drop in industry turnover of 1.2 billion euros (800 million).
The deposit scheme was also blamed by Germany's packaging waste recycling organisation DSD for a 300,000 tonne drop in the country's packaging waste recycling rate (see letsrecycle.com story).
Rexam, which produces more than 40 billion cans a year at 19 plants in Europe and 17 plants in the US, has now said it is working with German retailers to help provide return systems for single-use packaging.
Island solutions
The company explained: “In Germany there is still no nationwide infrastructure for the collection and clearance of one-way beverage containers following the introduction of the deposit legislation at the start of 2003. In the absence of a national system, a number of retailers are establishing their own return systems for one-way beverage packaging.
It continued: “We are actively participating in these so-called “island solutions” which involve us providing distinctive packaging for a particular retailer.”
One of the retailers Rexam is working with is NETTO. The island solution means that the system will only pay consumers if they return cans registered with NETTO. No deposit will be returned for single-use containers that aren't registered with the point-of-sale retailer.
Rexam said that while it doesn't expect an immediate political solution to the problems, the island solutions mean beverage cans are now “returning to the store shelves in Germany”.
Overall, Rexam reported today that its financial results were “improved” through efficiency drives across the globe, leading to a 19% increase in profit before tax. In the UK, Rexam manufactures glass bottles from recycled glass at its plant in Barnsley. The interim results showed that European glass production has enjoyed a 5% sales increase in the six months up to June 30, 2004.
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