EC Clears Austrian System For Recycling Program

The European Commission granted approval with obligations to a series of contracts concluded by the Austrian ARA System, which operates a country-wide system for the collection and recycling of used packaging. This 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, thereby improving conditions for competition on the growing recycling markets.

Under a European Union directive of 1994 manufacturers and distributors are required to take back and recycle, free of charge, used sales packaging from consumers.

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.

Altstoffrecycling Austria AG grants licenses for the use of the “green dot" trademark and charges a fee to manufacturers and distributors of packed goods (totaling around $180 million last year).

ARA and a system of recycling companies organize the take back and recycling process for certain packing materials and certain parts of the disposal chain.

ARA and the recycling divisions of ARGEV and Altpapier-Recycling Organisationsgesellschaft mbH notified to the Commission a number of agreements in order to get clearance from Article 81 or an exemption. Agreements of similar nature had already raised competition concerns in other Member States.

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. 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.

The Commission has granted an exemption as to the collection and sorting contracts of the two companies, ARGEV and ARO with the collector companies. Only one collection and sorting company is assigned a service contract, with minimum term of three years, for each region and material group, thus blocking market access for domestic and foreign recycling companies. However, the 3-year exclusivity can be accepted, to allow the recycling companies to recover the investments necessary to build up the collection infrastructure. ARGEV and ARO also guaranteed to award new contracts via a competitive, transparent and objective procedure after five years, at the latest.