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“A wolf in sheep’s clothing”

Cologne, 28.05.2014

...is one of the objectives of the CDU-SPD coalition government – or at least that is what it says in their coalition agreement. However, the text of the 7th amendment to the German Packaging Ordinance issued by the Federal Government displays very little of this sentiment, and unfortunately there did not seem to be anyone in the German Bundestag – whose committees this amendment left last week – willing to stand up for the principle of competition. Quite the opposite, in fact. The proposal being promoted by the government and the governing parties as the best possible solution would actually result in sharply reduced competition. There is no question that it is necessary to close the loopholes in the packaging licensing process, but practically doing away with competition is certainly not necessary.

The parties involved have submitted a series of constructive proposals over the past weeks and months with an aim to reconciling these objectives, yet their voices have not been heard. The current draft places such heavy restrictions on industry solutions that they are practically eliminated, meaning that there would be nothing to distinguish between the dual systems in future. Instead, price alone would be the deciding factor. Due to the fact that the system with the largest market share naturally also enjoys the best purchasing conditions, this system will be able to set the prices for industry, trade and disposal companies. The result: significant price increases and a marked strengthening in the market position of a single company. Well, we have certainly had a monopoly situation in Germany before, but it is questionable whether this was the desired outcome of the current debate.

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