Today the Bundeskartellamt has published the findings of its sector inquiry into compliance schemes ("dual systems") which was launched in July 2012. The report analyses the effects of liberalisation on the market for the recovery and recycling of sales packaging discarded by private end consumers.

Andreas Mundt, President of the Bundeskartellamt: "Eight years ago there was only one compliance scheme which was run by DSD. With a number of competition enforcement measures this monopoly has been gradually transformed into a competitive market. The competition which has since developed between nine service providers in Germany has led to substantial cost savings and improvements in the quality of recycling. As a result previous annual total costs of around two billion euros have in the meantime fallen under one billion euros per year. This represents a saving of 50 euros per year for a family of four. The costs of the collection of waste packaging from households and its recycling are ultimately passed on to the consumer in the prices which manufacturers charge for their products."

The opening up of this sector to competition was accompanied by concerns that this could have negative consequences for the quality and reliability of the system. The report proves that the opposite is true. The collection of waste packaging in yellow bins and glass containers functions as well as before and recycling quotas have not fallen. In addition to the substantial savings in costs, the introduction of competition to this sector has also unleashed a wave of innovation in technology for sorting the mix of waste material in the yellow bin. The use of this modern sorting technology not only reduces costs but due to the improved levels of sorting enables higher quality recycling.

The Federal Government plans to change the legal framework conditions for this sector (replacement of the Packaging Ordinance with a new law on recyclable material). In spite of the success of liberalisation, municipal waste management providers and to some extent the private waste management industry are still calling for the elimination of competition between compliance schemes. They suggest that the awarding of contracts for disposal services be transferred from the compliance schemes to a "central agency" or the municipalities.

President Andreas Mundt: "In the interests of the citizen the legislator should firmly reject such demands. A renewed monopolisation of the award of waste management services would simply mean a return to the early DSD days under a new label. The result would be higher disposal costs and a loss of innovation. The entrepreneurial interests of the municipalities should not be placed before the interests of the citizen."

The Bundeskartellamt will continue to campaign for competitive conditions in this sector. The sector inquiry identifies some remaining restrictions of competition which need to be removed in future. Where necessary, the Bundeskartellamt will institute individual proceedings to do this.

The sector inquiry was carried out in the context of an OECD initiative, which aims at a more intensive evaluation of interventions by competition authorities. The competition authorities of the OECD member states have declared this one of their strategic priorities for 2012 to 2014. In the sector study on compliance schemes the effects of enforcement measures on a specific market are examined based on detailed data covering a period of 19 years. Such a long-term analysis of the effects of enforcement measures is the first of its kind, even by international comparison. The savings of around one billion euros per year which liberalisation has achieved for the consumer roughly represent 40 times the entire budget of the Bundeskartallamt.

Graphical illustrations and the final document (in German) can be found on the website of the Bundeskartellamt.