Packaging Ordinance Making the Polluter

The principle of 'the polluter pays' once seemed far-fetched, a pipe dream of radical environmentalists. But as the rest of the world watches, the notion that sellers should be responsible for the environmental costs of their products is being put to the test in Germany. The Packaging Ordinance (Ver-

stores are no longer required to take back huge mounds of primary sales packaging. However, there's a catch: to be eligible as DSD rubbish, a sales package must have the green dot. So, not surprisingly, retailers are reluctant to carry products without the green dot. Further, there is a growing preference among German consumers for recyclable packaging materials, and for less packaging in general.

packungsordnung) makes private

Industry responsible for the collecting, sorting and ultimate recycling of packaging waste.

The legislation deals separately with three different kinds of packaging:

• primary packaging: the container that holds the product, like a perfume bottle.

• secondary packaging: outer material whose main function is point-oi'-purchase display and protection during shipping, like the box around the perfume bottle;

• transport packaging: the carton or crate used to ship the perfume to stores.

The ordinance decreed that alt three types of packaging must be taken back by retailers and returned to manufacturers - a daunting prospect for both parties. However, it allowed that tf the industry could come up with an alternative, then retailers would not have to take back the first and by far the largest category of waste, primary sales packaging.

The industry's solution was the Dual System (DSD), a non-profit company set up by German businesses that collects waste directly from consumers in addition to the country's municipal collection systems, DSD is funded by licensing fees for the now widely used green dot; a green arrow emblem indicating that a package is collectible by DSD. Now, rather than tossing their packaging out with the municipal rubbish, for which they must pay a fee, consumers can take it to a nearby yeliow DSD bin to be collected for free.

Under the DSD system, although they must still collect secondary and transport packaging,

Marketing

Highlight

Thus, the Packaging Ordinance wiJl strongly affect how companies package their products for the German market.

The ordinance puts the 'polluter pays' principle to work by creating incentives rather than through direct regulation. Unlike other £11 countries, Germany has no ban on specific packaging materials. Instead, green dot licence prices are based, in part, on the difficulty {if recycling a particular material. This sets market mechanisms in motion. If a given packaging material is costly to recycle, the price of using it will rise and companies will switch to something else. Thus, the ordinance is stimulating companies to find imaginative ways to market goods with less packaging. Golgate, for example, designed a toothpaste tube that stands on its head on store shelves without a box. Hewlett-Packard redesigned the chassis for its workstations and personal computers, reducing transport packaging by 30 per cent.

The major problem with the landmark German recycling programme is the lack of a market for recycled material. Notes one packaging expert: 'There seems to he widespread belief in the trash fairy, who comes overnight and turns garbage into gold for free ... [But] when you're talking trash, it's difficult to believe that anyone will pay for it.' In fact, it's no secret that much of the packaging collected in DSD bins is not being recycled, but rather is piling up in warehouses or being exported. When German plastics turned up in French dumps and incinerators, it caused ,1 Europe-wide scandal.

Still, the ordinance serves as a wake-up call to both businesses and consumers, in Germany and around the world. It says, 'Hey folks, we've got a problem, and something must be done about it.'

And despite its flaws, the ordinance does seem to be moving the country rapidly towards its goal of waste reduction. For example, during the first three years under the new system, total household waste production fell by more than 10 per cent, while recycling quantities increased by 90 per cent. Germany collects, sorts and recycles 60 per cent of its post-consumer plastic-packaging waste, well ahead of the 35 per cent target. Producers and retailers are now working together to help solve environmental problems.

France and Austria have passed similar legislation, and France has begun using the green dot, although with a different collection system. In Germany, new ordinances are on the horizon, including ones for mandating producer take-back of cars and electronic equipment. The EU is now working on a directive that would set minimum standards for recycling in all of its member states, 'it may take another year or two, but the train is running,' assures one German ministry official. 'The idea of product responsibility is spreading around the world.'

SOURCE: Adapted from Marilyn Stern, 'Is this the ultimate in recycling?1 Across ihcBoard (May 199,1), pp. 28-31. See also Peter Sibbald, 'Manufacturing for reuse,' Fortune, (6 February 1995), pp. 102-12; 'Plastics waste: Germany beats recycling targets,' Chemical Week (5 June 1996), p. 22.

Table 6.1

UK socioeeonomie classification scheme

Table 6.1

CLASS NAME

SOCIAL STATUS

OCCUPATION OF HEAD OF HOUSEHOLD

% OF POPULATION

A

Upper middle

Higher managerial, administrative or

professional

3

B

Middle

Intermediate managerial, administrative or

professional

14

Cl

Lower middle

Supervisors or clerical, junior managerial,

administrative or professional

27

G2

Skilled working

Skilled manual workers

25

D

Working

Semi-skilled and unskilled manual workers

19

E

Those at lowest

State pensioners or widows, casual or

levels

lower-grade workers of subsistence

12

SOURCE ; Office of Population Censuses and Surveys.

SOURCE ; Office of Population Censuses and Surveys.

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