As is the case every year, licensing is currently due for all sales packaging put into circulation. We wanted to know how the players in the market assess the developments in the area of packaging licensing, what impact the aspect of inflation-related price changes has and what financial leeway remains at all. The developments of recent years and months show that There are differences, which is why companies should check and compare price and service offers for their viability.
The situation is tense: rising prices, high inflation rates and, as a result, pronounced price sensitivity among consumers. This is putting pressure on the markets. In many sectors and product areas, it is therefore now a matter of cost structure and each individual price segment more closely. We did just that and took a closer look at the cost factor of packaging licensing: Among other things, we launched a survey of the dual systems - and almost all of them explained their positions.1)
All companies that place goods on the German market on a commercial basis are required to fulfil the Packaging Act (VerpackG) to register in the LUCID Packaging Register, regardless of the type and quantity of packaging in question. In addition to producers, this can also include trading companies, importers of packaged goods or mail order and online retailers if all requirements are met.
For the expected packaging quantities Licence agreements concluded for their disposal will be. Based on current knowledge, it is estimated that around ten per cent of the 300 relevant top companies are signing or have signed contracts for more than two years. However, the vast majority of the obligated companies (a six-figure number) circulate such small quantities of packaging that it does not appear to have been worthwhile for these companies to deal with this legally complex issue every year. This also applies in particular to customers with very small contracts, who often conclude contracts online.
The market is witnessing a Declining volume of packaging involved due to weak or negative economic growth and lower consumption of packaging in the household sector. The fact that purchasing power is declining sharply and that many households are operating at the limits of their budgets plays a role here. The required changes in packaging design also play a certain role.
In view of the energy situation, it is almost impossible to calculate the effects of energy price trends. Equally significant are the high transport costs incurred during collection and on the recycling routes. Wage and labour costs are also increasing significantly and, last but not least, the costs for documentation (§ 21), volume flow records, administration and service are rising. In addition, very high investments for fire protection and sorting technology currently have to be made in modern and industrially operated sorting facilities, which are also included in the calculation of sorting prices.
„One The globalised commodity markets form an important part of the cost calculation, as the proceeds for recyclable materials have a price-reducing effect. However, these markets are very volatile and, following comparatively high prices at the beginning of 2022, we are currently seeing a Weak demand for recycled raw materials and therefore also a very low price level. The has a price-increasing effect on the calculation of licence prices. This is driven, among other things, by the high availability of internationally available and very favourable primary raw materials,“ explains Markus Müller-Drexel, Managing Director of Interseroh+. Even the indices for waste paper, a raw material that is actually in high demand, are far below expectations.
The competition between the dual systems has created permanent movement. The According to a calculation by the German Federal Cartel Office, operational disposal costs fell by a full 54 per cent between 2003 and 2011, There are apparently no statistically reliable figures on the further development. After some ups and downs, there has also been a slight fall in prices in recent years. The tenor of some market players is that, despite the momentum, many customers are still stuck in old contracts. „It is estimated that 15 to 20 per cent of distributors pay too much money for packaging licensing. And these are above all the Companies that do not renegotiate annually or obtain comparative offers, but have not retendered their licence agreements for many years,“ was the comment from one dual system. „These companies have not benefited from the positive price developments.“
Some voices from the industry describe the Prices for 2023 no longer cost-covering. Here, the existing competition seems to have put the brakes on price adjustments. However, the underlying price calculations within the industry are not always comprehensible. „From our point of view, in recent years ‚the Licence price‘ increasingly under pressure: a sign of functioning competition. We would also describe the fierceness of competition as increasing,“ said other voices from the ranks of the dual systems. Several have already increased their prices during the year due to the current situation. The sum of these factors will mean that providers will most likely have to adjust their prices for 2024.
The aim of the Packaging Act is to Promote high-quality recycling to conserve resources and reduce the impact of packaging waste on the environment. This can only succeed if companies design their packaging to be recyclable and if it is actually utilised in practice. This means that it is not only packaging manufacturers who have a duty to improve recyclability; plant technologies, process technologies and their capacities must also be adapted to the respective requirements. Classification of the actual sorting and recycling capacities should be more clearly defined. This is the only way to generate interest in building up recycling capacities. In fact, these are declining for individual packaging materials, and this needs to be counteracted,“ is the position of the ZSVR.
Compared to the Packaging Ordinance the Packaging Act requires significantly higher recycling rates, which were even increased again in a second step in 2022. „The higher recycling rates require more in-depth sorting, This has also had an impact on the participation fee in the form of higher prices in recent years,“ emphasises Diana Uschkoreit, Managing Director of BellandVision.
Section 21 of the Packaging Act contains a provision on the ecological organisation of participation fees. This is not considered to be sufficiently effective and should be developed further if possible. There are therefore Consideration of whether, for example, a fund should be set up to which manufacturers of packaging that is not highly recyclable contribute must.
The Packaging Act grants public waste management authorities far-reaching co-determination rights for the collection of used packaging, for example in which containers (bags or bins) and at what frequency used packaging is to be collected. These Co-determination rights not only have an influence on collection quality, but also on costs. Since 2019, the yellow bag has been replaced by the yellow bin in many collection areas. This changeover had a direct impact on costs and therefore also on participation fees, not only in terms of acquisition but also in terms of ongoing operation. The Yellow bags can be collected much faster than emptying each individual yellow bin.
The costs for collecting and sorting packaging are identical regardless of its recyclability. In order to achieve an effect in the direction of more sustainable packaging, the Dual Systems have proposed a fund solution that has already been presented to the relevant bodies and could be included in an amendment to the Packaging Act. This could lead to a targeted promotion of innovative technologies and the use of more recyclable packaging contribute.
A recent study by the GVM Society for Packaging Market Research and the ifeu Institute for Energy and Environmental Research Heidelberg gGmbH analysed and predicted that the packaging consumption has already peaked in 2021 and will continue to decline in the coming years. will be. „According to our forecast, the total investment volume will decline significantly in 2024: GVM forecasts that 2024, based on current knowledge, a decline in packaging consumption for lightweight packaging (LDPE) of between four and five per cent, The market for glass is around two per cent and for PPK between one and two per cent,“ says Kurt Schüler, Managing Partner of GVM Gesellschaft für Verpackungsmarktforschung, Mainz.
Several representatives of the dual systems also see a significant decline in absolute packaging volumes. Nevertheless, as the entire recording infrastructure must be maintained, these volume effects lead to a relative increase in the individual licence prices.
The decisive factor will be, on which packaging quantities the collection costs will be distributed in future. Those who rely on higher market volumes can offer their licensing customers lower prices, but may end up paying more. Those who assume lower market volumes may calculate more realistic prices, but will not convince their customers.
In order to avoid contradictory signals for packaging design due to diverging national regulations, the European circular economy package provides for a differentiation of licence fees. The recyclability of packaging is seen as the decisive criterion for eco-fee modulation. EU-wide harmonised standards are essential in order to avoid obstacles in the EU internal market. EPR fees and licence fees should be designed in such a way that they Create financial incentives for the recycling-friendly design of packaging and enable costs to be allocated according to the polluter-pays principle. This is not yet acute (in Germany), but this aspect should be included in the considerations. At some point, it will cost real money if packaging cannot be recycled properly. Or it will no longer be allowed on the market - at least that is what the European Packaging & Packaging Waste Regulation (PPWR) provides for.
The market is on the move, now more than ever. The unanimous opinion of those surveyed is that this applies to the costs of disposal as well as to the price development for the participation of packaging in the dual systems, which are characterised by strong competition. The dynamics of the influencing factors will show which forecasts prove to be viable in the course of the coming year. From today's perspective, the sum of the factors will lead to the Suppliers are likely to adjust their prices for 2024 have to. If you don't hear from your dual partner now, you should wake up. The recommendation remains: Check and compare the viability of price and service offers.
1) We were frequently asked to use the information only as background information. With this in mind, different positions have been incorporated into our considerations (the editorial team is aware of the sources for all statements).
