A recycler fears trashing of its monopoly John Schmid – International Herald Tribune, Friday, July 12, 2002

Germany’s king of the heap:

FRANKFURT As societies struggle with the mountains of garbage they produce, Germany looks like an environmentalist’s promised land.
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A decade ago, this refuse-obsessed country spawned a program known as the Green Dot, or Gruener Punkt, which calls itself the world’s biggest recycling project.
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By some measures, it is also the most ambitious and costly. According to the Organization for Economic Cooperation and Development, Germans recycle a full third of their household trash, the highest share in any industrial country except Luxembourg.
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But these days the Green Dot’s biggest threat is not the proliferation of plastic. Its owner, Dual System Deutschland AG, is fighting to defend its environmental idealism against the free-market forces of the country’s E40 billion garbage market.
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The Brussels-based European Commission accused DSD last year of abusing its monopoly position and issued two separate rulings designed to force competition on the massive incumbent. Then last October, agents from Germany’s Federal Cartel Office, armed with search warrants, raided DSD’s offices in Cologne in an investigation of suspected antitrust violations. The agency continues to comb through the confiscated files.
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DSD, which is a nonprofit corporation, also now must contend with the emergence of at least two formidable for-profit competitors. Each start-up claims it can do the job more cheaply than DSD.
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While DSD freely admits that it has high costs, it accuses its rivals of “cherry picking” – collecting and recycling only the easiest and biggest items. DSD says the competitors would rely far more on waste incineration. While DSD takes as much as it can and burns as little as possible – the roughly 10 percent that slips through its meticulous sorting process – Belland Vision GmbH burns up to the legal limit of 40 percent of plastics collected.
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Fighting back, DSD has appealed one of the EU rulings and filed a stack of lawsuits against both competitors. They, in turn, complain that the suits impede their entry into the market.
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Wolfram Brueck, the chief executive of DSD, says that a free-for-all “price war” for reusable trash services could cripple his pioneering company.
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“Politicians now must decide if they want a Dual System that collects packaging near every home in every corner of Germany, that invests in modern technologies and that enforces responsibility among manufacturers,” Brueck said. “Or do they value competition exclusively as a price war that the Dual System cannot withstand.” In a worst-case scenario, unbridled competition would mean “the collapse of the system,” DSD contended.
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Some observers say DSD is simply maneuvering to guard its” dominant position in the German market. “DSD has a monopoly and they want to keep it,” said Peter Michaelis, a professor of environmental resources at the University of Augsburg.
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Still, environmental activists are watching closely. Because a disposable plastic fork lasts longer than, say, a Michelangelo sculpture, they laud DSD for its E10 million annual research into the often uneconomical business of used plastics.
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If DSD is forced to scale back its high standards and investment, some fear it will lose its ground-breaking role just as it claims to be on the verge of new breakthroughs.
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“Critics say the system is too expensive and the environmental balance does not justify collecting everything,” said Christian Hey, an official at the Berlin Institute for the Environment. But if the new equipment works as well as DSD hopes, “it justifies the infrastructure that has been built up,” Hey said.
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Unlike the United States, where each city runs its own recycling program, the Green Dot reaches almost every doorfront and business in the world’s No. 3 economy. And it collects any packaging adorned with the ubiquitous little green swirl: drippy shampoo bottles, milk cartons, gum wrappers and foil trays from a take