Estonian Competition Authority

As the result of the proceedings of the Competition Authority it became easier for companies to market deposit-subjected packaging

During the supervision procedure the Competition Authority analyzed problems that arose in connection with the new standard terms and conditions established by Eesti Pandipakendi OÜ (hereinafter – EPP). EPP is a recycling organization accredited by the Ministry of the Environment, whose goal is to organize a nationwide collection of beverage packaging and packaging products on the territory of the Republic of Estonia.

The difference in the excise rates in Estonia and Latvia has led to the situation, where large quantities of alcoholic beverages marketed in Latvia using Estonian deposit labels are purchased in stores situated close to Estonian-Latvian border. The products are then consumed in Estonia and the packaging is returned to the Estonian deposit system. Since the packing is marketed in Latvia, packaging companies have not paid EPP for these packages. However, the packages are marked with deposit labels, so it was possible to get a deposit from EPP upon their return. In order to avoid losses, EPP introduced new standard terms, according to which packaging companies had to mark packages of alcoholic beverages with different labels depending on whether the product was sold in Estonia or outside Estonia. The overwhelming part of the damage to EPP results from return of exported tin packaging. At the same time, due to the new procedure, companies that do not use tin packaging and therefore do not cause damage to EPP are also subjected to additional expenses. In the course of the proceedings, such companies were allowed, under certain conditions, to continue to use only the national deposit label, including for exports. This greatly improved the competitive situation.

In addition, the Authority analyzed the increase in the registration fee for the packaging unit from 35 to 60 euros. In the course of the proceedings, the registration fee for the packaging unit was reduced to 52 euros, but according to the Competition Authority, the costs associated with the registration of the packaging could be reduced further. At the moment, the packaging has to be physically delivered for registration, while, for example, the cost of electronic registration would probably be lower. The Estonian Competition Authority therefore recommended that by 1 February 2018 EPP develops possible solutions for web-based registration.