Germany's 'Green Dot' Waste Management System


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Case Details:

Case Code : BENV011
Case Length : 21 Pages
Period : 1990-2007
Pub Date : 2007
Teaching Note :Not Available
Organization : DSD GmbH
Industry : Services (Waste Management)
Countries : Germany

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts Contd...

Allegations of Monopoly Abuses

DSD had no collection infrastructure of its own. It had entered into long-term contracts (10-15 years) with local waste management companies as well as municipal bodies to collect and sort waste.

Till 2000, DSD was the only waste collection/sorting option available to German companies. In 2000, a couple of firms had started similar waste collection and sorting systems.

However, as DSD had control over the entire collection infrastructure, competing firms were forced to use its system. DSD also charged the customers of competing firms...

The Deposit Scheme

In early 2003, Germany introduced a deposit scheme for single-use drinks packaging (Refer Exhibit VIII for the logo of the deposit scheme). Under the scheme, both producers and retailers had to charge a deposit of € 0.25 on mineral water, beer, and soft drink packaging and return the deposit when customers returned the empty bottles. However, the scheme resulted in problems for consumers as well as for DSD...

DSD as a For-Profit Organization

In December 2004, Kohlberg Kravis Roberts (KKR) stated that it had offered to acquire DSD and that 95% of DSD's shareholders had accepted its offer. In early January 2005, Deutsche Umwelt Investment AG, a wholly-owned German subsidiary of KKR, acquired 75% stake in DSD for € 260 million. By January 13, 2005, KKR received regulatory approval for the purchase. At the time of purchase, in all the years of its existence, DSD had collected around 57 million metric tons of packaging for recycling...

Outlook

Germany, in the last few decades, had been at the forefront of waste management, in terms of both legislation (Refer Exhibit IX for Some Recent German laws pertaining to waste) as well as implementation (Refer Exhibit X for recycling rates of different materials in Germany). The country was able to achieve a much higher standard of waste management than other developed countries. As of 2006, the waste management industry in Germany employed 250,000 people, including engineers, waste management specialists, refuse collectors and administrative staff. The industry had a turnover of over € 50 billion...

Exhibits

Exhibit I: A Landfill in Northern Germany
Exhibit II: Abridged Version of the Amended Packaging Ordinance
Exhibit III: The Green Dot
Exhibit IV: Sorting Waste in Germany
Exhibit V: Images of Some Products before and after the Packaging Ordinance
Exhibit VI: Change in Residual and Recovery Rates in Germany
Exhibit VII: Per Capita Waste Generation by Country
Exhibit VIII: The Deposit Scheme Logo
Exhibit IX: Some Recent German Laws Pertaining to Waste Management
Exhibit X: Total Packaging Consumption and Recovery Rate of Packaging Waste (as of 2005)
Exhibit XI: DSD Rates in 2007


 

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