Competition regulators are being urged to investigate the possibility of illegal restrictive practices in the UK’s extended responsibility scheme for aluminium packaging.
Concern has been raised by the Advisory Committee on Packaging (ACP) over the current price for packaging recovery notes (PRN/PERN) which has risen to around £100 per tonne despite data showing targets for the year are likely to be achieved comfortably. Such prices are only usually seen when targets are being missed.
By the end of Q3, some 76 500 tonnes of aluminium recycling had taken place against the full year target of 94 500 tonnes and it had been assumed that a significant year-end surplus was likely.
Restrictive practice alleged
The UK’s Packaging Waste Regulations rely on accredited reprocessors and exporters making PRN/PERNs available for packaging waste they have been responsible for recycling. By being accredited, operators are able to gain additional funding to support recycling activity.
ACP points out that where a small number of accredited exporters and reprocessors are responsible for significant volumes of recycling, notes can be withheld, distorting the market and leading to price escalation.
In a letter the Competition and Markets Authority, Phil Conran, the ACP chair, said accredited operators appeared to be applying restrictive practices, resulting in producers being forced to pay unreasonable costs for PRN/PERNs to avoid non-compliance, without any clear additional environmental outcome.
Potential illegal activity
‘Agencies are unable to take any action to force accredited operators to place the PRN/PERNs onto the market, thus limiting any action against restriction of the supply of evidence,’ he wrote. ‘The ACP has therefore requested that the Competitions and Market Authority investigate the PRN/PERN market to determine whether any illegal activity, potentially in the form of restrictive practices, has taken place.
‘We will also be working with Defra (government environment department) and the agencies to consider options to create a more stable system in the immediate future and hope that this will be seen as a positive move to maintain confidence in the PRN system.’
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