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I730 - Paper recycling: Comieco commitments accepted and made binding


PRESS RELEASE


PRESS RELEASE

PAPER RECYCLING: ANTITRUST ACCEPTS AND MAKES BINDING COMIECO COMMITMENTS. 40% OF CONSORTIUM-MANAGED WASTE TO BE ASSIGNED THROUGH COMPETITIVE AUCTIONS

 

As a result, approximately 80% of all paper waste collected in Italy (worth 482 million euros in 1999-2009) will now answer to normal competitive dynamics of the open market.

 

40% of the packaging waste controlled by the Comieco Consortium through a managed administration system will now be assigned to paper mills through competitive auctions. This is the result of Comieco (the National Consortium for the Recovery and Recycling of Cellulose-based Packaging) commitments that the Antitrust Authority accepted and made binding to close the investigation into a possible competition-restricting agreement. Thanks to these measures, about 80% of all paper waste collected in Italy (worth 482 million Euros for the period 1999-2009) will now circulate freely and respond to the normal dynamics of competition. The 40% of Consortium-managed waste to be assigned by auction combines with the wastepaper turnover that is already subject to market dynamics as secondary raw material, which is available as such to the Comieco paper factories.

A year ago in March, the inquiry began investigating the system in use to assign paper waste to Consortium paper factories. The Antitrust Authority found the mechanism in question to represent a possible competition-restricting agreement because of the way paper waste (or raw material) was being allocated (pro-quota) to each paper factory, freezing their market shares while fixing prices at the same time.

According to the Authority, auctions for a 40% share should be sufficient to alleviate the competition-related concerns expressed at the outset of the investigation. The remaining 60% of paper waste being assigned pro-quota is justifiable in the name of the public interest in environmental protection, an important need fulfilled by the Consortium. Maintaining a pro-quota percentage also helps prevent paper waste from taking on a value of zero should the auctions ever be abandoned outright, a situation which could transform collection and reprocessing into a cost.

In essence, these commitments serve to ameliorate any concerns about the possible "crystallization" effects of the market shares being allocated to consortium companies.

 

Rome, 01st April 2011