Page 5: How legislation can restrict trade
In 1991, Germany introduced a law that set a quota for the percentage amount of drinks that were allowed to be sold in non-refillable containers. This law requires that at least 72% of drinks have to be in refillable bottles. Other European countries argued that this was a barrier to trade, on the basis that, if their drinks had to be packed in refillable containers (which are inevitably heavier than non-refillables), they would incur higher transport costs. This would then result in their drinks costing more than those produced locally. Free trade is the key under-lying principle of the European Union.
INCPEN lodged the first formal complaint against the law in June 1991. It explained that the legislation not only discriminated unfairly against imports to Germany, but more importantly, that it did not produce any environmental benefit. Refillable containers are often not the best choice environmentally, socially or economically. They sometimes generate less waste but they always use more energy in production and transport.
In 1994 the European Union passed a Directive aimed at removing such obstacles to trade. It also aimed to encourage reduction of the environmental impact of packaging. This is known as the Packaging and Packaging Waste Directive. Seven years later, the German refill quota is still operating and other countries have enacted or proposed similar protectionist measures. However, the European Commission decided in early 2001 to refer the German law to the European Court of Justice. Unfortunately for many companies, the case will relate only to mineral water, which is required by other European laws to be bottled where it arises.