Ecological War Brews Over Germany's Reusable Beer Bottles
Environmentalists and beer companies have common cause to oppose new tax rules that may reduce the level of recycling.
COLOGNE — After outraging environmental campaigners with a recent law obliging businesses to issue a receipt for every transaction, the German Ministry of Finance is now at the center of another major conflict with environmental implications.
This time the dispute is over a plan to change taxation laws regarding the deposit that beer companies hold in order to pay customers for returning empty bottles. Breweries in Germany claim this change could threaten the established practice of using returnable, reusable bottles.
The disagreement was sparked by a message the Ministry sent to the tax office last year saying there would be a change to how empty bottles are accounted for on brewing companies' balance sheets. The gist of the change is that breweries will no longer be allowed to hold cash reserves to pay customers who return bottles for reuse.
The practice has been in place for decades, as breweries have an obligation to accept — and pay for — crates and bottles from customers who return them. The reserves ensure that the companies have enough money to do so.
So-called individual bottles — bottles, for example, with the brewery's name or logo engraved on them — are not affected. As such, many businesses may end up switching to those kinds of bottles, according to the Association of German Brewers.
But for environmentalists, those bottles are problematic because they don't get refilled and can only be returned to the specific brewery that issued them. For example, Krombacher won't use bottles with the name of its competitor Veltins engraved on them, and vice versa.
This means that the bottles with these branded logos have to be transported from all over Germany to a specific location, instead of being refilled at any local brewery. And that results in millions of additional kilometers traveled and increased pollution, not to mention the extra work — and higher associated costs — needed to sort the bottles.
Whose bottle is it anyway?
"This could have a very damaging effect," says Holger Eichele, director of the Brewers' Association, which estimates that around 20% of beer bottles are engraved with an individual logo or name.
Portrait of a beer bottle (Berlin) — Photo: Zoetnet
Environmentalists are outraged. "The Ministry of Finance is directly undermining efforts at environmental protection," says Thomas Fischer, head of the Circular Economy Program at Environmental Action Germany. "It's high time that protecting the environment was made a priority."
Fischer is especially surprised by the finance minister, Olaf Scholz, who took an active part in introducing the government's recent environmental protection measures. "It's a huge mess," Fischer said in an interview with Die Welt. "Small and medium-sized breweries make a huge contribution to protecting the environment by reusing their bottles. And now the changes to taxation will punish them for doing so, perhaps even put them out of business."
The Ministry of Finance dismisses the heavy criticism. "In our opinion, the tax changes would not incentivize breweries to use individual bottles," it responded when asked about the issue. "Generic bottles and individual bottles will not be taxed differently. Any suggestion of breweries changing to individual bottles must therefore be motivated by other considerations."
The Ministry is still in discussions with the German state governments and beer industry on this point.
The backdrop to this planned new legislation is a Federal Fiscal Court judgment from 2013. The original case was about a mineral water producer, but the judgment will now be applied to the beer industry as well.
The central issue is who the bottles belong to: If they have a name or logo engraved on them, they can be attributed to a specific brewery and remain that brewery's property, even when they're in the possession of consumers. Generic bottles, however, become the property of the consumer, and that then affects how they are taxed.
The situation is different with mineral water. The companies also have bottles with individual designs, but all the bottles belong to the German Mineral Water Association. The breweries, in contrast, have long been unable to agree on a joint industry association.
We know breweries that wouldn't survive.
The Brewers' Association estimates that there are around 3 billion bottles currently in circulation and that together, they represent an overall cost of hundreds of millions for the companies. "We know breweries that wouldn't survive that," says Eichele.
Environmental campaigners are demanding that the regulations be reversed. "Counterproductive taxes that ignore an opportunity to protect the environment, significantly disadvantage those who are engaging in best practice, and endanger medium-sized businesses must be changed," says Fischer.
"What's important is what comes out of this," says Fischer of the Circular Economy association. "What we'd like to see are measures that contribute to environmental protection, and that offer financial incentives, not additional burdens."
At the moment, around 82% of beer bottles are reusable, according to the federal environment agency. That means breweries are the last great recyclers in this area. Mineral water especially tends to be sold in single-use plastic bottles, but recently there has been an upsurge in the use of cans. Experts don't, however, condemn all single-use packaging. Around 99% of cans in Germany are recycled, and even single-use plastic bottles can find new uses if they're returned to recycling centers.