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The spectre of alleged dominance of private recycling companies in the collection of household residual waste surfaces time and again in the minds of municipal decision-makers. A perceived concentration of private enterprises in the market is repeatedly alleged in municipal associations and the media, causing not only politicians on the left of the political spectrum at the federal and municipal levels to call for more responsibility to be assigned to the municipal level. High time for an objective view of the actual market situation. REMONDIS checked the facts.
A direct comparison of market shares held by the three biggest private enterprises with those held by municipal competitors reveals a clear trend in the favour of municipal enterprises. Thus, the market share of municipal companies over the period 2006 to 2018 has risen from 38.7 to 48.5 per cent. Analogously to this, the market share of the three large
companies dropped by 9.7 per cent.
Municipal enterprises possess almost 50 per cent of the total market for collection of residual waste.
Collection of residual waste from households in Germany
In the debate, in part public, between municipal associations and private enterprises, the accusation of cherry-picking by private enterprises can be frequently heard, with it being alleged that these companies secure supposedly lucrative districts of cities, while municipal enterprises are left to attend to the remaining higher-cost ones. Here as well, a glance at the market produces a completely different picture:
25.5 million of the approximately 81 million inhabitants of Germany live in 80 major cities. Private collection and recycling companies only engage in the collection of residual waste in 17 of these major cities. Just for starters, collection takes place within the framework of public-private partnerships (referred to as KOPKO for short) in 15 of these cities, i.e. once again with municipalities holding a majority share. In 63 major cities, municipalities attend to the collection of residual waste completely on their own without any private involvement at all – incidentally including without having to charge any value-added tax for such if they are a public agency. In view of these figures, the accusation of cherry-picking appears unwarranted indeed.
Interestingly enough, regular market analyses assign public-private partnerships (KOPKO) completely to the private sphere beginning with a 20 per cent stake being held by the private enterprise, even though municipal partners have larger stakes in the joint ventures. Even then, the share of municipalities is still a sizeable 47.3 per cent. The rest is split up among all the various private enterprises, of which even the three biggest ones do not even come close to achieving a comparable market dominance.
Municipal special-purpose associations circumvent tenders, thereby further undermining fair competition.
In closing, one can pose the somewhat heretical question as to why assessments of the market from an anti-trust perspective generally ignore by far the biggest market actors - municipalities - completely. Like many other private enterprises, REMONDIS adheres to the slogan of 'may the better one win', pleading along these lines for objectivity and fairness in any analysis of the market and to uphold and preserve the principle of public tenders. Municipal enterprises should also take part in these tenders - subject to the same competitive conditions. Only in this manner can an optimum price be obtained - in the interest of those who pay the fees for these services.