Drink producers worried about deposit system competition in Latvia

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The State Environmental Service (VVD) will choose the operator of the packaging deposit system at the end of September. Producers of beverages are concerned about putting the system in the hands of an uncontrolled merchant, since the competition places little role on the operator being a producer of beverages, Latvian Radio reported on August 21.

VVD is still working on the procedures for evaluating applicants for the deposit system operator, which is scheduled to be made public by 1 September. Minimum requirements are, among other things, that the deposit system operators must be producers of beverages, their importers or the associations of deposit packers.

“If there are several of these applicants who will meet the minimum requirements, they will be judged comparatively. And the competition has placed a lot of emphasis specifically on the operator being a deposit package maker. This criterion represents 30% of the assessment, and the other 70% consists of criteria for how the system operator will organize the system,” the Head of VVD Elita Ansberga-Baklāne said.

Producers of beverages are concerned that these tendering criteria nevertheless pose a risk that the system operator would be a merchant who would benefit from an indirect profit.

"Producers are interested in keeping the costs of maintaining the deposit system as low as possible so that the price of deposit packages on store shelves is negligible. That is why one of these valuation criteria is the market represented by the operator. And from the start, the producers argued that this criterion should represent at least 50% of the evaluation. (..) competition is welcome, but this time it must be between producers," said Miks Stūrītis,  chairman of the board of Deposit Package Operator.

Meanwhile, waste management companies have indicated that they want the existing separate waste collection points to be part of the new deposit system.

The head of the VVD said that they would also assess the logistics of collecting deposit packaging during the competition, so that its chain is as efficient as possible.

The best bidder will receive the right to enter into a contract to provide a beverage packaging deposit system for a period of seven years starting in 2022. The contract is scheduled to be concluded by the end of this year. Over the seven years, it is also intended to complement the system with new types of packaging.

The deposit system in Latvia is due to start in February 2022.

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