Academic journal article Multinational Business Review

Germany's 'New' International Strategic Weapon: Environmenta

Academic journal article Multinational Business Review

Germany's 'New' International Strategic Weapon: Environmenta

Article excerpt

INTRODUCTION

Environmental deterioration has continued to agitate the U.S. public since the 1970s which led to increased pressure on government officials and, in turn, business leaders marketing packaged goods. A U.S. survey cited by the Environmental Protection Agency indicates citizens believe solid waste disposal concerns are second in importance only to improved education as serious concerns for the public (Environmental Protection Agency 1989). Business decision makers worldwide are coming under additional pressure from increasingly stringent standards generated by aggressive packaging laws instigated by some European countries. These new packaging standards promise to act as a substantial barrier to exporting success with these countries. This unlikely strategic weapon of "environmentalism" could arm governments with a powerful rationale for either outright rejection of import products or placing them at a significant disadvantage in the marketplace.

PURPOSE

The present research seeks to develop an understanding of the international threats and opportunities exporting firms face regarding new packaging and labeling laws. Examples are offered demonstrating how German laws generate competitive advantages for German firms domestically and internationally. The paper also provides implications for business managers facing the situation.

GERMANY'S PACKAGING LAWS

Over the past three years, Germany has phased in a radical concept in packaging laws. The thrust of the laws is to require companies doing business in Germany to reclaim materials used packaging the product. According to Bernhardt (1992), the German laws regulating recycling and packaging waste are arranged into five stages. First, since December 1991, all packaging used for transporting goods in Germany were required to be accepted back by manufacturers and distributors. Transportation packaging includes items such as pallets, styrofoam containers, barrels, and crates.

Second, as of April 1992, manufacturers, distributors, and retailers must accept all returned secondary packaging. This material is designed to prevent theft, to expedite product sales from vending machines, and for promotional purposes. Such material includes items such as blister packs and cardboard boxes.

Third, as of January 1993, distributors, retailers, and manufacturers are obliged to accept returned sales packaging necessary to transport and contain goods up to the point of sale or actual consumption. Items commonly found in this category include plastic containers such as milk jugs, foil wrapping, styrofoam, cardboard, and cans.

Fourth, as of January 1993, fully half of packaging materials used in any of Germany's federal states must be collected. Of this material, 30 to 70 percent of this material (depending on its make-up) must be recycled or reused.

Fifth, by July, 1995, 80 percent of packaging materials used in Germany's federal states must be collected and 80 to 90 percent of the collected material (depending on its make-up) must be recycled or reused. Firms found guilty of dumping or burning such materials are subject to substantial legal penalties.

GERMANY'S "GREEN DOT" OPTION

Manufacturers are not required to take back sales packaging if they decide to belong to a "Green Dot" program instead (Bernhardt 1992). A green dot symbol indicates to the customer the packaging may not be returned to the retail outlet, but should be taken to special collection containers or local recycle center. Manufacturers are responsible for regular collection of the used packaging materials directly from the customer's home or from designated local collection areas. The green dot also informs consumers the packaging should not be burned or dumped because it has reuse value.

The green dot was adopted by the Duales System Deutschland (DSD) which is a not-for-profit corporation established in 1990 made up of 400 participating companies. …

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