The Court judged that the introduction of a deposit/return system for drinks packaging is permissible only if all the producers and retailers concerned can actually take part in an operational return system.
The present case concerns only the situation of natural mineral water imported into Germany in single-use packaging.
Since it is obligatory for natural mineral water to be bottled at source, imported foreign mineral waters - and subsequently the empty packaging - generally have to be transported over long distances, which leads to high freight costs. For the glass bottles normally used as reusables these freight costs are prohibitive. To make up for this cost disadvantage, foreign producers prefer single-use packaging, which costs considerably less to transport.
This is confirmed by a study carried out in June 2000 by the packaging research institute Gesellschaft für Verpackungsmarktforschung, which found that 90 per cent of German mineral water is in reusable packaging, whereas 71 per cent of foreign mineral water is marketed in single-use packaging.
The court therefore criticised the German packaging regulation for making the system change for single-use packaging too abrupt, since under the regulation single-use packaging is subject to a deposit/return obligation only if the share of reusable packaging in Germany drops below a quota of 72 per cent. Section 9(2) of the regulation says that single-use packaging is to be subject to a deposit/return obligation six months after it is established that the reuse quota has not been met.
If the reuse quota is not met, the regulation thus gives distributors of single-use packaging a period of only six months to set up a complete system for charging deposits and returning single-use packaging.
In the Court's view, setting up an operational system for returning single-use packaging requires a transitional period of more than six months. The period needs to be at least long enough to ensure a smooth transition from the present system, under which single-use packaging is not subject to the deposit obligation and can be handled by nationwide disposal systems such as DSD.
Under the German packaging regulation, the obligation to charge a deposit on single-use drinks packaging is linked to the market share of the reusable packaging sold in Germany. Single-use packaging is exempt from the obligation to charge a deposit in Germany - and can thereby be dealt with through general collection and recycling systems such as DSD - only on condition that the share of the reusable packaging sold in Germany is over 72 per cent.
However, the ECJ ruled that deposit/return systems for single-use packaging do in principle make environmental sense, since such systems are likely to increase the return rate for empty packaging, thus contributing to improved recycling of waste.
Furthermore, the Court found that promoting reusable packaging contributes to reducing the amount of packaging waste to be disposed of.
"The Court of Justice has handed down a landmark judgment that will guide us in our efforts, in conjunction with the Federal Government, to adapt the packaging regulation to the precepts of the single market," said Commission vice-president with responsibility for the free movement of goods, Günter Verheugen.
"This means above all the principle laid down by the Court that a deposit/return obligation for single-use drinks packaging can contribute to reducing packaging waste only if all producers and retailers can take part in an operational return system."