In many areas of the waste management sector, the Rethmann Group companies are market leaders both at the national level and in several federal states, achieving significant market shares and a clear lead over competitors. Those are the key findings of the Bundeskartellamt’s updated sector inquiry into domestic waste collection and hollow glass processing (glass packaging), which was published today.

Andreas Mundt, President of the Bundeskartellamt: “The Rethmann Group has a very strong market position in particular with regard to the collection of residual waste and the collection and recycling of waste glass. In view of these findings we will in the next stage examine whether we will oblige Rethmann to in future also notify takeovers of smaller companies. This would allow us to also examine the effects smaller takeovers have on competition and control the growing concentration of the market.”

As a general rule, concentrations are only subject to merger control by the Bundeskartellamt if they reach certain thresholds defined by the law as minimum turnovers achieved by the merging parties both worldwide and in Germany. This is why takeovers of smaller companies in particular often do not have to be notified.

The sector inquiry was initiated after the so-called domestic turnover thresholds were raised under the 10th amendment to the German Competition Act (GWB) in early 2021. Under the new thresholds, concentrations are subject to merger control if the domestic turnover of one company participating in the concentration is more than 50 million euros and that of another participating company is more than 17.5 million euros. In the German waste management sector, where small and medium-sized businesses predominate, there is a danger that larger companies can acquire a substantial number of smaller companies without the Bundeskartellamt being able to control the effects of those concentrations on competition. The experience of recent years has shown that larger providers have made numerous acquisitions below the relevant thresholds and thus outside the scope of merger control.

A new provision which originally also came into force in early 2021 and was recently adapted by the 11th amendment to the GWB in late 2023 is now enshrined in the newly added Section 32f(2) GWB and gives the Bundeskartellamt the power to order certain companies to notify all concentrations if a previously conducted sector inquiry has shown that there are objectively plausible indications that future concentrations could significantly impede effective competition in Germany.

Following the sector inquiry, and after assessing any comments submitted, the Bundeskartellamt intends to examine whether it should initiate a proceeding to impose this obligation on the Rethmann Group.

Market participants and representatives of business sectors interested in the case are invited to submit their written comments on the report by 29 February 2024. Please send your comments to: B5-antworten@bundeskartellamt.bund.de.

Results of the sector inquiry

Compared with the sector inquiry into the household waste collection sector published on 21 December 2021 (German only), the market conditions in the domestic waste collection sector have remained very constant.

Across Germany, the Rethmann Group companies have continuously achieved market shares of [25-30] per cent in the markets for collecting residual waste, organic waste and bulky waste, and market shares of [20-25] per cent in the markets for collecting separately collected waste fractions, such as paper, cardboard and cardboard packaging, mixed packaging/recyclable materials and glass. In the markets for collecting sales packaging on behalf of operators of the dual system for packaging recycling, the Rethmann Group has achieved market shares of [25-30] per cent for lightweight packaging and [35-40] per cent for container glass. In container glass recycling, a downstream sector of container glass collection, the group has achieved market shares of [35-40] per cent. In most sectors, the Rethmann Group has a substantial lead over its next closest competitors. Both the group’s market shares and its lead over competitors have remained constant since 2018, which was the most recent period examined by the sector inquiry into household waste published in December 2021. Some of the next closest competitors have been able to increase their market share, others have lost market share. Overall, however, this has not significantly affected the Rethmann Group’s lead over those companies.

Across Germany there has been a continuous decline in the number of waste management companies applying for tenders for near-household collection and in the average number of bidders per tender.

Looking at the individual federal states, in North Rine-Westphalia, Hesse, Rhineland-Palatinate, Thuringia, Saxony-Anhalt, Schleswig-Holstein and Mecklenburg-Western Pomerania the Rethmann Group companies have achieved market shares in the collection of residual waste that come close to or exceed the threshold for the presumption of market dominance under the German Competition Act. In the states of North Rhine-Westphalia, Hesse, Rhineland-Palatinate, Mecklenburg-Western Pomerania and Saarland, this has also been the case with regard to the collection of paper, cardboard and cardboard packaging, and in Thuringia, Baden-Württemberg, Hesse and North Rhine-Westphalia with regard to the collection of lightweight packaging on behalf of dual-system operators. The sector inquiry has found that also at the state level the next closest competitors have increased or lost market shares to a small extent without significantly affecting the Rethmann Group’s lead. In the remaining states the markets are shared more equally among existing providers; in some states other providers are market leaders.

The complete report is available here (German only).