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Finnish retailers: Domestic package recycling fee a competitive burden

Finnish retailers say they’re concerned about a recycling fee charged only to domestic merchants. The fee – which costs businesses up to 100 million euros annually - does not apply to overseas merchants who sell to consumers in Finland.

Matkahuollon paketteja kannetaan Siwaan, josta asiakkaat käyvät pakettinsa hakemassa.
Matkahuollon kautta kulkeneita paketteja kannetaan Siwaan, josta asiakkaat käyvät hakemassa pakettinsa. Image: Matti Myller / Yle

The boom in online commerce has brought benefits and drawbacks to Finnish retailers. The Finnish Commerce Federation, an interest group for retailers, says that it’s concerned about competition distortions that are giving foreign retailers an unfair advantage.

"Finnish trade and especially brick and mortar stores are now faced with larger costs than foreign online merchants," said Federation head Juhani Pekkala.

Local traders have pointed out that foreign online retailers are not obliged to pay a recycling fee for products delivered to Finland.

However the recycling fee is compulsory for Finnish businesses. In terms of recycling charges for packaging alone, Finnish companies pay out close to 100 million euros annually. Merchants estimate that foreign sellers avoid paying several millions.

"A major competitive disadvantage"

"There needs to be some solution that would be applied to all EU countries, for example. In any case, this must be addressed," Pekkala commented.

"It’s important to understand that this could also create a major competitive disadvantage for us," he continued.

From the beginning of this year, the cost of importing packaged goods will increase when the responsibility for recycling consumer packaging will be transferred from municipalities to producers.

"Foreign companies will avoid the payments because the producer must operate in Finland," said Juha-Heikki Tanskanen, chief executive of the recycling company Rinki Oy.

"Producer liability does not affect foreign companies in the same way that it affects Finnish businesses," Tanskanen added.

The recycling chief explained that the recycling fee varies depending on the product and the type of packaging material used.

"In this case, it’s left for others to pay. Apart from avoiding the fee, it adds to the costs faced by the Finnish companies that pay the recycling cost," he concluded.

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