Monday, 6 February 2023

Deposit on recyclable packaging not included in a selling price - AG Emiliou in Verband Sozialer Wettbewerb (C-543/21)

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Last week, on February 2, AG Emiliou issued his opinion in the case Verband Sozialer Wettbewerb (C-543/21) concerning interpretation of the 'selling price' from the Price Indication Directive (Directive 98/6/EC). The facts of the case concerned yoghurts and drinks sold in glass containers, which consumers could return for re-use and recycling purposes. The products were sold at a specified total price 'plus ... deposit'. The question discussed was whether the total selling price should have included the cost of the deposit. 

Article 2(a) Directive 98/6 determines as a 'selling price' the 'final price for the unit of a product, or a given quantity of the product'. A few points in AG Emiliou's opinion drew my attention:

Final components of the price 

AG Emiliou refers to a previous case in Citroën Commerce (C-475/14) where the Court determined two conditions for qualifying a component of the price as a 'final one': 1) it needs to be a pecuniary consideration for the acquisition of the product; 2) unavoidability and foreseeability thereof (paras 38-40). Whilst the first condition seems to be fulfilled here by consumers paying money as the deposit on the glass container, acquisition of which is necessary to purchase a drink/yoghurt, the second condition is more difficult to pin down here. On the one hand side, the deposit has to be paid at the time of the purchase, thus it could be deemed unavoidable. On the other hand, consumers may get their money back if they return the packaging, which could make the payment ultimately avoidable (para 48).  The question then is whether we assess the unavoidability of payment at the moment of the purchase of a product, or by looking holistically at a given transaction. Even in the latter case, there could be situations when consumers do not return the deposit and thus forfeit the payment, not necessarily voluntarily. The Commission draws attention in its submission to the fact that tourists may leave the country with a container and not be able to return, that glass containers may easily be broken or even repurposed by consumers themselves at home, all of which would not allow consumers to reclaim the deposit (para 49). To AG Emiliou these would not be typical situations though (para 51), invoking German governments submission that at least in case of plastic containers - 96% would be returned for recycling. There is a difference though in durability of plastic vs glass containers, and Germany has quite a long history in recycling efforts, compared to many other European countries. However, one cannot but agree with AG Emiliou that the deposit at least can and even should be refunded (para 52), which could lead the CJEU to conclude that it is an avoidable part of the price. 

Selling price vs price per unit

An interesting argument to not count the deposit within the selling price is made by AG Emiliou in reference to the need to allow consumers to have insights into price per unit of a product. Indeed, if we would include deposit price in the product price, this could obscure the comparison between yoghurt/drink prices of competitors, if consumers would return the packaging and be refunded their deposit money (paras 59-61, 65). At the same time, AG Emiliou does not give enough weight to the Commission's argument, in my opinion, that not including deposit money in the selling price may mislead consumers (esp. vulnerable consumers) as to the total price of the product at the moment of its purchase (para 62).

Environmental context

'Deposit-refund schemes are, above all, tools of environmental policy...' - thus starts para 69 introducing AG Emiliou's arguments based on the green agenda of the EU policymakers, highlighting various recent developments aimed at promoting recycling of consumer goods packaging. This concludes with a claim that by splitting the price, providing a separate quote for the deposit, consumers' attention may be easier drawn to the fact that the container could be recycled or reused (para 77). First, this argument makes information design/transparency claims, without, however, justifying them by referring to any literature showing that providing consumers with a separate price point would indeed increase their awareness of the recyclability of a container. Second, it is interesting to observe how interpretation conducted through the lens of current policy objectives could introduce new meaning to old provisions.