In Belarus, a container deposit system may soon be in place. Manufacturers are wary

Belarus is about to begin active work on the creation of a deposit and pledge system of circulation of consumer packaging. The subtleties of its functioning should have clarified the draft decree. However, business and trade have more questions about this than answers. But it is they who will finance the system's operation. We found out why producers and retailers are afraid of the decree, which will soon come into force, and how they offer to raise the fee for collecting plastic packaging.

 

Discussion on the creation of a mortgage system for the circulation of packaging in Belarus began in 2012. According to experts' forecasts, it will allow collecting up to 80-90% of consumer packaging released on the market. Now this figure is at 40%. Another plus that officials see is the creation of new jobs.

 

Recall, according to preliminary estimates, the introduction of a new system of collection of packaging will require about €100 million. It is assumed that about 60 million will be spent on the purchase of equipment. The rest is working capital, which will allow the system to work. The size of a deposit will make 20 kopecks, and on any accepted container.

 

The list of packages that will participate in the system includes packages for juices, water, beer, wine and other alcoholic beverages, with the volume from 0.1 liters to 3 liters. These are polymer flasks, jars and bottles, glass jars and bottles, cans made of tin, aluminium and its alloys.

 

Part of the collection wants to automate, put the taromates, and part of the tare will be taken by hand. Belarus wants to use the Lithuanian model of the system, which works perfectly there, as a basis.

 

Active work on the implementation of the system will soon begin - earlier it was predicted that it might appear in the first half of 2021. Officials have developed projects of documents necessary for its launch, determined who will finance its operation - producers and suppliers of packaging, as well as trade. But the latter do not understand very well what costs it will result in for them, how economically justified they are, and in general, whether the system will justify the hopes that are placed on it, because it will increase the collection by about 5%.

 

Manufacturers: "We are more likely to sign the decree, and then we will figure out what to do with it.

 

Manufacturers of products for which plastic and glass bottles are used said in one voice that they do not know how and what will work.

 

- We do not understand the organizational and economic model of this system. We don't understand how many collection points we need, what share of manual collection should be, what share of automatic collection should be, what kind of costs it entails," Alla Letyago, HEAD of the Corporate Relations Department of Alivaria Brewery, OJSC, lists the questions. - If the Lithuanian model, which is often referred to by developers, is moved to Belarus, everything is not clear here either. There are 4 thousand retail outlets in Lithuania, but we have more than 20 thousand. In Lithuania, we spent, say, 25 million euros on taromatas. We understand that with the predominance of large formats of trade, hypermarkets, supermarkets, it will be the most expensive, because the volume of bottle turnover there will be enormous. According to our estimates, this will cost about 160 million euros.

 

The developers say that this amount is very high. Manufacturers reply that they will be glad to see alternative calculations.

 

- The costs that this system can entail are only 5% of the waste morphology. We should not forget about it. We doubt that the system will cover all the waste generated by the population, - continues the head of the department. - The documents stipulate that the deposit system will be financed by eco-collection (payment for producers and suppliers for the organization of collection of plastic packaging and dishes). - Editor's note), which now they want to increase by 2 times. That is, the system is not yet being introduced next year, and the fee is already being raised.

 

By the way, only Alivaria transfers more than a million rubles each year for plastic collection.

 

- But we do not know whether there is such a document, where you can read a detailed report, where these funds are spent. Maybe then it would have become clearer where such an increase comes from," Alla Letyago said. - There are more questions than answers. But the draft decree has already been submitted to the government. To us, it looks like we're getting married without us - we'd rather sign the decree and then figure out what to do about it.

 

Roman Kostitsyn, head of the RUIE's Business Communications Committee, also has questions about the transparency of the promotions and the collection system they want to launch.

 

- When we talk about non-tax payments, of which we have a lot, including the payment for the collection of packaging waste, which we are discussing today, we must understand the mechanics of their pricing. If the collection has increased, we need to know why," explains Roman Kostitsyn. - Otherwise, it becomes a strong hidden fiscal instrument, which seriously undermines the confidence of the domestic investor. This is how business should be perceived. And in this connection, and in general.

 

Roman Kostitsyn also believes that this has a negative impact not only on relations with the Belarusian business, but also on the trust of foreign investors. Because it is a subject of attention of international rating agencies.

 

- We suggest that such changes be tied either to inflation or to the actual volume of processed containers of a specific manufacturer, then the fee will depend specifically on the effectiveness of the collection," said Roman Kostitsyn. - But in no case can we resort to raising the fee with such rhetoric that "we will raise the fee for you now, and you will have to deal with it yourself. The tone of the dialogue should be constructive. Business does not say no. Business says yes, but please explain everything to us. The second point is transparency. If we really want to create a national system, which can be quite effective, we must proceed from the principle of openness, which we do not see at the moment.

 

"We need to implement the model, test it and find out what its pros and cons will be

 

Andrey Roshchupkin, First Deputy DIRECTOR General of UE Coca-Cola, even proposed to make a separate section in the Tax Code concerning non-tax payments.

 

- This is to make it not so easy to raise them. And when today the cost of excise duty stamps has increased from 120 to 500 rubles at a time, it makes up 10% of the cost of goods. That is, these control marks play a role in reducing profitability.

The increase in the plastic collection fee is also valid. Andrei Roschupkin noted that the operator of secondary material resources explains the increase in fees by the fact that this way they wanted to motivate manufacturers and suppliers of plastic packaging to organize their own system of collection of packaging. However, under such conditions, as proposed, it is unprofitable.

 

- The 2012 decree completely closes the business opportunities to deal with its waste. The manufacturer cannot work directly with collectors and recyclers, it is impossible to unite several producers. You can only create your own system. But we conducted the research, according to the approximate data, the own system will cost from 2.4 to 4 times more, - quotes the figures of Andrey Roshchupkin. - We are offered a mortgage system, but its economic model is not. Only in theory, and it is impossible to "touch" and analyze. It is necessary to introduce the model in several settlements, to test and find out what advantages and disadvantages it will have.

 

In PUE "Darida" the claims of other manufacturers were supported, they do not see any clarity in the situation.

 

- Many times an investor was mentioned, who is supposed to take care of our deposit system. I understand that if there is an investor, i.e. a business plan, which was voiced to this investor, it was shown. We weren't shown," says Mikhail Shpyrkov, First Deputy General Director for Economics and Finance. - Maybe there is some justification for increasing the fee, and we were not shown it either. They tell us about the responsibility we have to bear for the environment, saying: "Let's pay us, and we will do well. "And what will you do? - We will do well! Today it sounds like this to us.

 

According to Vladislav Skrebtsov, the executive director of the Guild of Brewers, the solution to the problems with the deposit system and the fee is reminiscent of political will.

 

- With the deposit system, I am concerned about a few things. The last document sounds like political will. Because we have no information. We have been dealing with deposits for three years, we have attracted the best experts, but during this time we have created only a framework document. And now we want to implement it in two years? - Vladislav Skrebtsov asks the question. - Increasing the eco-collection. Is it political will again? What political will, if there is business, there are investors who do business here. Not reckoning with business is an extremely unacceptable line of conduct. As an argument to increase the eco-collection we are given payments in the European countries - Slovakia and others. Excuse me, which integration structures do we belong to? Who are we building a common economy with?

 

Belgospischeprom also supported the suggestions and concerns of previous producers.

 

Trade: "Costs for both producers and ours will inevitably affect the price of goods".

 

It turned out that not only producers but also traders are wary of the deposit system.

 

- We were practically not involved in the development of this document. We wrote 7 appeals to officials, including MART, to find out, so what is waiting for us? Answers such as "The document is being developed, you will soon learn about it," says Natalia Shablinskaya, Executive Director of the Retailers' Association. - When I saw the document where it was written that the responsibility for the organization of the collateral system lies with the trade, I was furious. We don't have an understanding of what software should be installed on cash registers, how much does it cost, how much does it cost, and how does it work?

 

More recently, trade has come to the SKNO system. All retailers spent a lot of money to install special equipment.

 

- We are still in the process of lending to meet this requirement. And now it all came to us," says Natalia Shablinskaya. - We need to buy taromatas. How much do they cost? Who makes them? Is it possible to buy them from us? We are not ready to buy them. We are not ready to carry out the reception process manually. We have 65% of stores built into residential buildings. How can we find opportunities to organize the process of collecting recyclable materials there? We are constantly being checked by the sanitary services. Not to mention the fact that the people who will do it should receive money. Such work cannot be imposed on anyone for nothing. That is, all this is a chain of costs.

 

The draft decree provides that the amount of deposit for the products in its packaging will be withdrawn by stores. The amount of the deposit must be indicated in the receipt separately from the goods.

 

- The life of a cash voucher, like a flower, is short. Everything printed there disappears before our eyes. You can, of course, buy another ribbon, but one roll costs 8 euros - says the price of Natalia Shablinskaya. - It is assumed that the stores will return the deposit for the containers at the expense of the funds that the buyer paid when buying the goods. But the amount of consumer packaging accepted in one store may be much less than the amount purchased. And the checks presented for the return of the deposit or payment for products may be greater than the amount of goods sold by this shop in the accepted package. It turns out that someone will be in losses.

 

The representative of retail chains says that this system does not seem to be effective to them. It will not solve important environmental problems. At the same time, the costs of both producers and traders, which are not assessed and not taken into account in real terms, will inevitably affect the level of prices for goods.

 

National Bank: "If the costs do not lead to price increases, business will suffer losses.

 

Even the NATIONAL BANK has questions for the deposit system, which we will have. By the way, the draft decree was not sent there for review.

 

- How long will the deposit amount of 20 kopecks last in the context of price stability? There is pressure from the side of costs, and business says that the costs will grow. If they do not lead to price increases, the business will suffer losses," said the representative of the National Bank.

 

He said that if there's inflation, the indexation of this amount will be required.

 

- How timely and how will it happen, under what conditions? In my opinion, the Soviet system collapsed due to the fee, which was paid for the container. The population was not interested in going and giving it up.

 

However, the authors of the decree assured that 20 kopecks is a very good price. The lion's share of recycled materials is harvested at the existing purchase prices, and they are much lower.

 

Ministry of Finance: "The Ministry of Housing and Communal Services has convinced us that the project is so important that the benefits from it will be much greater".

 

If the decree on the deposit system and the decree, which provides for increasing the fee from 180 to 360 rubles so many questions and claims, if the justification for the need to do so unconvincingly, how did they agree on the ministries?

 

- As for the draft decree on the deposit system and the draft resolution, yes, we really considered these projects, analyzed and communicated with the Ministry of Housing and Communal Services. It convinced us that the projects are so significant that the benefits from it will be much greater. They have been repeatedly improved, mainly by decree. The question was rather a political one, so we went for it, - explained the Deputy Head of the Department of Finance of Housing and Communal Services, Transport and Communications of the Ministry of Finance Olga Nevero.

 

The draft state budget for 2020 was adopted with a deficit in the second reading. With what is laid in it, the country will live the whole next year.

 

- It is proposed to introduce incentives for environmental payments, and to analyze these payments in depth. We have the principle of free coverage of expenses with incomes. And all that we have put in the revenue base ... we are not able to reduce it, - says Olga Nevero. - Everybody knows very well what the situation is with our tax maneuver. Therefore, as for 2020 and amendments to the Tax Code, it seems quite problematic in the near future. Because the budget has been formed, the Tax Code has been adopted for a long time and painfully, and so far we see no opportunity to reduce the tax base.

 

MART: "In case of such a decision, the possible inflation growth will amount to 0.1%".

 

The Ministry of Antimonopoly Regulation and Trade together with the National Bank systematically monitor prices in order to influence inflation.

 

- The MART did not agree on this resolution (increase in fees. - Editor's note), - said the head of the department of trade and catering MART Mikhail Zhigalo. - We have made calculations and simulated that if this decision is taken, the possible increase in inflation will amount to 0.1%. That is, this measure to some extent will put pressure on inflation. 

MART believes that it would be better to increase the number of steps to be taken in stages. That is not to increase in two times at once, but to break increase into quarters and even two years.

 

- According to the deposit and mortgage system, there are certain risks of creating pressure on inflationary processes. But we believe that it will depend to a greater extent on how we will implement it all, how the regulatory legal acts will be developed, - says Mikhail Zhigalo. - If we can clearly implement all the mechanisms, there will be no problems with the growth of the consumer price index.

 

The operator of secondary material resources: "Expensive? Make it cheaper - we will compete".

 

The "Secondary Material Resources Operator" is best aware of the operation of the future collateral system and why the plastic collection fee is so high. He participated in the development of documents.

 

- The purpose of creating a document that raises the fee was not to collect money. We wanted the business to take responsibility for waste management first. But he did not take part in collecting the packaging. The fee is raised to push. If the percentage of packaging collection grows, so does the fee. With glass, the high percentage of the board has pushed manufacturers to create their own collection system. We did not go with plastic, because the fee is small, - explained the Director of the State Enterprise "Secondary Material Resources Operator" Natalia Grintsevich.

 

Now the plastic bottle is subject to a fee rate of 0.7 kopecks. The cost of collecting a bottle is 5.2 kopecks.

 

- And really, why do we increase the fee only by 2 times? - Natalia Grintsevich says. - If someone thinks that we take expensive, we can establish our own system of training camp, we will compete.