German breweries and retailers near the Austrian border are facing challenges due to a surge in 'deposit tourism' (Pfandtourismus) prompted by Austria's recent increase in the reusable bottle deposit. Since early February, Austria more than doubled its deposit for reusable bottles from 9 cents to 20 cents, while in Germany, it remains at 8 cents. The price difference is incentivizing consumers to exploit the system, leading to financial strains on German businesses.
According to T-Online, entire trailers filled with crates are reportedly being driven across the border from Germany into Austria to capitalize on the higher deposit return. The practice burdens retailers and breweries in Germany, as they are effectively losing money on the bottles being returned in Austria.
Christian Thiel from the Schönramer Brewery in Petting, located just 13 kilometers from the border and less than 20 kilometers from the center of Salzburg, expressed concern over the situation. "In the first days, the trend was catastrophic," Thiel said, according to T-Online. "People are trying to enrich themselves at the expense of the brewery and the trade," he added.
Thiel recounted an incident where someone arrived at a small beverage market with a trailer carrying 50 crates, intending to return them for the deposit. The market refused to accept such a large quantity, showing the strain placed on retailers by these large-scale returns. The situation reflects a broader issue where businesses are being pressured by returns that exceed typical household amounts.
Florian Berger from the Association of Austrian Breweries emphasized that retailers have the right to accept only household-typical quantities of bottles and crates and can refuse the return of products they do not offer themselves. “Driving up with a trailer full of crates could backfire,” said Berger, according to T-Online, warning consumers that such practices may not yield the desired financial benefit.
The deposit increase in Austria reignited a longstanding debate in Germany about adjusting its own bottle deposit system, which remained unchanged for decades. Proponents of a deposit increase in Germany argue that it would make the beer bottle more valuable and encourage responsible recycling behaviors. However, the German Brewers' Association currently sees little chance of a deposit increase.
One major concern among breweries is the perception of a price hike by customers if the deposit were increased. Additionally, there is the fear that customers might delay returning bottles until after any potential deposit increase, potentially leading to shortages of empty bottles needed for production. As reported by T-Online, the costs associated with implementing a deposit increase, such as adjusting return machines and managing the increased value of bottles and crates, are obstacles for the industry.
The situation is particularly challenging for breweries and beverage manufacturers operating on both sides of the border. If a crate with bottles is purchased in Germany and returned in Austria, the breweries lose exactly the €3.90 that the customer gains. The loss adds financial pressure to German breweries already under strain. "This problem affects breweries and beverage manufacturers who sell on both sides of the border," T-Online noted.
The Austrian brewers increased the deposit to better reflect the replacement value of bottles and to enhance the motivation for returning reusable bottles. “It was about increasing the motivation for return,” Berger explained. They also agreed to share the costs of the change with retailers to reduce hoarding effects and mitigate any negative impact on the market.
While the German Brewers' Association understood the rationale behind Austria's decision and observed the situation closely, they highlighted the complexities involved in implementing a similar change in Germany. “An increase would be very difficult to implement,” the association stated. The potential for overwhelming costs and logistical challenges made immediate action unlikely.
As 'deposit tourism' continues, German breweries near the Austrian border are left grappling with the immediate impacts. The increased bottle deposit in Austria not only created financial losses but also exposed the complexities of coordinating environmental incentives across borders. Retailers and breweries are urging customers to adhere to reasonable return practices by accepting only household-typical quantities, hoping to mitigate the strain caused by large-scale deposit arbitrage.
This article was written in collaboration with generative AI company Alchemiq