With a population over 80 Million and one of strongest economies worldwide, Germany is a lucrative market for many Amazon sellers!
But apart from the promising market opportunities, there are also many barriers to great sales success. Germany is not only known for its wealth, but also for its laws and regulations. Bureaucracy is as deeply anchored in Germany as the love for beer and hearty food. So it comes as no surprise that yet another law will come into force in 2019. The new German packaging law, which regulates the disposal responsibilities of product packaging, strengthens environmental protection, but causes great concern to sellers who are active in the German market.
But don’t worry: we’ll give you the most important facts about the new German packaging law.
What is the New German Law about?
On January 1st, the Packaging Act (German: VerpackG) replaces the Packaging Ordinance that entered into force in 1991. Both laws specify the product recycling responsibility for packaging materials. The idea behind is that packaging sellers must ensure in advance that the packaging they put into circulation is correctly disposed of, whether used for product protection, marketing purposes or shipment packaging. Simply said: Manufacturers need to pay a yearly recycling fee depending on the packaging amounts they sell to the German end-consumer market.
What is changing and why is a new Packaging Law needed?
Until now, you already had to get your packaging materials licensed by a so-called “system partner”. A system partner is a company to which you pay the licensing fee for your materials. But due to the absence of state surveillance and control, there have been many manufacturers that have not complied to the law and neglected their product responsibilities in the past. And those who fulfilled them and have complied with the law have helped paying for the others’ recycling duties. The legislator considered this freeloader behavior as no longer tolerable and created the Foundation Central Agency Packaging Register (Central Agency) with the aim to:
- Increase transparency
- Increase surveillance and control over the compliance with product responsibility regulations
From January 1st, every company will be obliged to register at the Central Agency. Every registered company will receive a registration number.
What exactly are the Central Agency and LUCID?
The agency acts as federal authority. It has been entrusted with sovereign tasks which are specified in §26 of the Packaging Act.
The Central Agency is responsible for the registration of manufacturers as well as the reception and verification of data reports from manufacturers and systems. To sum it up: it is responsible for monitoring compliance and system participation by the manufacturers. At the same time, the Central Agency informs all those with legal obligations of these obligations and ensure that that they can fulfil them with as little administrative burden as possible. For this purpose, the Central Agency has set up the packaging register “LUCID”, which name stands for transparency.
LUCID is a public register and makes it possible for everyone to see which manufacturer is registered for which trademarks/brands. With the registration, however, the manufacturer confirms that he has correctly fulfilled his product responsibility. If a manufacturer has not registered correctly, the packaging materials with these brands will be subject to a distribution ban, meaning that they may not be marketed at any trade level in Germany.
So be careful: Since the register is open and accessible by anyone, it is easy for the authorities and your competitors to check if you comply with the law. And if you don’t, it is likely that your competitors will report you to the authorities in order to hurt your business.
What are the Consequences of Non-Compliance with the New German Packaging Law?
Your products are not allowed to be offered for sale if the registration at the central agency and the licensing of the packaging material has not taken place:
- Your existing products will be banned from the German market by law, meaning that they are no longer allowed to be sold – neither by you, nor by any other distributor.
- In the event of non-registration or distribution of goods for which the manufacturer has not properly registered the brands it markets, a fine of up to €100,000 per case may be imposed.
- Not participating in the system may be punished with a fine of up to € 200,000. It is conceivable that competitors will enforce the distribution ban by civil law.
It doesn’t matter where your company is based – if you want to sell to the German market, you need to go through registration and licensing!
Which Sellers and what Types of Packaging are affected?
Only if the products you sell to Germany have already been licensed in Germany before, you are not obliged to license these materials. If they haven’t been licensed before, you should get them licensed in order to avoid a distribution ban and big fines.
If you ship your products to the FBA warehouse, you don’t need to license the transport packaging and filling materials, as these will not end up at the end-consumer. Only Packaging that ends up at the end-consumer has to be licensed. The packaging that Amazon uses to ship your products are already licensed by Amazon.
How can you register?
To avoid getting banned from the market or facing tremendous fees, you should register before the end of 2018. You can simply register your brands on lucid.verpackungsregister.org. If you have no own brand, adding your company name is sufficient.
Before the end of 2019, you need to license your packaging materials using a system partner like zmart24.de. When licensing to your system partner, you need to sign with your registration number provided by the Central Agency. After the submission at your system partner, you need to immediately report your data to your LUCID account.
- The Packaging Act will be effective from January 1st 2019
- Every company will be obliged to register at the Central Agency (Foundation Central Agency Packaging Register). Every registered company will receive a registration number
- The Central Agency is responsible for monitoring compliance and system participation by the manufacturers
- The will be a public packaging register called LUCID
- If you don’t register and/or don’t carry out system participation for your packaging materials, your products can be banned from the German market. Non-registration will be punished with a fine with up to $100.000, not participating in the system with a fine up to $200.000
- If you ship your products to a FBA warehouse, you don’t need to license the transport packaging and filling materials, as these will not end up at the end-consumer. Only packaging that ends up at the end-consumer has to be licensed. The packaging used by Amazon to ship your products are already licensed by Amazon.
- You should register before the end of 2018 on lucid.verpackungsregister.org
- Before the end of 2018, you need to license your packaging materials using a system partner. To do so, you will need the registration number provided by the Central Agency.
Disclaimer: We can only share our own experience, and the information provided by our partner zmart24.de to be safe, you should consult a specialized lawyer.