Current waste market structure will never deliver for Irish public
April 15, 2025
By Brian McHugh, Chair
Last week, after considering the latest merger in the waste collection industry, the Competition and Consumer Protection Commission decided that there is no reason, under competition law, why Bord na Móna Recycling should not be sold to KAES Recycling. Our approval is conditional. KAES will be required to sell off certain parts of the business and customers in certain areas will need to move to a new supplier where the market would otherwise become too concentrated.
This merger follows a familiar pattern. We required similar divestments in 2022 when Thorntons bought City Bin and in previous PandaGreen mergers. These divestments ensure, as the market becomes more concentrated, that consumers will retain a choice of suppliers. In many ways it seems simple: we require consumer choice to remain because more competitors in the market is good for consumers…isn’t it?
The role of competition
As the competition authority, we know that competition and consumer power is rooted in choice. If a business doesn’t listen to their customers – on price, quality, service, or features – customers can demand better and take their money elsewhere. Having a choice of providers is usually a sign of a healthy and well-functioning market.
However, domestic waste collection is not a typical market. Some markets work much more efficiently when there is a single provider – common examples include gas and electricity networks. It would be inefficient and prohibitively expensive for multiple companies to build multiple electricity networks servicing the same towns and cities. So, while we might all agree that having multiple pharmacies on the same street is good for consumers, it is not the case that having lots of bin lorries driving down that same street serves the consumer interest.
Lessons from Europe
This is not a radical conclusion for a competition authority to come to. Most European countries came to a similar conclusion years ago and they ensure waste collection is structured more efficiently so that they don’t have three trucks driving down the same road while elsewhere there is no bin service. Just like other key utilities such as water, telecoms and energy, the State will always have an interest in ensuring the waste market works efficiently for the good of society and public health.
What we see in other European countries is strong State-led control and regulation of this service either by managing the collection of waste directly or by contracting it, by competitive tender, to the private sector. Instead of competition within the market for each individual consumer, we see other countries using competitive tendering and other models to create competition for the market. In doing so they ensure an efficient market structure that can deliver society’s requirements for widespread coverage, recycling targets and affordable pricing.
The need for regulatory reform
In 2018, the CCPC published a comprehensive study on the household waste collection market. We detailed a market where side-by-side competition was not working and further market consolidation was likely. We recommended the establishment of an economic regulator that could set out the optimal market structure for the Irish waste market and inform an overall review of Government waste management policy. This must involve bringing the wide range of organisations working on waste management together to deliver the best outcomes for consumers and the economy. Seven years later, despite broad support, these recommendations remain unimplemented.
This situation is not going to improve. We warned seven years ago that the merger regime was not suitable to solve the market structure problem and the continuation of mergers in the industry would only further highlight the need for a regulatory solution. The high costs and practicalities of entering this market mean any significant shake-up through new providers is unlikely. An economic regulator is needed.
Challenges and the path forward
We acknowledge that reform is challenging. In 2012, the Government rejected a similar approach, citing implementation concerns. Some waste companies have hinted at legal action to protect their interests. But while the current system works for them, the status quo is failing consumers. It is not good enough to avoid necessary reform in such a critical market just because it is hard.
The current market structure will never properly deliver for the Irish public. A policy change is long overdue. We stand ready to assist, offering our expertise and support. Now, the Government must act.
Originally published in the Business Post on Tuesday, 15 April 2025
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