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Germany: Aldi now also wants to recycle

Updated: Sep 1, 2022

Discount Retail Chain Aldi Germany (German family owned) recently announced the Interseroh + cooperation; the cooperation on recycling is to start in January 2022. With this, Aldi is also entering the garbage business after Lidl.

The two group sisters Aldi Süd and Aldi Nord have a new partner: From 2022, the discounter duo wants to work with the Alba subsidiary Interseroh + from Cologne to recycle packaging. Aldi is thus following its competitor Lidl, which has also been active in the recycling business for several years.

"It is a remarkable step that Aldi is taking with it. It could turn the entire industry inside out," says Henning Wilts from the Wuppertal Institute for Climate, Environment and Energy. Because the group is changing its previous strategy: only last year, Aldi had signed a waste disposal contract with the Remondis subsidiary Eko-Punkt. After just twelve months, the latter is now losing its two largest customers, who together account for around 12.5 percent of the licensed volumes, to the Alba Group.

Lidl is a pioneer in recycling

According to the Packaging Act, retailers must ensure that the packaging is collected and recycled. The background to this was the Packaging Ordinance, which came into force in 1991, which obliged industry for the first time to take back packaging put into circulation after use and to recycle it. In Germany, most retailers therefore have recycling agreements with dual systems. There are ten of these on the German market, some of them are extremely small and significantly undercut in price. "In the past, discounters were happy when someone else took care of the garbage. That is now changing," says the expert. Sooner or later, this could mean that some of these small dual systems, which are already insignificant internationally, could disappear.

Until now, Lidl was the only discounter that took waste disposal and recycling into its own hands. The group bought a recycler a few years ago and was able to establish a circular economy with it. The Aldi competitor can benefit from this, he uses the recycling products as raw materials for the packaging of his own brands. "The concept seems to be working. Because Lidl can very easily ensure that the new packaging is actually produced sustainably from products it has recycled itself," explains Wilts.

This also has financial advantages for Lidl. Because if you promise to produce packaging from recycled material, you will usually pay for it, according to the expert: "A ton of recycled PET actually costs significantly more than new PET." That is why it is necessary to rethink waste management, especially under the aspect of sustainability, which is becoming ever more important. In addition, the prices for raw materials will rise rather than fall in the coming years, and thus the costs of packaging materials will rise in the long term.

Strategic partnership

However, Aldi is taking the more cautious path than the competitor. Because Aldi does not buy a recycler in order to bundle the circular economy in its own group, but begins "a strategic partnership" with Interseroh +. The sister companies will remain in the background in the partnership with the Cologne-based company.

This is intended to give Aldi privileged access to sorting and recycling facilities. This also gives the group access to sought-after secondary raw materials. "Access to secondary raw materials opens up new business areas for us and gives us independence," explains Kashif Ansari, Chief Strategy Officer (CSO) at Aldi Nord. As Interseroh + describes, the company's central recycling approach is to "process the collected packaging back into new packaging and products wherever possible". The aim is to ensure that the legal requirements that the Packaging Act prescribes are met.

Development of a material cycle

Interseroh + was spun off from Interseroh in May in order to be able to turn disposal customers like Aldi into co-shareholders, a spokesman for the parent company Alba Group confirmed to the "Handelsblatt". Aldi itself describes the partnership as the first step in a press release: "Other topics such as packaging design and packaging innovations are planned together with Interseroh +."

Industry expert Wilts thinks this makes sense: "Interseroh has announced that it will also support Aldi in building a circular economy. This means that together we can find answers to questions such as 'Where do we have to collect the packaging?' and 'What does the packaging have to look like so that it can be easily recycled?'

Aldi discounters want to recycle all their own brand packaging by the end of 2022. In addition, by the end of 2025, all plastic packaging of the own brands should come from at least 30 percent recycled materials.

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