SGR Romania: Small Retailers and the Refund System

Small businesses, neglected in the Deposit Return Scheme

RetuRO recently published the Merchant Agreement for consultation. Small and medium-sized businesses are being neglected.

9 October 2023 Marius Baraitaru

The Deposit-Return System is Romania's most ambitious sustainability project. Within this System, retailers play the role of facilitators in its implementation, effectively becoming collection points to retrieve guarantee-bearing packaging from consumers. In this context, SGR administrator RetuRO has published the framework contract for retailers for public debate.

We are aware of the importance of the Deposit-Return System (SGR) and the efforts made by RetuRO in its implementation. At Kolecto, we want to contribute to the formulation of an agreement that benefits all retailers, and especially one that does not neglect the interests of small and medium-sized retailers in implementing the system. After all, retailers are not the producers of the packaging that is part of SGR (they are not polluters); they are merely facilitator partners in SGR's implementation. As such, they should be encouraged to participate in this project and not burdened more than they already are by their legal obligations.

Looking at SGR through the lens of small and medium-sized retailers, there are several aspects that are particularly important in influencing the involvement of these retailers in SGR and, consequently, the success of this system. Namely:

Commercial and storage space is a very valuable resource and its use for storing collected packaging must be minimized.
The value of guarantees paid upon beverage purchase, as well as those paid to consumers, can represent a large proportion of small and medium-sized retailers' cash flow, an impact that must be minimized.
The presence of penalties in the contract will outweigh the benefits obtained through participation and will discourage small and medium-sized retailers from being actively involved in SGR.
For small and medium-sized retailers, who are not represented in RetuRO's shareholding, transparency and stability in the contract negotiation process are important, and postponing the establishment of crucial details for a future "SGR manual" or communicating these details after signing the contract is not encouraging.
Small and medium-sized retailers do not have extensive legal teams to help them interpret the 44-page contract, with its complex terms and wording, within a mere 20-day period.

We hope that RetuRO will consider all these general aspects and the specific observations that Kolecto has sent through official communication channels. In addition, because we want to contribute to this effort through dialogue and collaboration, Kolecto has also created this open letter which gives retailers the opportunity to collectively express their views, a letter which, however, does not negate the need for direct communication of points of interest from the contract to RetuRO.

The draft framework contract with retailers can be consulted here.

Frequently Asked Questions

What is the Guarantee-Return System (SGR) and what is the role of merchants in it?

The Guarantee-Return System (SGR) is a sustainability project aimed at collecting packaging from consumers. Merchants act as facilitators of this system, becoming collection points for packaging that carries a guarantee.

How does SGR affect small and medium-sized merchants?

Small and medium-sized merchants can be significantly affected by the legal obligations and penalties included in the SGR contract, which may discourage their participation. Additionally, the costs of guarantees paid upon purchasing beverages can negatively impact their cash flow.

Why is transparency important in negotiating the SGR contract for small merchants?

Transparency in negotiating the SGR contract is essential for small merchants, as they do not have extensive legal teams to interpret the complex terms of the contract. Stability and clarity of details are crucial to encourage them to actively participate in SGR.

What suggestions does Kolecto have for improving merchant participation in SGR?

Kolecto suggests minimizing the use of storage space for collected packaging and communicating crucial contract details before signing. It is also important to reduce penalties so as not to discourage merchant participation.

How can Kolecto contribute to the dialogue between merchants and RetuRO?

Kolecto has created an open letter to allow merchants to express their views collectively, thus facilitating dialogue with RetuRO. This initiative does not replace the direct communication of merchants' interests to RetuRO.