The Competition and Consumer Protection Commission (CCPC) has said there should be economic regulation of the household waste collection market.

It has published a report assessing the sector, following a Dáil debate and subsequent ministerial request under the Competition and Consumer Protection Act.

The report also found the domestic waste collection market in Ireland is "highly concentrated" - and becoming increasingly so.

The CCPC examined the market from a competition, consumer protection and regulatory point of view.

It looked at current structures and compared Ireland's market against that of other European countries.

It found the market is "extremely complex" and that State, commercial and consumer interests are continually overlapping and often conflict with each other.

"These factors have played out differently in different parts of the country", CCPC chairperson Isolde Goggin said.

"As a result, we believe that a review of Government policy and specifically the introduction of economic regulation is required to make this market work better for consumers, industry and the State, in the medium and long term."

"Atypical" Irish model

The current side-by-side competition model means that, subject to licensing, waste operators can offer their services in any location and so there may be more than one operator in a given area.

This structure also means that price and service levels for the collection of waste from households are determined by private operators.

In this context, Ireland's waste collection market is "atypical" among almost all countries in Europe.

Usually, competition brings better outcomes for consumers, businesses and the economy.

But the CCPC's analysis found that the household waste collection market exhibits characteristics "of a natural monopoly" - including strong local economies of density and scale, high fixed costs and a large cost advantage for a single operator.

Ms Goggin added: "In theory, side-by-side competition should allow for multiple suppliers and consumer choice.

"However, in reality, the domestic waste collection market in Ireland is highly concentrated and becoming increasingly so.

"As a result consumers have little or no power to influence the behaviour of operators in this market."

Recommendations

There are generally two types of solutions to this type of situation: more operators and increased competition, or economic regulation.

"Given the characteristics of the waste collection market, we will likely see less competition rather than more in future. Economic regulation is therefore necessary".

The CCPC has recommended establishing an economic regulator for household waste collection.

It also said a review should be undertaken of the Government's 2012 policy document, and also to ensure that all of the State's resources are co-ordinated to deliver optimal outcomes for this market.

No 'one size fits all' type 

Environment Minister Denis Naughten has welcomed the publication.

He said: "The findings of this report clearly supports the policy decision that I took to introduce an incentivized pricing model by abolishing flat rate fees rather than a blanket pay by weight system proposed previously.

"The report notes that it took 19 years for a policy to be implemented to abolish flat rate fee structures".

"I welcome the fact that the CCPC does not call for a one size fits all type regulatory approach and that based on data collection and consultation, different competition models can be introduced for different geographic areas."

He added: "I welcome the fact that the CCPC highlights the need to roll out brown organic bins nationwide which again supports my decision to implement this measure last year.

"Clearly if we can get 90% coverage in rural counties such as Clare and Leitrim there is no reason why it cannot be achieved elsewhere.

"It is notable that significant progress has been made in recent times in terms of the co-ordination of the local authority regulation of the sector, including the establishment of the National Waste Collection Permit Office, the National Transfrontier Shipment Office, the Waste Enforcement Regional Lead Authorities and the Regional Waste Management Planning Offices".