Waste collection a ‘natural monopoly’

The Government is facing calls to establish a waste regulator, because the waste-collection market bears all the hallmarks of “a natural monopoly”, according to a new report.

The report, from the Competition and Consumer Protection Commission (CCPC), investigated the industry, following a request, earlier this year, by Environment Minister Denis Naughten.

The study found little competition in the market. The 20 main operators serviced 90% of households that availed of a collection service.

Some 18% of households nationally, and 25% in the Dublin region, do not have an option of more than one waste-collection provider, and 23% of households do not have a waste-collection service at all.

The number of operators in the market is decreasing and local authorities expect that trend will continue.

CCPC chairwoman Isolde Goggin said the domestic household waste-collection market exhibits characteristics of a natural monopoly and consumers have little influence.

“In theory, side-by-side competition should allow for multiple suppliers and consumer choice,” she said.

“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.”

The CCPC has recommended that the Government set up a regulator for household waste collection, with consideration to be given to the function of the regulator in relation to economic-licensing, data-collection and analysis, market design and consumer protection.

Mr Naughten said the report supported the Government’s decision to scrap the flat-rate fee structure.

“The report notes that it took 19 years for a policy to be implemented to abolish flat-rate fee structures,” he said. “The report shows that daily waste-collection costs are between 63 cents and 77 cents and only 6% of people cite cost as a reason for not having their waste collected.”

Mr Naughten said that the CCPC findings confirm consumer price stability across the sector over the last year and that there was “no evidence of price-gouging”.

Social Democrats councillor Cian O’Callaghan called on the Government to establish a waste regulator to oversee price controls for bin collections.

“Without a regulator in place, it’s clear the entire sector is in danger of being controlled by a small number of companies,” said Mr O’Callaghan.

“Regulators are in place for insurance, gas, electricity and broadband. While they could do much better, at least there is someone with a remit to stand up for the interests of the consumer and be a recourse of complaint for customers.”

Siptu said the review confirmed the only long-term solution for the industry is the return of services to local authority control.

Its public administration and community division organiser, Adrian Kane, said the only organisation that can be trusted to operate “a natural monopoly” is the State and more regulation “is doomed to fail”.