Salvatore Gabola, Chairman

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Revision of EUROPENs Fee Structure

• Salvatore Gabola, Chairman
• Interim Report of the Services and Fees Task
  Force

The Cross Sectoral Voice for Packaging And
Packaged Goods
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Services and Fees Task Force Objectives

• Review evolution and structure of EUROPEN
  membership fees
• Identify, analyse and categorise services offered
  by EUROPEN and their delivery
• Assess resources needed to deliver these
  services
• Investigate availability of benchmarking
  opportunities

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Services and Fees Task Force Members

• Salvatore Gabola (Chairman)
• Harry Jongeneelen (Past-Chairman, retired
  December 2005)
• Klaus Dräger (Past-Chairman, replacing Harry
  Jongeneelen)
• Anders Linde (Past-Chairman)
• Jean-Pierre Rennaud (Executive Committee Member)
• Julian Carroll (EUROPEN)

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Services and Fees Task Force Approach
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Services and Fees Task Force Approach
Start analysis of long term issues, but without
trying to address them now
Unsustainability of Current Fee Structure
Address the immediate problem
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EUROPENs Current Fee Structure
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Current fee structure unsustainable

• Loss of SVM?Pact 7 total fee income
• However, several companies who were members of
  SVM?Pact, would no longer be eligible to pay a
  discounted fee
• Net result would be EUROPEN income increase
• BUT is this viable and equitable?

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Current Fee Structure unsustainable

• Sudden major increase in fees/budget is
• Inappropriate
• Budget should reflect needs, not unrelated
  developments at national level
• Dangerous
• Some members may resign rather than accept fee
  increase, which would lead to a net budget loss

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Current Fee Structure unsustainable

• Loss of SVM?Pact highlights that continuing the
  discounted fee concept is
• Obsolete / no longer justified
• Unfair / discriminatory
• Difficult to monitor / administer
• Inefficient

Conclusion we must review the fee/budget equation
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Budget 2006 ( 545,066)
Looking at the budget side of the equation
Conclusion It is not possible to significantly
reduce the budget without altering the level of
services
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Looking at the fee side of the equation

• 2006
• Budget 2006 545,066
• Fees 2006 491,290 (90 of budget)
• Projected deficit 2006 25,341 (deficit
  budgeted new member)
• 2007
• Budget Requirement 2007 581,815(2006 budget
  2 inflation 2006 deficit)
• Fee Requirement 2007 523,634 (90 of budget)

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New Fee Structure option 1Two-Tier

• Keep a two-tear fee structure, but altering the
  rules
• Fees could be based on service level
• Corporate I 15,000 active members, shaping
  agenda
• Corporate II 6,000 passive members,
  information only service
• PENs 1,000
• Pros
• Iniquity is eliminated
• Easier to administer/monitor
• Members could adapt to different service
  requirements
• Could be easier to recruit new members (at tear
  II)
• Cons
• Creates two classes of members
• Unclear whether choices of tear would lead to
  sustainable income level
• Difficulty to distinguish services

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New Fee Structure option 2Single Fee

• Same fee for all corporate members
• PENs 1,000
• Pros
• Iniquity is eliminated
• Efficient, very easy to administer/monitor
• All corporate members on same footing
• Less ambiguity/uncertainty for future membership
• Cons
• For many it would represent a sudden fee growth
  which could push some to leave
• May make recruitment of new members more
  difficult

SOLUTION RECOMMENDED BY THE WG
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Single fee structureSub-option A eliminating
discounted fee

• All corporate members to pay full fee ( 16,784)
• Total contribution to budget would be 604,228 (
  80,000 more than required at current service
  level)
• Pros
• Corresponds to level of fee paid by current
  non-PEN corporate members
• Would significantly increase budget for concrete
  action (i.e. beyond fixed costs)
• Cons
• Very significant fee increase (54) for most
  members
• Unjustified by current external developments
• May push many members to leave
• May make it much more difficult to attract new
  members

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Single fee structureSub-option B Fee related to
current services

• Maintain projected budget corresponding to
  current service levels ( 581,815)
• Share the income required by corporate
  contributions ( 523,634 ) equally among all
  corporate members
• Phase in fee increases over time
• Consider reduced joining fee
• Pros
• Fair, sustainable, related to current service
  requirements
• Avoids excessive fee increases, level remains at
  or below benchmarks
• Cons
• Risk of members leaving is reduced, but not
  totally eliminated

SOLUTION RECOMMENDED BY THE WG
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Recommended new Single Fee Structure

• Single fee 13,500
• Covers budget projected for current level of
  services
• Half-way between full (16,455) and discounted
  (10,695) fees
• Net reduction for 40 of members (those who pay
  full fee or would have to pay it because of
  SVMPact departure)
• Net increase of 2,800 for 60 of members
• Phase in the change over two years
• In 2007
• freeze contribution by full-fee members at
  current level (16,455)
• Increase fee by others to compensate for SVMPact
  loss and to avoid budget deficit ( 12,900 an
  increase of 2,205)
• In 2008
• All corporate members to pay fee of 13,500
• PENs fees to be reduced to 1,000
• All of the above indexed by inflation

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Services and Fees Task Force Approach
EUROPEN long-term role and positioning
Unsustainability of Current Fee Structure
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Ideas for long-term strategy and positioning

• Tomorrows research container
• To attract non-EUROPEN partners