Isle trash-deal talk
stirs antitrust fear

BFI may take over
Hawaii routes serviced by
Waste Management

By Peter Wagner
Star-Bulletin

The nation's two largest refuse disposal companies are negotiating a deal that could give one of them a controlling share of the Hawaii market.

A spokeswoman at Houston-based Browning-Ferris Industries Inc. yesterday confirmed the company is negotiating with Waste Management Inc. to take over the Oak Brook, Ill.-based company's Hawaii routes.

"Nothing is finalized," said BFI spokeswoman Maureen Allen. "We're still very much in the discussion stage."

The deal, which Allen said could come early next year, would give BFI about 51 percent of commercial contracts on Oahu and about 60 percent statewide. It is expected to involve the trading of Waste Management routes in Hawaii for BFI routes in two other states, sources outside the company said.

The companies are among a dozen commercial haulers on Oahu servicing dumpsters at hotels, apartment buildings, restaurants, and other businesses.

BFI operates on Maui and Kauai and controls about 23 percent of commercial contracts on Oahu, according to the city refuse division, which licenses commercial haulers. Waste Management of Hawaii, which also operates on the Big Island, has about 28 percent. A third player, Honolulu Disposal Services, accounts for about 26 percent of the business on Oahu, the city says.

Waste Management of Hawaii, which also runs the city's landfill in Nanakuli, is a unit of Waste Management Inc., the largest company of its kind in the nation.

BFI, the second-largest, has more than 400 affiliates or subsidiaries and 37,000 employees.

The possibility that a single company would control most of the market is worrisome to other haulers or recyclers. They fear the bigger competitor would undercut them, freeze them out, then raise rates with a virtual monopoly in the business.

Recyclers now dependent on Waste Management for raw materials say their primary source would dry up because BFI is in the recycling business itself.

Asked about antitrust concerns, BFI's Allen said any deal would be scrutinized by authorities. "I think we can feel confident that nothing would go forward without the approval of the Department of Justice," she said.

While neither federal nor state officials would comment, the matter is believed to be under review by antitrust divisions at the state Attorney General's Office and the U.S. Department of Justice.

The Justice Department last year successfully sued both companies in separate cases involving alleged monopolistic practices in four states. The companies agreed to shorten contracts and make other changes allowing smaller companies to compete.

Frank Doyle, the city's refuse division chief, said he was told by officials at Waste Management that the company plans to get out of waste hauling in Hawaii. It would continue other activities in Hawaii, including landfill and hazardous waste operations.

Commercial refuse -- a major source for recycling companies -- outweighs residential trash collected by county agencies. Leaving a single operator in control of most commercial hauling is worrisome, Doyle said. That could leave county refuse agencies, which now only pick up residential trash, with bigger responsibilities should the operator decide to pull out.