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This study focuses in detail on the environmental compliance/competitiveness relationship with respect to the regulation of packaging waste. It emphasizes backward and forward linkages. An entire supply chain is considered: packaging manufacturers and suppliers, food processors and the food retail sector, to study the competitiveness effects of environmental standards on manufacturing companies and the vertical links and supply responses. A variety of regulatory regimes is represented by including within the study companies from Germany, Italy, the Republic of Ireland and the UK. Analyses consider the response of individual firms to different levels of regulation; the cost of compliance; impact on employment; the influence of the supply chain on environmental and competitive performance; the importance of firm size and ownership; and the impact of regulation on competitiveness, and firm competitiveness on the efficiency of adjustment to regulation.