Rather than organizing disposal of consumer-generated waste themselves, many states and countries have passed legislation that makes manufacturers responsible for setting up channels to properly dispose of (i.e., recycle) the products they bring to the market. We study stability of alliances of manufacturers emerging under such legislation. These manufacturers compete with multiple, differentiated products in consumer markets, but may consider cooperating when recycling the products they bring to the market in order to save on the significant fixed costs that are typically associated with setting up a recycling channel. Products sold in different markets might be considered for recycling on the same channel. Our main question is when and whether manufacturer-based recycling schemes (i.e., recycling separately per brand) or product-based recycling schemes emerge as stable coalitions. To that end, we analyze the stability of a series of simple manufacturer-product configurations. We start with an asymmetric industry with three firms and two markets and end with a symmetric industry with two firms competing with each other in two markets. Irrespective of the symmetry in the industry, our results show that if the government organizes and finances recycling, recycling should either be all-inclusive (that is, all products from both markets recycled together), when the fixed setup cost is high, or market-based (that is, products from the same market recycled together regardless of their manufacturers), when the fixed setup cost is low. On the other hand, if the manufacturers organize recycling and the market competition is intense, they may prefer not to cooperate with their competitors. As a result, in an asymmetric industry, it is possible to recycle jointly different products, and recycle separately similar products. With fewer players, firms making different products may recycle them jointly. In a symmetric industry, it is less likely to observe each manufacturer jointly recycling only its products.