Australia: New South Wales brewers passing container deposit scheme costs on to their customers

Coca-Cola Amatil is already passing on the costs of the New South Wales container deposit scheme to its customers, increasing prices between A$3 to A$5 for a 24-drink carton, The Guardian reported on January 8.

The scheme began on 1 December, allowing NSW residents to return bottles for a 10c refund at depots, over-the-counter collection points and vending machines.

But, as expected, the scheme has brought costs for manufacturers. Those costs are now being passed on to their wholesale customers and, in turn, to the public.

Coca Cola-Amatil has increased prices by 13.6c per container, excluding GST, or more than A$3.20 for a 24-drink carton of soft drink or water, according to a release to the ASX. The beverage giant said the scheme – along with similar projects being planned across the country – had caused considerable uncertainty for its near-term earnings in Australia.

Major brewers have also increased prices by between A$4 to A$5 for a carton of beer, according to the Liquor Stores Association of NSW.

The chief executive of the Brewers Association of Australia, Brett Heffernan, confirmed the scheme’s costs were now being passed on to customers of the big breweries.

“While I can’t comment on individual prices, it’s fair to say the impact of the scheme costs on all beverage manufacturers has seen prices go up for their customers, which can have a knock on effect at a retail level,” Heffernan told Guardian Australia.

The scheme is designed to reduce the volume of litter by 40% by 2020 and has largely been welcomed by green groups and environmentalists.

But the government’s handling of the rollout has been criticised. Clean Up Australia founder Ian Kiernan, a supporter of the scheme, said the implementation was rushed, failing to give network operators enough time to set up collection points.

The Liquor Stores Association of NSW also criticised a lack of available collection points, saying only 260 of a promised 800 were available on the scheme’s first day.

The association’s executive director, Michael Waters, said many communities were left paying more for drinks but could not claim the refund.

“The [container deposit scheme] is clearly a debacle and needs to be either delayed immediately or scrapped altogether,” Waters said last month.

But a spokesman for the state’s environment minister, Gabrielle Upton, said 27 million drink containers had been returned, showing a positive level of support for the scheme. That included 1 million containers per day in the past week alone, he said.

“There are more than 320 collection sites to get a refund or donate to a charity,” he told Guardian Australia. “That number will continue to grow over the coming weeks.”

The NSW Office of Fair Trading has previously expressed concern about price rises being imposed on consumers. The office has had reports of price rises that exceed the scheme’s cost. In other cases, manufacturers were increasing costs for products not even eligible for the scheme.

“This misleading conduct could be a breach of Australian consumer law,” the fair trade commissioner, Rose Webb, said last month. “NSW Fair Trading will take a stand against any traders who take advantage of consumers to make an unethical quick dollar.”

Upton’s office said the government was keeping a “keen eye” on price rises. The Independent Pricing and Regulatory Tribunal is planning to report on the matter.

“If anyone believes they are being ripped off they can report it to Ipart or Fair Trading,” the spokesman said.

Coca-Cola Amatil, Asahi, CUB, Coopers and Lion formed a joint venture, named Exchange for Change, which plays a role in overseeing the scheme. The venture is responsible for the scheme’s finances.

A second joint venture, involving Cleanaway Waste Management and Tomra Systems, operates the collection network.

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