National Container Deposit Scheme will increase beverage prices according to drink manufacturers

Posted by AFN Staff Writers on 13th November 2012

The Australian Food and Grocery Council, Coca-Cola Amatil, Lion (formerly Lion Nathan), and other beverage companies have released submissions on the proposed National Container Deposit Scheme (CDS) stating that it will significantly increase beverage prices.

On 11 October 2012 the Senate referred the National Container Deposit Scheme matter to the Environment and Communications References Committee for inquiry and report by 22 November 2012.

According to the submissions, drink prices are set to increase if the CDS, which is currently in place in South Australia and the Northern Territory, goes ahead. Various drink manufacturers who have launched submissions on the National Container Deposit Scheme have raised concerns that other recycling options are significantly cheaper.

Lion in its submission to the Senate committee used the example of cost increases in the Northern Territory since the implementation of the scheme in January 2012. Lion said that under any implementation of a National Container Deposit Scheme, Lion would “seek to recover the costs.”

Coca-Cola Amatil has also raised concerns that South Australian bottlers were being forced to pay for separate labels.

The Australian Food and Grocery Council has backed the beverage producers while releasing a submission that says the CDS is “a very expensive option.” The AFGC has said that it is in support of “equally effective options” such as the Australian Packaging Covenant, a voluntary commitment by the industry to improving the recycling and disposal of packaging.

Furthermore, the AFGC said in its submission that recent research by economists showed that if the CDS was implemented nationally “it would cost Australian families $300 extra in their shopping baskets each year.”

The Greens MLC Colleen Hartland, in support of the Container Deposit Scheme said in a media statement last month that “it is turning out to be a contest between the big drink companies who see branded litter as advertising.”

“Once Coke’s ridiculous scare-campaign adverts started hitting the papers, the community really smelled a rat and they responded beautifully with a well coordinated email campaign to the Ministers who were set to attend the meeting. I hope it cost Coke a fortune, the litter-bugs,” Ms Hartland said.

The Boomerang Alliance Report is “flawed”, says AFGC

The Greens’ Ms Hartland’s comments follow a report from environmental lobby group, The Boomerang Alliance, stating that drink bottlers were making money from the scheme. The Boomerang Alliance called on The Greens and independent senator Nick Xenophon to re-examine recycling costs.

The Boomerang Alliance claimed that Lion, Coca-Cola Amatil and Schweppes were increasing beverage prices in the Northern Territory and Victoria well above the price of the National Container Deposit Scheme.

However, the Australian Food and Grocery Council has defended beverage producers saying that it is retailers who are responsible for setting retail prices, not the big companies.

“Regular retailer discounting and promotions happen all the time, as such, any such analysis of price changes would need to be conducted over a much longer period,” the AFGC said.

Previous debates of the Container Deposit Scheme

The on-going debate has been previously reported in Australian Food News in December 2011, regarding the “substantial costs” of a national Container Deposit Scheme, estimated at $1.8 Billion a year.

Leading recycling company Visy said that the current kerbside recycling collection scheme in Victoria has been working successfully. In January 2012 Visy said that additional recycling volumes that would come from a CDS scheme would not justify the cost to the community of a new system being implemented.