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Cider Australia President slams NSW CDS

Cider Australia President slams NSW CDS

The President of Cider Australia, Sam Reid, has a new monthly column in Drinks Trade. In the January/February issue he takes a damning look at the impact the NSW CDS is having on the cider and perry industries. Here's what he had to say ...

Welcome to my first column in Drinks Trade, bringing you an insight into the cider industry in Australia. It’s such a dynamic space currently, so in each edition, I’ll focus on a topical issue of the moment. Maybe something that excites me or perhaps something that makes me want to rant. This month it’s a rant, so I apologise in advance.

The NSW Container Deposit Scheme was implemented in December and is, quite possibly, one of the worst thought out and executed pieces of legislation I’ve seen since the Rudd Government implemented the mining tax. As with the mining tax, although there was some consultation with the industry, it was done without much impetus or desire to take it on board and evolve the scheme. The legislation was then hastily passed with little or no fanfare, or even public knowledge. I’m waiting for the uproar when Joe Public has to start paying $4 more per case for their favourite beverage for no benefit.

From Cider Australia’s perspective, we have three main issues with the scheme:

1. NSW going it alone

This is not a cider issue; this is a total market issue. NSW has decided to go ahead with the scheme on its own, with QLD, WA and ACT promising something in 2018, and VIC staunchly refusing to implement anything as it doesn’t see the benefits. This will create a cottage industry in cross-state border funnelling of empty recyclable containers into NSW. Who foots the bill for this I hear you ask? Initially, it will be the producers, however, once the over claims become significant enough the cost will hit consumers.

2. Impact on small producers

Most members of Cider Australia are smaller producers, many of which, as is the case with other small producers, are not aware of their responsibilities under the Scheme. Others are frantically trying to find the time to undertake the reporting as the effort involved in setting up and administering the scheme is the same for small producers and large multi-national producers.

Producers are also being asked to pay the deposit and administration fee upfront to ensure there is money to refund to consumers. For many producers, this is a significant disruption to their cash flow and adds to the strain of running a small business.

Interestingly, the company administering the scheme in NSW, Exchange for Change, is a joint venture between Lion, Carlton & United Breweries, Asahi Beverages, Coca-Cola Amatil and Coopers. I do hope this isn’t as sinister and as suspect as it appears.

3. Lack of a level playing field

Although wine is exempt, cider, which like wine is made from fermented juice, has been included. We don’t begrudge the wine industry this exemption as we are great supporters of theirs and recognise the wine industry creates lots of jobs in regional Australia. Some also say it’s fair enough as cider is more like beer in the way it’s packaged, except cider will be charged a higher price per container than any other alcohol as it is already taxed on the final wholesale price. If we assume that most companies will put their prices up by $3.60 per case, to encompass the 10c per container fee and  4c plus per container administration fee, cider producers are required to charge an additional 29 per cent tax on top of that. The final price increase works out to be $4.64. Cider producers have to pay more than $1 extra per case of 24 stubbies in comparison to beer!

Poorly thought out? You decide.

Read more

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>> Coles joins NSW CDS

>> Small businesses expose more NSW CDS flaws