Cash for Cans Scheme Raises Concerns for Drinks Industry

May 12, 2016
By Alana House
The NSW Government’s announcement of the introduction of a 10 cent refund container deposit scheme in the state has raised concerns for the drinks industry this week.

On Monday, Coca-Cola Amatil (CCA) responded with the release of an ASX announcement to reassure its investors that the scheme would not have any initial impact on the company’s financials. The Australian Food & Grocery Council (AFGC) also put out a statement supported by leading beverage supplier Lion, saying that the scheme would only target some of the litter and that the Government needs to go “beyond a narrow focus on beverage containers to target all litter.”

The scheme forms part of NSW Premier Mike Baird’s priorities to reduce the volume of litter in NSW by 40 per cent by 2020. The scheme will apply to most drink containers between 150ml and three litres and would enable members of the community to raise funds through collections.

However, the Premier told media that it would be down to the beverage suppliers to put up the 10 cent refund as well as the associated handling and administration fees. As a result retail prices could go up, affecting consumers.

“Industry fully supports the Government’s litter reduction target,” AFGC said on Sunday. “[But] we are disappointed that the Government has chosen to adopt a refund CDS scheme.”

Container deposit schemes have been opposed by industry in South Australia and the Northern Territory in the past, but with little success, and the introduction in NSW is expected to have a flow on effect to other states.

In February, AFCG put forward a proposal for an industry funded scheme that would see manufacturers pay a deposit of approximately half a cent per container to generate funding of $15 million annually, providing a modern litter reduction solution for NSW.

AFCG is hoping that its proposal will gain some traction and has said that it will continue to work with the NSW Government to minimize the cost impact on consumers and industry, as well as avoid duplication of existing waste collection and disposal infrastructure.

CCA has said that it will be setting up a group to advise the NSW Environment Minister on starting up the scheme as well as a Standing Committee to provide ongoing advice regarding the scheme.

The company said, “CCA is working through the potential implications and once further details are known, will update the market as soon as possible.”

It is likely that the scheme will be introduced by 1 July 2017 based on Baird’s announcement in February last year. Other details are still being finalised by the NSW Government.
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