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Moves to prevent ‘cash for cans’ scheme causing drink price spike

By Glynis Quinlan 9 May 2018 18
plastic bottles

Drinking problem: The ACT’s proposed container deposit scheme may increase drink prices, but the government says they will not let that happen. 

The ACT Government will introduce measures to ensure its container deposit scheme doesn’t jack up drink prices following concerns about this happening in NSW.

ACT City Services Minister Meegan Fitzharris said beverage prices in the ACT will be monitored one month before and 12 months after the implementation of the container deposit scheme on June 30 to identify if any costs passed onto consumers are excessive.

The Government has engaged the Independent Competition and Regulatory Commission (ICRC) to undertake independent monitoring of prices and has committed to respond to any issues raised.

The move follows on from concerns which have come to the fore in NSW following that state’s introduction of the scheme last December – including complaints about excessive price increases and questions about who pockets the funds not claimed by the public through refunds.

“We have been watching the rollout of the container deposit scheme in NSW and we are learning lessons from their experience to make sure Canberra’s container deposit scheme is efficient, effective and fair,” Ms Fitzharris said.

“The costs of running the container deposit scheme will be funded by the beverage industry, and we expect the industry may try to recover costs by increasing the retail price of beverages.

“We want to make sure Canberrans are treated fairly, so we want to know if any beverage price increases are excessive and don’t reflect the actual costs incurred to fund the container deposit scheme.”

According to the Liquor Stores Association of NSW, the NSW container deposit scheme has added $4-5 to the cost of a carton of beer.

Coca-Cola Amatil has said the implementation of the scheme has increased its prices in NSW by 13.6 cents per container, excluding GST.

In an investor report from last November, Coca-Cola Amatil said that Australian Beverages’ near-term earnings will be impacted by the implementation of the container deposit schemes in the ACT, NSW, Queensland and Western Australia.

NSW Fair Trading Commissioner Rose Webb has warned that any retailers or distributors who use the NSW container deposit scheme as a “false reason to jack up prices” will be targeted.

NSW Fair Trading has received complaints about price increases that exceed the costs of the scheme to businesses and has also had reports of consumers being told that the scheme has caused a price increase, when the relevant containers aren’t even eligible for a refund.

“The container deposit scheme will encourage Canberrans to do the right thing to reduce litter and waste to landfill,” Ms Fitzharris said.

“It is not an opportunity for beverage companies to arbitrarily or excessively increase prices, so we’ll be keeping a close eye on them.”

City Services Minister Meegan Fitzharris and Peter Bruce, CEO of the scheme’s coordinator Exchange for Change ACT, announcing details of the scheme last month. Photo: Supplied.

Ms Fitzharris said that the ICRC’s monitoring will be paid for by the beverage industry from scheme funding.

The container deposit scheme will start in the ACT on June 30 this year, with Canberrans able to receive a 10 cent refund for empty drink containers such as aluminium cans and plastic water bottles.

There will be two types of collection points – a face-to-face express service run by social enterprise organisations or charities, and bulk depots that accept larger quantities of containers.

For updates about the scheme and other information including the rollout of collection points, go to: www.actcds.com.au

Are you concerned that the container deposit scheme will lead to excessive increases in drink prices? Do you think the Government’s measures will be effective in preventing this? Let us know in the comments below.

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18 Responses to
Moves to prevent ‘cash for cans’ scheme causing drink price spike
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Rollersk8r 1:57 pm 11 May 18

A recycling scheme paid for by the beverage companies sounds suspiciously like Mexico paying for Trump’s wall. I honestly don’t understand what problem this scheme is designed to fix? We recycle 100% of our own drink containers out of habit. Am I now supposed to stockpile containers at home and cash them in a few times a year – because I’ll tell you right now I can’t be bothered doing that. I’ll continue to put every single container in the recycling bins at home.

Stephen Hughes 3:51 pm 10 May 18

How is the government going to monitor prices on beer rtd and cider?

Retailers can charge what they like.

I think the government should watch out for the grocery giants who may abuse this as an opportunity to pressure some of the smaller retailers by not raising prices like what happened in queanbeyan and all around the Nsw border.

Michelle Cains 3:29 pm 10 May 18

Producers have been required to pay a bulk levy in advance, which they then recoup (incrementally) by passing it on to the retailer, who in turn passes it along to the consumer at the point of sale. So it seems that the government are holding the money dependant on consumers being bothered to return their bottles. And they plan on monitoring businesses - how about some transparency on how much has been collected in advance, and how much has been claimed back...?

Stephen Hughes 9:38 am 10 May 18

Well Ben Richardson that is very true if that were the case. What you don't see is that on top of the $.10 per bottle is the government management fee so another cent or two. Oh don't forget the gst on the now 12 cents so that goes up to 13 cents cost. So that gets passed onto the retailer. The retailer marks it up 13 cents but you once again have to pay gst on that 13 cents so that now takes it up to say 15 cents x 24 minimum without any money added by supplier for their cost of accounting and managing it now you case has just gone up by $3.60

Taxing a tax the legal triple dipping by our government.

gooterz 11:03 pm 09 May 18

“The costs of running the container deposit scheme will be funded by the beverage industry”

No its a tax on consumers. No way is it funded by anyone else .

What kind of Mickey Mouse accounting are they trying to pull.

Ben Richardson 10:35 pm 09 May 18

A 24 bottle carton of beer should increase by $2.40...no more, no less.

Steve Cains 9:19 pm 09 May 18

WOW! Sad that RIOTACT can be hoodwinked by ACT Labor's dishonesty. When a government places a new tax on a product, the retailer MUST add this tax to the price they charge, or...(refer to the number of small businesses who went bankrupt when the GST was first introduced.) Small Business is Australia's biggest employer & will again have to bear the brunt of this new tax. Make no mistake, each ACT retailer will be charged an EXTRA 10 cents for each & EVERY container of fluid which they sell. This new tax, is just that - a new tax, that consumers will have to pay.

    Julie Macklin 9:48 pm 09 May 18

    You only pay it if you buy a "container of fluid". It's not compulsory, so there's no "have to pay". It's choose to pay.

    Glynis Quinlan 9:51 pm 09 May 18

    I am not sure why you think the RiotACT has been 'hoodwinked'. Of course the costs of the scheme will be passed on by the drinks' companies to the public - this is well known. This article is about concerns that excessive price increases - going above the costs - could be passed on as has happened to some extent in NSW. This is what the Government is saying it will monitor - whether that is effective or not remains to be seen.

Alexandra Hughes 8:56 pm 09 May 18

The ACT Government can't manage a traffic jam. All they're good at is wasting tax payer dollars on things we dont don't need or want.

Alan James 7:51 pm 09 May 18

Completely stupid policy. The current system works fine.

Why is there a need to create a whole new infrastructure to deal with a non existant problem.

Prices go up and in order break even we have to store containers and then take an additional trip to a machine that may or may not work, extra trip time and fuel wasted.

    John Hamers 9:11 pm 09 May 18

    Morally, every single person should be recycling everything they possibly can without any incentive. This include food scraps back into their garden.

    Alan James 9:28 pm 09 May 18

    John Hamers we already do without this dumb program.

Alan James 7:49 pm 09 May 18
Maya123 7:15 pm 09 May 18

Even if this does jack up the price does it matter? Beer and soft drinks are not a necessity of life. Might help improve waistlines if people drank less of these. Apparently one indicator of being over weight is how much soft drink is consumed, and over 60% of people are overweight and it’s increasing.

    gooterz 10:27 am 10 May 18

    And the other 40%.
    The tax will apply to milk containers and soon after that they will go after paper and plasic.
    We already get forced to pay a tax on plastic bags even though we have something called a plastic bag ban.

    Also i wouldnt be suprised if they multiply the tax on spirits by the number of drinks. So wine would be 1 dollar rather than 10 cents. Otherwise we end up forcing people to the hard liquor.

    Maya123 11:31 am 10 May 18

    gooterz wrote, ” We already get forced to pay a tax on plastic bags”

    We don’t have a tax on plastic bags that I know of. Nobody is forcing you to take plastic shopping bags. I am presuming that’s what you are referring to. That’s not a tax and your know it. It’s just thoughtlessness and laziness if you take them, and bloody mindedness. I haven’t routinely taken a plastic shopping bag in over thirty years. Need so few of them. There is no need to generate lots of household garbage just so you can make an excuse to ‘need’ them. Enough products come with plastic bags now that can be used to put garbage in. There are bread bags, Canberra Times wrappers, etc, and I can’t find a use for most of them; let alone buying more. I line my kitchen garage bin with (the bigger) Saturday Canberra Times wrapper (could also use a bread bag, etc). That takes one to two weeks to fill. And I am not trying!

Lauryn Roberts 6:23 pm 09 May 18

Geez I'm glad wine only comes in one bottle!!! Lol

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