An Independent Pricing and Regulatory Tribunal (IPART) investigation has found the price of container beverages has increased due to the NSW Return and Earn container deposit scheme.
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The NSW Government introduced a Container Deposit Scheme (CDS), known as Return and Earn, in December 2017 to reduce the number of drink containers ending up as litter and cut the state’s total litter volume by 40% by 2020.
IPART’s review found that the container deposit scheme increased the costs of eligible container beverages by an average of 7.5 cents per container since the scheme started in December last year.
The review also found in the first nine months of the scheme’s operation soft drink, juice and water prices rose by an average of 9.5 cents and the costs of beer, cider and ready-to-drink mixes increased by an average of 5.4 cents due to the scheme.
Back of Bourke cordials owner Sam Rice said his independent soft drink company has had to adjust its pricing due to the Return and Earn scheme.
“We’ve added the extra cost to the price of our drinks otherwise we’d be a long way behind,” he said.
“It hasn't affected our sales at all and there has been no negative impact on our production, but we do now have to collect the money for the NSW Environment Protection Authority (EPA) because whatever we sell in NSW we have to pay the EPA for the return and earn scheme.”
IPART Chair, Dr Peter Boxall, said that while overall price increases are in line with what would be expected, changes are needed to improve the transparency and efficiency of the scheme’s costs and maintain the competitiveness of some beverage manufacturers, wholesalers and retailers.
“We are seeking feedback on a range of recommendations to address scheme cost volatility and potential barriers to competition,” Dr Boxall said.
“The recommendations include billing suppliers for the scheme’s costs at the end of each month based on actual numbers, rather than billing in advance for the costs of the scheme based on estimates of the volume sold and returned. This would reduce fluctuations in scheme costs from month to month.
“Also, increase the payment terms from seven to 30 days to reduce cash flow pressures on small to medium-sized beverage suppliers.”