CDS compensation to be paid to border businesses

13 June, 2018 by Andy Young

Retailers in New South Wales, located within 80kms of the border with Victoria, will be eligible for compensation for losses stemming from the introduction of the NSW Container Deposit Scheme (CDS) in December last year.

Business owners close to the border have reported significant drops in sales and profit losses of up to 30 per cent, which has sparked the compensation announcement from the state government. Michael Waters, Executive Director of the Liquor Stores Association NSW & ACT, said that he welcomed the news, but that he will continue fighting for retailers in other border regions who are suffering losses as a result of the CDS.

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“This is welcome news, and it’s about time the NSW Government took some responsibility for their actions in pushing through such a bad scheme in the first place,” Waters told TheShout.

“The overall effectiveness and success of the CDS has been severely undermined by a combination of poor execution and inadequate communication with industry and the wider public. Issues concerning the implementation of the CDS have since resulted in significant adverse effects on businesses in the retail liquor sector which has been the source of great frustration and anxiety for the business owners themselves.

“We’ll continue working with the Office of the Small Business Commissioner (OSBC) and the Cross Border Commissioner to ensure that applicable members bordering all neighbouring states and territories can access this compensation fund.

“The OSBC have invited the LSA and other industry stakeholders to participate in a CDS Workshop in Sydney on 29th June, to discuss issues and concerns on the implementation and operation of the scheme, and to identify possible solutions.

“High on our agenda remains the cross-border issue, as well as advocating for changes to the reverse vending machines (RVM) and voucher system. LSA believes that the RVM vouchers should be generic and redeemable at any shop or business willing to accept them.”

The NSW Business Chamber has been lobbying for compensation after businesses reported customers were deserting them to buy drinks across the border at non-CDS prices, meaning that they were also taking their associated grocery spend with them.

“Businesses were stuck with absorbing the price rises to maintain price parity, or lifting prices and losing business,” said Andrew Cottrill NSW Business Chamber Regional Manager for the Murray – Riverina Region.

“The NSW Business Chamber has been working closely with affected businesses including making a submission to the Independent Pricing and Regulatory Tribunal (IPART) inquiry. IPART recently visited the border to meet with business owners to hear firsthand about the impacts.

“This is a huge win for businesses across the border, as many were struggling with ongoing viability and many had cut back on staffing or hours as a result.”

Under the announced scheme, retailers within 80km of the border who can demonstrate impact on sales or profits resulting from the CDS will be compensated directly to cover these losses.

In its statement about the move, IPART said: “IPART has been asked to assess applications from NSW retailers near the Victorian border for this assistance.

“Eligible businesses must be small to medium independently owned and operated NSW retailers near the Victorian border that take a relatively significant proportion of total sales from packaged beverages (that is multi-packs of more than six (6) containers such as cases of soft drink and beer).”

Further details are expected to be released this week, but for now, applications are due by 31 August 2018 and for further information on how to retailers should contact cds@ipart.nsw.gov.au.