The Container Deposit Scheme

01 December, 2017 by Andy Young

On 1 December 2017, the New South Wales Government implemented its Container Deposit Scheme (CDS), giving consumers in the state a 10c refund on numerous eligible beverage containers.

Throughout the year, TheShout has taken the lead in coverage of the scheme, in consequences for the industry, as well as reaction and opinion on what the CDS means for retailers and suppliers.

Advertisement

It was May 2016 when the then NSW Premier, Mike Baird, announced that the CDS would be introduced into NSW, with July 2017 initially set as the launch date.

In February of this year that July date was pushed back to 1 December, with the Government saying that the delay was “in order to ensure maximum possible state-wide coverage from day one”.

With the date set for the scheme’s introduction, August saw Exchange for Change, a company formed through a consortium of leading beverage suppliers, awarded the Scheme Coordinator contract.

A few days later, the consortium announced Peter Bruce had been appointed as its CEO.

With the Scheme Coordinator and Network Operators in place attention turned to what the scheme would mean for consumers, retailers and suppliers. In September Terry Mott, the CEO of the Australia Liquor Stores Association, said in his column for National Liquor News that the Government and industry had an urgent task to educate consumers on the expected real impact on retail prices.

After being appointed as the Scheme Coordinator, in August Exchange for Change revealed what the estimated fees were that would be levied to beverage suppliers for the running of the scheme.

In September, the Liquor Stores Association NSW (LSA), hosted its annual event, The Panel, which aimed to give retailers and industry stakeholders the opportunity to find out more about the operations of the CDS.

The LSA brought three of the CDS’ key stakeholders to the meeting from the NSW Environmental Protection Authority (EPA), Exchange for Change and Tomra-Cleanaway. The purpose of the event was for the stakeholders to come armed with information that would assist retailers in preparing for the scheme, but attendees were left reeling after speakers did not allay concerns.

With concerns about the lack of information from the Government to consumers about the cost implications for the CDS, which were being passed on to consumers, in his October column for National Liquor News, Terry Mott asked if this would be the Government’s third policy strike following the Greyhound Racing fiasco and the prolonged Council Amalgamation debate.

October also saw Woolworths named as the first CDS retail partner, with 180 collection points across metro and regional NSW. The LSA also launched CDS communication materials for its members, to help educate consumers on the costs of the scheme.

In order for the CDS to have funds to start paying consumers their 10c per container from 1 December, the first invoices from Exchange for Change were sent out on 1 November, so retailers had to prepare for price increases one month before consumers could start getting their refund.

As those prices increased, there was increased criticism for the NSW Government over its lack of information for consumers about the costs associated with the CDS.

In November TheShout asked the EPA to respond to the criticism surrounding the scheme’s costs – its response was as underwhelming as it was surprising.

As the kick-off date for the CDS neared the concerns mounted: one concern was what impact the scheme would have on border businesses, with lower prices potentially available to consumers in states that did not have the CDS.

As it started to become clear that there would not be anywhere near the promised 800 collection points for the scheme in place from 1 December, LSA NSW said that the CDS should be delayed or scrapped entirely.

The NSW Opposition also joined the chorus of concern over the handling of the scheme, with Shadow Environment Minister, Penny Sharpe telling TheShout, the scheme had been completely botched. Even member’s of the NSW Government raised concerns over the abysmal CDS rollout.

One week after the scheme launched Cider Australia President, Sam Reid, told TheShout he thought the CDS was “possibly the worst thought out and implemented piece of legislation since the Rudd Government implemented the mining tax”.

But despite a NSW Labor survey claiming that nearly 20 per cent of CDS participants had withdrawn or were in the process of withdrawing from the scheme, and despite the fewer than promised collection points the EPA told TheShout there had been a great uptake to the CDS, adding it had exceeded expectations.

With all these factors involved the CDS has been the biggest story for TheShout this year and with other states set to follow the NSW pattern, will continue our extensive CDS coverage in NSW and beyond.