Recycle Rewards, Tasmanian container deposit scheme, to result in higher prices
A long-awaited Tasmanian container deposit scheme that promotes recycling will leave beverage retailers "no choice" but to pass on the cost to consumers, an industry representative says.
Recycle Rewards begins on May 1 and will enable Tasmanians to redeem 10 cents per bottle or can brought to a recycling collection point, which residents can redeem in cash, or nominate to a charity or sporting club.
According to the scheme operator TasRecycle, beverage companies will be charged an extra 21.43 cents (including GST) for each aluminium can they supply into the state, and a similar rate for other eligible containers.
Material type
Cost per container supplied (ex GST)
Cost per container supplied (inc GST)
Aluminium
19.48 cents
21.43 cents
Glass
20.17 cents
22.19 cents
HDPE
19.62 cents
21.58 cents
PET
19.78 cents
21.76 cents
Liquid paper board
20.88 cents
22.96 cents
Steel
19.53 cents
21.48 cents
Other plastics
19.53 cents
21.48 cents
Other materials
19.53 cents
21.48 cents
Weighted average cost
19.80 cents
21.78 cents
Source:
tasrecycle.com.au
Supermarket giant Woolworths announced that as of May 1, an extra 22 cents will be added to the cost of every drink product affected by the scheme in Tasmania.
'Significant impact' for drink companies
A poster at Woolworths explaining price increases on products that will come in with the state's recycling scheme.
(
ABC News: Scout Wallen
)
Andrew Quarry from Australian Liquor Marketers in Tasmania, said the scheme will be the biggest challenge the local liquor industry has faced in 25 years.
"Breweries are now budgeting on a 10-per-cent decline in beer carton sales, so it is going to have a significant impact,"
he said.
TasRecycle chair Ben Kearney said the cost to suppliers covered the operating costs, and was put in place to ensure the scheme was accessible to all Tasmanians.
"The operating costs include TasRecycle managing the viability of the scheme and reduction of fraud, and TOMRA Cleanaway managing operations of the scheme, including logistics and processing across the state," Mr Kearney said.
"Over 45 per cent of all litter volume in Tasmania is made up of drink containers and all Tasmanians can help reduce waste and increase recycling rates by participating in Recycle Rewards."
He said beverage suppliers pay the cost of the program.
"
Independent reviews in other states have found no evidence of unjustified increases in the drink price during the first year of implementation of container refund schemes.
"
Comsumers and retailers will have to bear the extra costs placed on products covered by the recycling scheme.
(
ABC News: Ebony ten Broeke
)
How will it work?
Mr Quarry said drink companies will be charged up to 21.43 cents extra, including GST, to supply their products into Tasmania — with that cost then passed onto the retailers.
Photo shows
A row of beer cans on a conveyor belt
It has a name, a logo, and even a nifty YouTube video explaining how it works.
"For example, with 24 packs [of beer] it's about an extra $5 to $5.20. In a 30-pack of beer, it's about $6 to $6.40."
He said the retailers with will have "no choice" but to pass that extra cost onto their customers.
"That cost increase is so significant that at no point could we expect anyone to absorb that cost."
Mr Quarry said it is going to be confusing for shoppers, because if they purchase a 30-can carton which has accrued an extra $6, they will only be able to redeem $3, at 10 cents per item.
"
The concern we have is that our retailers are going to be exposed to a pretty challenging conversation with consumers.
"
Independent retailer worried
Ankit Bali owns and manages an independent liquor store in Hobart, and wants to protect his customers from the extra costs.
"My aim is to not increase our prices any more than we have to, but unfortunately we also have to look at our increasing costs which means wearing the burden," he said.
One bottle shop owner says he will probably have no choice but to pass on the extra costs to customers.
(
ABC News: Ebony ten Broeke
)
For his small business, Mr Bali said he might order 20 cartons a week, which will see the cost increases stack up.
"All of a sudden, it's about $120 of additional cost that we kind of have to fork out without trying to increase our prices," he said.
"
I don't think it's very fair, especially in the economic situation that we're in at the moment.
"
Tasmania's long-awaited container deposit scheme will come into effect on May 1.
(
ABC News: Ebony ten Broeke
)
Mr Bali said he would like to know how the government landed on the set price, seeing as customers are only getting 10 cents in return.
"So effectively, you're looking to make a 100-per-cent profit on everyone returning a can," he said.
"The fact that they're turning this [environmentally] positive scheme into something to generate revenue for themselves makes it really confusing, but then also hurts me."
He said there hasn't been adequate information about the scheme and its impact on retailers.
"
It's a very confusing thing and I would really appreciate more information … on how such a small business like ourselves is going to target this.
"
The extra cost placed on suppliers to Tasmania will be the highest in the nation.
(
ABC News: Cason Ho
)
Geographical challenges
The cost of the scheme for companies supplying to Tasmania is one of the highest in the country.
For example, an aluminium can excluding GST will cost suppliers 19.4 cents in Tasmania, but in Queensland the price is 12.8 cents, NSW is 14 cents, Victoria is 14.5 cents, and WA is 12.3 cents.
Minister for the Environment Madeleine Ogilvie said Tasmania's "unique" geography had created challenges and additional costs.
"Namely, a smaller container volume and population size, the transport of containers across Bass Strait and our lack of access to the economies of scale enjoyed by mainland states," she said.
Cost changes ahead, supermarket giants say
In a statement, a Woolworths spokesperson said the retailer had been "working through the implementation" of the scheme "with our supply partners".
"As in all other states, where there are retail price changes resulting from the costs associated with a container deposit scheme, we have communicated these changes to customers in-store.
"We're supportive of the container deposit scheme based on successful implementation in other states and the positive environmental, litter reduction and recycling outcomes."
The container scheme has been years in the making.
(
ABC News: Ebony ten Broeke
)
A spokesperson from Coles supermarkets said the retailer was "helping to make recycling drink containers more convenient for our customers by rolling out four Reverse Vending Machines at Coles stores" as part of the scheme.
"Our customers will be rewarded for returning their used cans, bottles and cartons, with the option to convert the funds into a Coles voucher, redeem for cash, donate to a charity or transfer directly into a nominated bank account.
"
As a result of this recycling initiative customers may notice an increase on beverages eligible to participate in the scheme. This additional cost covers the 10c container deposit that customers can redeem back, and contributes to the running and administration of the scheme.
"
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