Why you’ll pay more for your beer

Ross Greenwood speaks to Michael Waters, ‎Executive Director of the Liquor Stores Association NSW & ACT, about the NSW Container Deposit Scheme, and why it will add around $3.60 to your carton of beer

Introduction: Why you’ll pay more for beer

Ross Greenwood:  Welcome back to Money News right around Australia. Good to have your company here on a Friday evening. A few bits and pieces. Apple’s iPhone X, big queues out there. People trying to get in for those iPhones Xs. They always seem to queue up for them. But another story that’s interesting is– and, as I say, it affects you no matter whether you’re in Queensland, Canberra, in Victoria or New South Wales. This is about the state government of New South Wales introducing a new container deposit scheme.

Remember in the old days, you be a kid, you collect the bottles, take them down to the bottler and get some money for them because there was a deposit on them. Newspapers did the same thing. It’s going to come back in. Except this time there’s big issues with it. I think it at least anyway. I spoke this afternoon with the ministry involved, the state minister Gabrielle Upton. She said basically that they think that they’ve sorted out a lot of the issues.

But I’ll take you through this. Because what it seems is that they’re going to impose an increase in the price of beer, soft drink, milk and water from December one– all admitted the price rises are already starting to flow through– of 10 cents per carton. Doesn’t matter whether it’s plastic, whether it’s aluminium or whether it’s glass. 10 cent increase plus 4 cents administration plus 1 cent GST, give or take. Some more, some less. But then what happens after that is going to be interesting. Because you will get the 10 cents back if you take your bottle to the recycling depot.

They’ll going to raise 500 of them around the state, they say. I saw one today. But you can actually only put in 500 of those at a time. If you’re like me, you’ll recycle by sticking them into the yellow bin. But for the bottles you recycle in the yellow bin you get nothing. Zero. Let’s go to Michael Waters from the Liquor Stores Association of New South Wales and the ACT. Michael, lots of issues here. For example, if I am on the border of New South Wales and Queensland, New South Wales and the ACT, I would think that everybody is going to start buying their booze interstate and then bring their bottles back into New South Wales to claim the money back from the New South Wales government.

Interview with: Michael Waters, Executive Director, Liquor Stores Association NSW & ACT

Michael Waters: Yes. Hi, Ross, thanks for having me. This scheme does create some loopholes and some issues particularly around the cross border communities and we’re particularly concerned about the business livelihood of some of our members around the fringes of these border towns.

Ross Greenwood:  Okay. The border towns is one issue. Second issue is, given the fact that consumers are going to pay is extra 10, 14, 15 cents per carton for beer, water, milk, juice. The point of the matter is that most people are not going to go to the depots and recycle because they’re going to do what I do and stick it all in the yellow recycle bin.

Michael Waters: Yes. New South Wales citizens are very used to the yellow bin. I myself and my family religiously are doing that. As a state we’re doing that with 65% to 70% of all recyclables. We’re doing a pretty good job of it.

Ross Greenwood:  So is this about litter or is it about recycling? Because it would seem to me that both these things somehow get confused in all this.

Michael Waters: I’m not quite sure what it’s about. But what I can say is that this scheme’s been rushed. Very poorly crafted, extremely poorly communicated, and the public are only now starting to get the message that prices might well be going up.

Ross Greenwood:  Okay. I found one of the recycling sites today at a Woolworth’s in Granville. There’s an issue there as well– isn’t there?– in regards to where these sites are and whose administering them.

Michael Waters: Ross, I don’t know where the sites are, so you probably know more than me. We’ve been asking the government and the network operator to tell us where they are. What we hope is that the redemptions for people like you and I other consumers to go out– that have the choice to do either– nominate to a charity or have it go up into their account or a nominated account or their Apple card perhaps. Or they can get a voucher for redemption at a particular retail outlet but–

Ross Greenwood:  Hang on. My understanding is that Woolworths and Aldi have signed up to that. But the problem is your liquor store members– I can actually go and take the bottles back to your liquor store member and get a recycle and actually go and buy more booze with them.

Michael Waters: Yes. Well not at the moment but the network operator has said that is not an exclusive arrangement and we’re holding them to that promise. They’re not really been very good at communicating the opportunity to the dozens upon dozens other businesses out there that have the space and legitimately want to be a part of this.

Ross Greenwood:  So it’s going to be a really interesting thing because it raises other issues as well. You got to sit there and think about, say, issues of where can you recycle? Will bottles come across the border? Will people try and exploit the New South Wales government? Is it a case whereby it will be limited to 14 or 15 cents or could it potentially be more that? Could retailers put on more? But one thing about Gabrielle Upton, she said to me, “No, no, no. New South Wales government will put iPad in to investigate to make certain there’s no price gouging.” I hope that would be the case at least anyway, Michael.

Michael Waters: We will have to wait and see how the scheme unfolds. Initially and we know what the prices will be as set by the coordinator for the first three months. Some businesses will make those decisions about what they choose to do with the price. We can’t tell them what to do. But some businesses can’t absorb the price so they have to pass it on to the customer.

Ross Greenwood:  It’s going to be interesting. Michael Waters is the Liquor Stores Association New South Wales executive director and, as I said, really good to have him on the program. Michael, many thanks for that one. We’ll just run final one for you before I go.

Michael Waters: Sure.

Ross Greenwood:  And that is both Canberra and also Queensland. My understanding is that they have schemes coming in as well. So don’t think you’re immune if you’re in a different state, because potentially you’ve got similar schemes coming. Michael, many thanks.

Michael Waters: Yes, thank you Ross.

 

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