Our Views

Brewers Association

Container Deposit

We reject costly container deposit legislation (CDL) and instead urge jurisdictions to invest in the successful partnership model – including the options proposed by industry to build on and better fund the Australian Packaging Covenant (APC) with dedicated packaging litter and recycling programs.

 

How are packaging litter problems currently being addressed?

The Brewers’ Association recognises the significant progress already made in reducing packaging litter and increasing recycling rates across Australia, as well as the strides made by our members in reducing their environmental footprint through voluntary investments and collaboration.

Packaging litter has been trending down in Australia for some time, while recycling has been steadily improving.  According to Keep Australia Beautiful’s national Litter Index data, Australia has recorded a 20% reduction in total litter items and 31% reduction in litter volume over the past 8 years alone.  At the same time, over 97% of Australian households recycle beverage containers through kerbside systems.  Nevertheless, issues persist with away from home recycling and packaging litter, including fast food containers, snack and gum wrappers, cigarette litter, coffee cups and beverage containers.

 

Is container deposit legislation (CDL) the optimal solution?

The Brewers’ Association supports an active approach to product stewardship, driven by our members’ significant efforts to date and consistent with the beer industry’s commitment to playing a constructive and long term, sustainable role in the community.

The Brewers’ Association notes the overwhelming evidence – both in government and industry studies and in practice – of the high cost of CDL compared to alternative litter reduction schemes. We also note that in the Australian jurisdictions in which CDL is in place, beer is unfairly penalised as CDL costs are not applied to wine and some other beverage categories.

COAG’s latest cost/benefit analysis, released in late 2011 as part of its review, modelled two national CDL options as costing (in net terms) between $1.4 - $1.76 billion dollars over 25 years.[1]  This was around 27 times the net cost of the most expensive option proposed by industry for the same environmental outcomes.  This conclusion echoes many previous government and industry studies that have highlighted the very high cost of deposit schemes.  In addition, a study by ACIL Tasman for the AFGC highlighted the likely volume impact on demand for beer of a full pass through of CDL system and deposit costs.[2] This found that total demand is likely to drop between 4 – 10%, depending on the deposit price and system costs and assuming full cost pass through.

 

What implications does CDL impose on Australian brewers?

 The Brewers’ Association supports further product stewardship efforts where they are shown to be environmentally effective and represent best available cost and efficiency.  Initiatives must also be non-discriminatory in applying to all packaging - not just beverages.  More particularly, policies should not unfairly penalise the beer industry and its customers, nor increase the price that Australians pay for their favourite beer.

 COAG Ministers at their August 2013 meeting added the South Australian container deposit model (now also adopted by the Northern Territory) into the process for assessment and consideration.  The South Australian model excludes wine and some other beverage categories from the remit of the scheme and unfairly penalises beer.  Applying already high system costs across a relatively narrow range of packaging is potentially a double negative – further increasing the cost impact on a per-container basis and potentially skewing consumer purchasing decisions in a highly competitive and price-sensitive beverages market.[3]

 

What alternatives to CDL provide the best outcome?

 The Brewers’ Association rejects CDL and instead urge jurisdictions to invest in the successful partnership model – including the options proposed by industry to build on and better fund the Australian Packaging Covenant (APC) with dedicated packaging litter and recycling programs.  This will accelerate progress at least cost and with the most holistic impact, avoiding negative consumer cost impacts, job losses and other unintended consequences.



[1] http://www.scew.gov.au/publications/pubs/packaging-impacts/att-c-cost-benefit-analysis-report.pdf

[2] ACIL Tasman: National Container Deposit Scheme Impacts September 2011 http://afgc.org.au/psf/psf-research-a-reports.html

[3] ibid.