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AFGC urges consumers to reject container tax

19-Jun-2012
Last updated on 20-Jun-2012 at 09:37 GMT

Australian food industry urges consumers to reject container tax

Australia’s food industry body has launched a nationwide public education campaign to highlight the significant cost impacts that a national drink container deposit scheme (CDS) will have on consumers.

The Australian Food and Grocery Council (AFGC), along with the Australian National Retailers Association, Winemakers’ Federation of Australia and Liquor Retailers Australia, is opposing a government backed scheme where a levy a 10 cent deposit will be placed on every bottle or can of milk, water, fruit juice, soft drink, wine or beer.

The scheme has been proposed via the Standing Council on Environment and Water, as state governments are considering a number of policy options to increase packaging recycling and reduce litter.

Top of the list is a national container deposit system (CDS), set to add the 10 cent deposit to every drink container sold in Australia.

Consumer will pay more

Jenny Pickles, General Manager of the AFGC’s Packaging Stewardship Forum, said that the Australian consumers will however pay much more than 10 cents, adding that Australian families need to understand the real costs of a CDS. 

“They will be forced to pay up to 20 cents more for each and every drink, but can only get 10 cents back. This amounts to hundreds of dollars a year in extra costs that will hit every family’s budget,” Pickles said.

“A CDS is effectively a multi-billion dollar tax on consumers that will further push up cost of living pressures.  That’s been the case in the Northern Territory, where drink prices have risen by up to 20 cents since a deposit scheme was introduced this year,” she added.

According to Pickles, the CDS is a high-cost, inefficient and unfair tax on consumers, and will hurt families already struggling to manage the household budget. “The majority of consumers are already doing the right thing by recycling and not littering.”

Industry will suffer

Pickles added that the imposition of the tax would effectively result in the loss of almost 1,700 jobs per year in the already struggling manufacturing sector.

A recent study by Council of Australian Governments (COAG) found that the net cost of a national container deposit system would be between AU$1.4bn to  $1.76bn over 25 years.

This is at least 28 times more expensive than a co-regulatory, industry-funded proposal that was found to deliver a similar reduction in litter and increased recycling rates, the AFGC said.

“Container deposits are a feel good policy with a billion dollar price tag.  It simply doesn’t add up for Australian families, particularly when there are far cheaper and equally effective policy options on the table for governments to consider,” Pickles said.

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