Australian drinks industry: Container tax is not skewing prices

By Ankush Chibber

- Last updated on GMT

Australian drinks industry: Container tax is not skewing prices

Related tags Coca-cola

The Australian beverage industry has come out strongly against claims made by an environmental lobby group that drink makers are benefiting from a newly introduced ‘container tax.’

The container tax refers to the National Drink Container Deposit Scheme (CDS) where a 10-cent deposit will be placed on every bottle or can of milk, water, fruit juice, soft drink, wine or beer.

In a report last week, the environment lobby group Boomerang Alliance said South Australian and Northern Territory consumers are being charged up to 24 cents more per container by Coca-Cola than in other states.

Consumer advantage?

“Three of the largest beverage manufacturers in the country are taking advantage of consumers by massively overcharging for the costs of these recycling schemes,”​ said Dave West, national policy coordinator for the Alliance.

The study examined the price of 20 common beverages in Adelaide, Darwin, Perth and Sydney and fingered Coca Cola, Lion Nathan and Schweppes as the worst overcharging culprits.

In addition, they were also keeping unredeemed deposits and making big profits from funds that should be ploughed back into the scheme, the Alliance said.

“The result of their profiteering is consumers are being slugged with drink price increases of up to 20 cents while beverage producers are retaining unredeemed deposits as profit,”​ West said.

“By our estimates Coca-Cola, Lion Nathan and Schweppes are on track to pocket over $20million from South Australia and The Northern Territory alone.”

AFGC calls claims baseless

The Australian Food and Grocery Council [AFGC]has not taken the report lying down. Jenny Pickles, AFGC general manager of the packaging stewardship forum, said called the allegations ill-founded.

“This matter has been thoroughly investigated by the Northern Territory’s Consumer Affairs Commissioner.​ In May 2012, the Commissioner announced that his investigators had found no evidence of retailers excessively putting up prices under the guise of the Territory’s CDS,”​ she added.

Pickles pointed out that state environment ministers are soon to meet to consider a range of options, including a national CDS to increase recycling rates and reduce litter.

Stating that there will be cheaper and better alternatives when ministers meet in late August, Pickles urged them to, “choose a scheme that does not slug families with an extra $300 per year on their grocery bills.”

“You can't add a 10 cent deposit to every bottle and can of milk, juice, water, soft drink, beer and wine, plus set up a whole new system so people can redeem their deposit, without it raising prices at the checkout,”​ Pickles said.

“Even environment groups agree that a national CDS will see prices rise.”

Related topics Policy Oceania Beverages

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