ANTHONY KLAN
The nation’s beverage companies are making more than $30 million a month from NSW’s Container Deposit Scheme that charges customers a 10c “deposit” for every can or bottle bought in the state under a government measure intended to reduce public litter.
The five biggest drink companies — Coca-Cola Amatil, Carlton United Breweries, Lion, Coopers and Asahi — set up a company called Exchange for Change, which the NSW government under former premier Mike Baird appointed to set up, run and manage the deposit scheme. It was dubbed “return and earn”.
The Weekend Australian can reveal the NSW government, which introduced legislation to allow for the program, made no provisions for what should happen to deposits that were not claimed by the public, leaving massive windfalls in the hands of the drink giants.
The scheme has added up to $4 to the cost of a carton of beer in NSW. The program aimed to reduce the number of individual pieces of litter in public places each year in NSW by up to 2.25 per cent.
It was not targeted at increasing recycling.
The scheme was introduced despite the amount of litter steadily falling in NSW — and nationally — for more than a decade.
The Queensland and ACT governments are preparing to launch similar schemes.
Under the NSW scheme, beverage companies charge customers, by adding a 10-cent per unit “deposit” as well as several cents to cover the costs of the program.
This means that each 10c deposit forfeited is a profit for the companies.
The NSW program started on December 1 last year. To date 204 million cans and bottles have been returned, or an average of 51 million a month.
Every month, beverage companies sell 389 million bottles and cans that are subject to the NSW scheme, meaning an average of 13 per cent of bottles and cans are being brought back.
Each month, the 87 per cent of all can and bottle deposits not refunded are kept by Exchange for Change, which gives the money to the drink manufacturers.
On a rate of 13 per cent of bottles being returned, the manufacturers pocket $34m a month, or more than $400m a year — amounts ultimately paid by consumers at the bottle shop or supermarket.
Adding to the woes of consumers, Exchange for Change depots will take drink containers that are only in near pristine condition.
They refuse to pay refunds unless containers are “uncrushed, unbroken and have the original labels attached”.
That means that every time a can is crushed, a bottle broken or a label falls off a stubby of beer anywhere in NSW the beverage giants make 10c.
Waste Contractors and Recyclers Association of NSW executive director Tony Khoury said the Container Deposit Scheme had not translated into “any material difference” in recycling rates, nor was it intended to.
About 80 per cent of bottles and cans are recycled after households and businesses place them in their recycling bins.
“The kerbside system has successfully collected bottles and cans over the past 30 years,” Mr Khoury said.
He said kerbside recycling bins were still collected and emptied by dump trucks each week.
The only difference was people were now forced to sort out cans and bottles from their recycling and take them to a depot to receive the 10c refund.
Mr Khoury said the scheme was potentially damaging for the environment.
“The trucks are still driving around every week,” he said, but everyone was also forced to drive their own cans and bottles to the nearest depot, increasing petrol use and adding to congestion.
The NSW deposit scheme was announced in 2015 by Mr Baird as part of his program to reduce by 40 per cent the “volume of litter” in NSW by 2020.
In March last year, to allow for the deposit scheme, NSW Environment Minister Gabrielle Upton oversaw the creation of the Waste Avoidance and Resource Recovery (Container Deposit Scheme) Regulation 2017, an amendment to the NSW Waste Avoidance and Resource Recovery Act 2001.
Despite the millions of dollars being collected from the public under the scheme, the legislation set no requirement for what the scheme operator was to do with unclaimed deposits.
Ms Upton and the NSW Environmental Protection Agency declined to comment yesterday when asked whether there was any legislative provision preventing the beverage companies from keeping forfeited deposits.
“Exchange for Change cannot profiteer from the scheme,’’ Ms Upton said.
When pressed, she was unable to point to any legal or contractual requirement to back up that claim.
The NSW EPA said funds managed through Exchange for Change were “part of a closed loop” but the agency was also unable to point to any rules or laws supporting the claim.
Ms Upton said the Independent Pricing and Regulatory Tribunal had been commissioned to “monitor pricing in relation to the scheme, including any profiteering by suppliers and retailers”.
But the minister was unable to say what legal action, if any, the government could take even if the tribunal found that profiteering was occurring.
It would be even harder to take action against retailers because it would involve monitoring every store in the state that sold cans or bottles, but, more importantly, because retailers had no agreements with the state regarding the deposit scheme.
Exchange for Change chief executive Peter Bruce refused to be interviewed yesterday.
In a statement the group said unpaid deposits that had been collected from consumers were handed to the beverage manufacturers if deposits were unclaimed.
Coca-Cola Amatil spokesman Patrick Low said the company was “not looking to profit” from the Container Deposit scheme.
“If we end up with a surplus of funds over time, we aim to get this money back to consumers — for example through price promotions or discounts,” Mr Low said.
Lion Nathan has written to its customers and told them it had collected a surplus of deposits and so would cut its Container Deposit Scheme charge from 12 per cent to 6 per cent from last Thursday.
It remained unclear how Lion Nathan would force retailers, which had raised prices to fund the deposits, to pass on the discounts.
The Queensland and ACT governments were unable to confirm what would happen with forfeited can and bottle deposits under their schemes.
The Queensland government announced last month that it would postpone the introduction of its deposit scheme from July to November, citing the “problematic” scheme in NSW.
The ACT government said yesterday its scheme had been put in “mobilisation phase this week”.
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