The Brewers Association says it is concerned with a number of elements in Sunday’s released consultation document on the implementation of a Container Deposit Scheme (CDS) in New Zealand.
It says while the Association and its members are committed to improving recycling rates and litter reduction and welcome the recent announcements on the standardisation of kerbside collections by the Ministry for the Environment, the proposal will incur more costs for brewers.
“The proposal suggests a 20c deposit plus a management fee, which would result in an approximate $8 or 20% increase on a 24 case of beer if the full cost is passed onto the consumer,” says Brewers Association Executive Director, Dylan Firth.
“It is important to understand that even if consumers choose to redeem their deposit, there are still more costs involved in the proposed scheme with the management fee and GST added.
“Given the price-sensitivity of many New Zealanders following COVID-19 outbreak and record levels of inflation this is an enormous cost to assume New Zealand consumers will be able to absorb. The 20c deposit is also out of step with schemes in Australia at 10c,” he says.
Consumer research shows that while more than 80% of adults support a CRS, this drops to 51% when the increase in the cost of a case of beer was taken into account.
“We would also like to bring to attention the massive cost this will have on small businesses who will now be required to take part in a CDS, the COVID pandemic has crippled many small businesses in the last three years especially in the hospitality sector,” says Firth.
“We note that the proposal has given almost no thought to how the CDS would work for these businesses who are large consumers of beverage containers and have unique recycling arrangements.”
Firth says the cost benefit analysis that accompanies this proposal has stated there will be a 6.5% reduction in consumption due to the increased deposit and management fee if passed on to the consumer.
“In a time where hospitality venues have been decimated through lack of customers in a pandemic, a proposal that could further reduce those sales is just another blow to businesses.
“We should also highlight that an impending increase of beer excise tax – the highest in 30 years – will further push consumers budgets to the limit. At a time when Government is considering ways to reduce costs for consumers with the just announced fuel tax reduction and halved public transport fares, the CDS announcement seems like another blow for consumers.”
Firth says The Brewers Association of New Zealand and will continue to engage with the process put forward by the Ministry for the Environment with the desire that their concerns and questions will be addressed.
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