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June 21, 2008

Sunday Mail

Deposit rise to hit drink prices

BOTTLED and canned beer, soft drinks, flavoured milk, iced coffee, fruit juices, sports drinks, iced tea and bottled water will cost more from September 1 when container deposits will double to 10c.

The price rise is expected to exceed the 5c a container deposit rise and is predicted to trigger a Seinfeld-style cross-border trade of used containers from NSW and Victoria.

Industry sources say people may be already stocking up on containers after a notice sent to producers advised that all such containers, including those marked with a 5c refund, will be eligible for the 10c refund from September 1.

The State Government recently announced the container levy would rise this year, but did not give a date.

Return rates on containers have declined from around 84 per cent to 70 per cent as inflation has gradually reduced the incentive to return containers. The deposit, introduced 31 years ago, has helped make SA the nation's best state for recycling, exceeded only by the ACT. However, beverage producers say they will have to pass on the extra costs to consumers.

These include the cost of printing new labels while retailers will add their percentage mark-up to the higher wholesale price.

This will see a 10c levy equate to about 13c in shops, wholesalers say.

"We will have to pay for it, and most of it will have to be passed on to consumers, that's the reality," said one beverage producer who asked not to be named.

Australian Hotels Association SA general manager Ian Horne warned SA risked being flooded by interstate containers. "From Broome to Hobart to Cairns, if you buy a container it says 5c refund payable in SA," he said. "Now every container will be worth 10c, even if you did not pay the container deposit, so there is a huge incentive to bring them into SA and claim the refund – it is scary stuff. This has the potential to break the system." Mr Horne said the deposit system had put SA into a world class in returned containers.

But he noted SA working in isolation from neighbouring states without similar legislation created an incentive for people to stockpile containers and claim the refund.

Such a caper was portrayed in TV show Seinfeld when characters Kramer and Newman drove a truck filled with recyclable containers interstate to collect a 10c levy.

Environment Minister Gail Gago confirmed the September 1 start date and said petrol prices would deter interstate scams.

"South Australians do not need to be out of pocket because we can all choose to redeem the increased deposit price of 10c," she said.

"We are working to minimise impacts of hoarding; legislation before Parliament allows collectors to ask for a statutory declaration stating the origin of a load and to refuse a load if they have any doubt about their state of origin."


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