Brewing industry hopes for clarity on Container Deposit Scheme

Eagle Bay Brewing Co. co-owner Adrian d’Espeissis and Vasse MLA Libby Mettam welcome the scheme but hope the impact on small craft brewers will be taken into consideration. Image Sophie Elliott.
Eagle Bay Brewing Co. co-owner Adrian d’Espeissis and Vasse MLA Libby Mettam welcome the scheme but hope the impact on small craft brewers will be taken into consideration. Image Sophie Elliott.

The implementation of a state-wide container deposit scheme is set to become a reality for WA in 2020.

The state government's Waste Avoidance and Resource Recovery Bill (Container Deposit) 2018 was passed by the Legislative Council on March 14.

Under the new scheme, WA consumers will receive a 10 cent refund when they return eligible empty beverage containers to refund points throughout the state.

Projections show the container deposit scheme will result in 706 million fewer beverage containers littered by 2037 and reduce the number of containers disposed of to landfill by 5,902 million.

The next major step - following establishment of applicable relevant regulations - will be the announcement of the scheme co-ordinator who will be responsible for developing the state-wide collection network and managing contracts with operators of refund points.

Environment Minister Stephen Dawson said the scheme was a win for the environment and a win for the economy.

"I'm confident the scheme will not only reduce litter and increase recycling throughout WA, but provide business opportunities for social enterprises and help charities and community organisations raise money to fund vital community work," he said.

While the scheme has received resounding support throughout the state, one of the South West's growing industries hopes it will not have a detrimental impact on its future.

WA's brewing industry supports the new legislation from an environmental perspective.

However, their concerns stem from how the industry-funded scheme will result in higher beer prices for consumers and therefore, a greater price disparity between craft breweries and multinational beer giants.

Eagle Bay Brewing Co. co-owner Adrian d’Espeissis explained what it meant for his family-run brewery.

"We definitely support the scheme and the recycling purpose of it, it is just the cost to small producers is going to hurt quite a bit," he said.

"It is basically adding $4 to a carton, in turn, we pass that on to our customers as the margin for craft beer is very small, we are only making very small lots, and we don't have the buying power of the big guys," he said.

"The concern is that the gap between small craft breweries and big multinationals, and the price difference, is going to increase because the multinationals will be able to absorb the refund to a certain extent because of their economy of scale.

"Their cost of goods are less than a small producers, they have mass production, the bottles are cheaper, the caps are cheaper, the labels are cheaper, everything is cheaper and on a grander scale. I guess it's going to be the price disparity it creates that will make it harder as a small business to succeed."

Mr d’Espeissis said there was still a lot of uncertainty around how the scheme would be delivered.

"I guess we want there to be transparency so customers understand the cost of their goods and how/ why it is going to change," he said.

"At this point in time, we don't know if there will be any rebates for small businesses.

"Time will tell huge if it has an impact on beer sales or not, if it does, there are the usual issues of possible unemployment and all that sort of thing. There is also a flow on effect to all the support companies that we buy off and sell to, the impact is quite wide ranging."

When the scheme was debated in parliament, Vasse MLA Libby Mettam and other politicians commended the scheme and raised concerns relevant to their electorates.

Ms Mettam broached the subject of small businesses in WA, such as the small breweries in the South West, that would find it harder to absorb increased costs.

"As with any other piece of public policy, it is important we strike the right balance, in this case, between the environmental benefits and the impost on small business," she said.

"How that will play out in regulation is an important concern. This is an important initiative and it is important to get the balance right."

Parliamentary Secretary to the Minister for Environment and Baldivis MLA Reece Whitby responded to Ms Mettam's concerns.

He said the government had observed the legislation being introduced in other states and had made changes to address issues that had caused concern.

Mr Whitby said small beverage producers were present on the technical working group and the government continued to be very aware of their concerns.

"We continue to work with our friends in the small beverage and small brewer community; they are part of the working group and we hope to further assist them through the development of regulations at a later date," he said.

A Department of Water and Environmental Regulation spokesperson said the container deposit scheme would bill beverage suppliers based on container returns.

"The intention is to ensure that responsibility for funding of the scheme is allocated as high in the supply chain as possible. It will mainly be large beverage manufacturers such as Lion Nathan and Coca-Cola Amatil or large supermarkets such as Coles and Woolworths which will be responsible for funding the scheme," they said.

"Suppliers need to know how much to charge per container months ahead, the scheme uses an estimation methodology to calculate the number of containers to be returned."

​Like Mr d’Espeissis and Ms Mettam, Western Australia Brewer’s Association president Dan Turley hopes the impact on the association's members would be taken into consideration.

"It will definitely push the price up for small producers," he said.

"We are talking $3 to $4 a carton at least, that increase cost is the refund, administration fees and the extra time, a lot of these brewers are pretty flat out running venues as well as producing.

"All the details are still to be confirmed but the price of beer is definitely going to go up and that is going to affect producers.

"Our concern is, it is going to push these small producers' products just out of the price range for customers, who many then go for a cheaper product from overseas or an eastern state producer."

Mr Turley said the association had appreciated being part of the consultation and had put forward a submission on the outcome they would like to see for their members.

"We like to see a rebate, either a monetary rebate or that you don't start contributing to the scheme until you reach a certain level of production," he said.

" At this stage, it is looking unlikely the state government will agree to ant rebate. Implementation is still 12 months away and there is still water to go under the bridge so we just have to wait and see."