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Soft drink companies welcome Australia decision against container deposits

By: Kate Tilley

March 7, 2013

SYDNEY, AUSTRALIA — Three of Australia's major beverage companies have welcomed a court ruling that a container deposit scheme does not apply to containers imported into Australia's Northern Territory.

The Northern Territory Government introduced a deposit system — commonly called cash-for-containers — in January 2012. Under the program, consumers are refunded 10 cents when they drop off plastic and other containers at collection depots.

But three beverage manufacturers — Sydney-based Coca-Cola Amatil (Aust) Pty. Ltd. (CCA), Melbourne-based Schweppes Australia Pty. Ltd. and Sydney-based Lion Pty. Ltd. — launched legal action in the Federal Court in Sydney, challenged the legality of the Northern Territory's program.

The bottlers argued the scheme conflicts with a federal law governing trade between the states and territories because it requires different production processes for the same product. When the scheme was introduced, it had a temporary 12-month exemption from the federal law.

On March 4 Federal Court Justice John Griffiths ruled that the territory's deposit system does not apply to containers imported into the territory after Jan. 3, 2013.

Griffiths said the proceedings did not consider the scheme's merits or desirability, but focused on legal issues arising between conflicting federal and Northern Territory laws. He said where conflict existed, the federal law "must prevail."

In a media release, CCA said the decision means the "container tax" does not apply to its products sold in the Northern Territory, so it reduced its wholesale prices there on March 5.

CCA said the territory's scheme is "an environmental failure" because only one in three containers sold is recycled, which is below the national average.

"Under current industry-driven recycling schemes, Australia's packaging recycling rate has increased from 39 percent in 2003 to 63 percent in eight years," the company said.

"[Deposit schemes] have consistently been found to be the most expensive and inefficient method of increasing recycling rates. That's why they have been repeatedly considered and repeatedly ruled out for decades by Australian governments."

But Sydney-based Total Environment Centre Executive Director Jeff Angel said an efficient, low-cost deposit scheme will not impose additional costs.

"Not only are there guaranteed environmental benefits, but the financial case is clear. A national [deposit scheme] will produce A$1.8 billion in funds in the first five years — supporting the establishment of hundreds of drop-off centers for containers and other products and other recycling and litter programs."

Angel said the court action is only a "temporary win" for CCA because the Northern Territory Government can apply for a permanent exemption from federal law.

"[The court action] was a desperate move by a company that is trashing its reputation every day," Angel said.

Sydney-based Clean Up Australia CEO Terrie-Ann Johnson said the court's decision is disappointing, but she understands Northern Territory Chief Minister Terry Mills has political support to apply to extend the exemption.