Yet despite its benefits and the overwhelming support it receives, CDL is aggressively opposed by a powerful vested interest group. The beverage and container manufacturing industries have lobbied against CDL in New South Wales and other states since its successful introduction in South Australia in 1977. Their defiant stand is unsurprising considering they have been the prime beneficiaries of the infiltration and eventual domination of one-trip containers throughout Australia (other than in SA) during the past 15 years.

ECONOMIC IMPACT OF ONE-TRIP CONTAINERS

Higher Prices

All members of the community pay for the supposed convenience of one-trip containers by bearing increased waste disposal and litter collection costs, and more recently the cost of subsidised recycling schemes. These extra expenses are passed on to consumers and rate-payers by industry and government via inflated prices, increased taxes and higher local government rates.

Business Closures and Higher Unemployment

An additional burden on the economy has been caused by the impact of one-trip containers on small businesses and employment.

From 1974 to 1989 the number of soft drink companies in NSW fell by 80% from 135 to just 27. Correspondingly, employment in the industry fell from over 3500 to around 1600 jobs. Less than half the number of people employed in the industry in 1974 still had their jobs in 1989 [7].

Despite these statistics, soft drink production in NSW increased by a staggering 50% over the same period! But how could this happen...?

The US experience described by Scott and Moore [17, p.56] is equally true for Australia:

"As one way containers eliminated the need to return empties to a bottling plant for refilling, beverages could be shipped over much longer distances. This enabled producers, especially breweries, to construct huge bottling and canning facilities ... result(ing) in bigger market shares for national brewers and a concentration of the industry. Many of the small regional brewers were either bought up or driven out of business."

A direct consequence of the reduced competition resulting from these dramatic changes in the beverage market has been significantly higher prices.

CDL has been highly successful in reversing these trends.

THE BRRU REPORT - INDUSTRY'S GREAT DEFENCE

In an attempt to justify their past actions and maintain their present favourable position, beverage and container interests cite a study (funded by themselves) by the Business Regulation Review Unit (BRRU). In light of its source of funding it is unsurprising that the report concludes CDL would cost Australia $500 million and that we only face a $50 million problem [3, p.94].

Criticism of the BRRU report has come from such sources as the Australian Consumers' Association [18] and the Centre for South Australian Economic Studies [19]. The report's questionable economic methodology and source of funding has made it the subject of close scrutiny and exposed its intellectual crudity.

In brief, the main criticisms of the BRRU report are:

• it only considers a narrow range of benefits - litter and waste disposal - and these are heavily understated,
• impacts on production costs are obtained from questionable sources,
• 'inconvenience costs' are highly overstated,
• the report was partly funded by the Litter Research Association (LRA) - a beverage and container industry interest group.

As a result of these findings, few outside the vested interest groups opposed to CDL regard the BRRU report as a credible document.

ECONOMIC BENEFITS OF REFILLABLES AND CDL

By achieving high container recovery rates and returning them to their original fillers, CDL encourages the use of refillables. This promotes a greater level of competition by enabling smaller businesses to enter the market. As a result, the cost of affected products and community services is generally reduced over time.

Lower Prices

Studies have consistently found refillables the least expensive container alternative. This is because production costs are distributed over the many trips these containers achieve. Refillable containers result in the more efficient use of energy and resources, less pollution and reduced waste for disposal when compared with one-trip containers. These benefits are ultimately passed on to consumers in the form of cheaper prices. For example:

• US studies show drinks are 20 to 40% cheaper when purchased in refillable containers [6].
• A South Australian Government study shows that its beer, in refillable bottles, is the cheapest in Australia [20, pp.24-26].
• In NSW, the maximum allowable price for milk is almost 6 cents per litre cheaper in refillable glass than the next cheapest packaging option (see Figure 3 below) [21].

Reduced Government Costs

Additional savings attributable to CDL arise from the reduction in litter collection and waste disposal costs and avoidance of the need to subsidise voluntary container collection schemes.

• Reduced litter means less government money is needed for clean-ups. The Maine Department of Transport, for example, estimated their highway clean-up costs have halved since the introduction of CDL [17, p.58].
• As waste disposal charges rise to reflect diminishing disposal capacity, CDL will prevent much of this extra expense being borne by the community.
• In contrast to CDL, voluntary container collection schemes are typically uneconomic and require subsidy - again at the expense of the community. While deposit systems typically achieve high return rates (approaching 100%) and encourage re-use, voluntary container collection schemes, such as 'kerbside', experience low return rates, collection inefficiencies, and fail to encourage re-use (see also "CDL & Kerbside" - Appendix II).

A Boon to Small Business and Employment

By encouraging decentralisation (as a consequence of the shift to a refillable system) CDL acts to promote smaller fillers and encourage new businesses to enter the market. In doing so CDL fosters a greater level of competition and creates employment.

Experience has shown that wherever deposit legislation has been introduced, a net increase in employment inevitably results. The introduction of deposits on beverage containers in NSW will create around 3000 jobs. Extension of the system to cover other containers in the waste stream would create even more employment.

Improved Balance of Trade

Many of the one-trip containers currently available are made of imported materials from the US and Europe (PET plastic bottles and paperboard cartons being the best known examples). CDL would lead to a reduction in these raw material imports in line with the greater level of resource conservation attributable to the shift to refillable and recyclable containers.

WHAT EFFECT ON INDUSTRY?

There is little doubt the introduction of CDL will cause some restructuring of the beverage and container industries. However, such an impact is necessary to re- establish the supply of refillables, boost employment, and improve the recycling rate for containers far beyond the level expected for voluntary container collection and recycling schemes.

As affected companies make the conversion from one-trip to refillable containers some capital outlay for bottle washing equipment will be required. However, any argument against CDL for this reason has little substance considering:

• bottle washing and re-use actually reduces per-use container costs.
• new businesses involved in the washing and resale of bottles will enter the market.
• SA beer and soft drink bottlers have not experienced any adverse business effects from refillable bottles. The Marketing Manager of C-C Bottlers Ltd, for example, has stated [22] "re-using bottles had proved a healthy economic proposition".
• any initial capital expenses which may be necessary will reflect the price producers must pay to accept responsibility for, and avoid the disposal costs of, the containers they generate.

For too long beverage and container manufacturers have reaped excessive profits from one-trip containers at the expense of consumers and rate-payers. Since these industries first chose to undermine the market for refillables, the community has been forced to bear the costs associated with fewer jobs, more expensive products, litter collection and waste disposal and, more recently, subsidising voluntary container collection and recycling schemes. Given the opportunity CDL will help to reverse this inequity in NSW.