Wollongong brewer Five Barrel has lost business because of the government’s controversial Return and Earn scheme, according to owner Phil O’Shea.
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No fan of the scheme – which offers a 10-cent refund on bottles and cans – Mr O’Shea said it is hurting his business and cash flow.
Like most beverage businesses, Mr O’Shea has had to increase the price of his bottled product to try and recoup the costs of the scheme.
Those costs includes giving money to the government, which is used for the customer refund, as well as $80 to register the label for each beer.
Five Barrel has 50-odd beers in its portfolio so the label costs can add up.
As a small producer who prefers to put out limited runs of most beers, it means the price on some can be high because there is no volume to absorb the cost.
The core range price rise is less than 10 cents a bottle but limited-release beers can go up by around 20 cents due to the small number of bottles.
That’s a cost several Illawarra small bars have decided is too much to handle, opting not to stock Five Barrel bottles in their fridges.
“They decided it wasn’t cost-effective any more to put a local craft beer on, they felt like they would have to put the bottle prices up too much,” Mr O’Shea said.
“When they saw that the larger craft players were only passing on a fraction of the cost it obviously made it a lot more attractive to them [to go elsewhere].”
He said the scheme also affected Five Barrel’s cash flow because they had to pay the container deposit charges to the government a month in advance – before being paid for the beer they’d sold.
An Environment Protection Authority spokeswoman said there were allowances in place for small producers.
These included a cap on more than 40 container registrations for businesses that sold less than 2.5 million containers in the previous financial year and financial assistance loans to small businesses in the first months of the scheme.
The spokeswoman said the EPA would consider the changes to the scheme recommended by the Independent Pricing and Regulatory Tribunal.