Thursday, August 18, 2022

Small drinks firms upset over exempt milk

Not all are happy with dairy milk containers getting exemption. Small drinks companies say carving out dairy milk products from a new container return scheme is “unfair and inequitable”.

The scheme proposed by the Ministry for the Environment gives fresh dairy products a free pass from imposing a 20 cents refundable deposit on their retail price.

The scheme proposed by the Ministry for the Environment gives fresh dairy products such as milk and cream a free pass from imposing a 20 cents refundable deposit on their retail price that all other beverages in single-use metal, glass, paperboard and plastic materials will have to adopt.

Almighty Drinks director Ben Lenart said he was concerned the scheme will hit small companies like his, which make canned and bottled beverages using organic produce, while major dairy companies such as Fonterra and Goodman Fielder were exempt.

“We’re on board with the scheme and are all for it, but the exclusion of fresh milk containers is deeply flawed,” Lenart said.

“For the life of me, I just don’t understand how fresh dairy – one of the biggest contributors to New Zealand’s waste problem – was excluded.”

He said he was worried about the “inflationary impact” of the scheme’s proposed 20c deposit and how it would flow through Almighty’s products.

He had calculated that the proposed 20c would result in a 15-22% price increase on Almighty’s beverages.

“The reality is that it’s going to hit consumers hard in the pocket,” he said.

Government data showed fresh milk prices rose at an annual pace of 7.6% in March, outpacing the 2.5% rise in soft drinks, waters and juices.

Plant milk producers such as Otis Milk and All Good question why they’re included in the proposed scheme when dairy is exempt.

Otis Milk head of market Hayley Pardoe said the dairy carve-out was “hugely disappointing and demoralising”.

“If we’re wanting to do what’s right for the environment, then we can’t be treating plant-based products differently from dairy,” Pardoe said.

She said the scheme created a “barrier” for small NZ businesses that were “just trying to do the right thing” and gave large dairy companies an unfair advantage.

“As a small company trying to make genuine change, we shouldn’t be the only ones paying the price,” she said.

Chris Morrison, the co-founder of All Good, which produces a range of oat milk and stocks almost 1000 cafés nationwide, was also concerned about the unfair advantage large companies get from the exclusion.

“To be honest, we don’t really feel like it’s an even playing field when bigger corporations aren’t going to be included in the scheme,” Morrison said.

“We’re disappointed as it does feel like the scheme is going to be a disadvantage to smaller brands like us,” general manager Faye MacGregor said.

“This scheme damages entrepreneurship in the plant milk industry by excluding large brands like Fonterra and Goodman Fielder and their dairy milks.”

A spokesperson for the Ministry said it was aware people had “strong views” on the dairy exemption, but that was “consistent with many overseas schemes”.

“The rationale for exempting fresh milk is because fresh milk is often considered a household staple,” they said.

“Where milk is consumed at home, the containers are already mostly captured through kerbside recycling.”

They said if the scheme goes ahead it won’t start until 2025, meaning small firms wouldn’t feel the impact for another three years.

Not every small drinks company was down on the scheme. Little Island Creamery co-founder James Crow said “it’s a fantastic thing and we totally welcome being part of it”.

He thought the success of container return schemes overseas was a “good sign” that it would work in New Zealand

“Small brands like us have to be brave and face challenges like recycling because we don’t benefit by avoiding them,” he said.

Fonterra and Goodman Fielder did not reply to requests for comment before the time of publication.

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