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Australian Court rules Northern Territory’s container deposit scheme illegal

Australian Court rules Northern Territory’s container deposit scheme illegal, Northern Territory, Coca-Cola Amatil (Aust) Pty Ltd (CCA), Schweppes Australia Pty Ltd, Lion Pty Ltd
The Australian Federal Court has ruled that the Northern Territory’s container deposit scheme is illegal and does not apply to containers imported into the area.

Introduced in January 2012, the Northern Territory’s deposit system refunds consumers 10 cents when they return plastic and other containers at collection depots.

The program was opposed by Sydney-based Coca-Cola Amatil (Aust) Pty Ltd (CCA), Melbourne-based Schweppes Australia Pty Ltd and Sydney-based Lion Pty Ltd – which launched legal action in the Sydney Federal Court, arguing the scheme conflicts with a federal law governing trade between the states and territories because it requires different production processes for the same product. The brand owners cited the Commonwealth Mutual Recognition Act 1992, which ensures goods and services are provided in all state and territory jurisdictions under the same conditions.

Lion also complained that since the scheme was implemented in the Northern Territory, prices of beverage products increased as the deposit was factored in along with the administrative charges for the scheme.

When the scheme was introduced, it had a temporary 12-month exemption from the federal law.

Earlier in March 2013, the Federal Court ruled that the territory’s deposit system does not apply to containers imported into the Northern Territory after 3 January 2013. Justice John Griffiths stressed that the proceedings focused on the legal issues arising between conflicting federal and Northern Territory laws, and noted that when there is a conflict, federal law “must prevail”.

With this new ruling, beverage brand owners can now freely import their products into the Northern Territory for sale without getting hit by a container tax.

CCA was the first to reduce its wholesale prices there after the ruling, explaining in a press statement that it could do so as it is no longer being taxed. The company stressed that it is not against recycling initiatives, but disagreed with the effectiveness of the container deposit scheme.

“The NT scheme, which has been operating for more than 12 months, has been an environmental failure with just 1 out of 3 containers sold being recycled — well below the national average”, CCA claims.

The battle is not over yet though. The Northern Territory government is currently seeking advice on grounds of appeal on the Federal Court ruling.

In addition, the Council of Australian Governments (COAG) is expected to announce on 11 April their recommendations with regards to a national container deposit scheme that will see all states and territories introducing a similar scheme to that which South Australia has been using for four decades, thus removing the possibility for any legal challenge under the Commonwealth Mutual Recognition Act.


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