National Paint Stewardship Scheme

[daniel.wurm]

National Paint Stewardship Scheme



6 October 2014

Update 6 – Retailer Consultation

Scheme in Development

It is estimated that over 24,000 tonnes of architectural and decorative (A&D) paint and
associated packaging, or roughly 6.1% of annual sales, currently becomes waste annually in
Australia (Nolan, 2014).

Waste paint is listed as a Priority Product for development of stewardship arrangements
under the Product Stewardship Act 2011. The Waste Paint Implementation Working Group
(‘Working Group’) with senior representation from the paint industry and government, is
responsible for the development of an industry-led, national scheme to safely and efficiently
recover unwanted paint before it enters the waste stream or the environment.
Based on extensive research, the Working Group has drafted a Scheme Business Plan,
Economic Model and 5 year Financial Plan to be submitted to the Australian Competition
and Consumer Commission (ACCC) requesting a recovery levy to be placed on A&D paint
sold nationally. Financial modelling suggests that to provide safe, accessible drop-off
facilities for both trade painters and householders across Australia the levy will be
approximately 1% of the paint shelf price. It is likely that the ACCC application will be
submitted in October 2014 in time for the ‘PaintCare’ Scheme to commence mid-2015.

Consultation Sessions Begin

To underpin the development of the scheme a considerable amount of consultation is
required to ensure the Scheme is efficient, safe and fit for purpose. Industry-led
consultation sessions, focussing on the Scheme’s proposed business plan have begun with
the first session held at Melbourne Airport for paint retailers and speciality paint
distributers. The session was well attended and opened with presentations from Mr Bruce
Edwards, Assistant Secretary Waste Policy, Commonwealth Government; Ms Diana Gibson,
Independent Chair of the Working Group and Mr Richard Phillips, Executive Director,
Australian Paint Manufacturers Federation. An open Q&A session followed with questions
from retailers surrounding how the levy will be collected and distributed and what were the
requirements from an invoicing perspective. Concerns were raised around the ‘free rider’
issue from paint importers not in the Scheme and the possibility of retailers becoming part
of the collection network. The Working Group is working closely with the retailers to address the issues raised at the session to ensure all questions are answered and the high level of support for the Scheme is
maintained.

Further consultation sessions will be held in early 2015 in capital cities and major regional
centres. Stakeholders will be informed of the Schedule in the next few months and invited
to attend.

Background Work

All updates, research and underpinning documentation are available for review online at
www.sustainability.vic.gov.au./paintstewardship

Opportunity to comment

The Working Group encourages all stakeholders to comment or request further information
on the progress of the scheme.

For more information please contact the Secretariat, Paint Stewardship, Implementation
Working Group at PaintStewardship@sustainability.vic.gov.au or submit formal comment to
Richard Phillips, Executive Director, Australian Paint Manufacturers’Federation at
richard.phillips@apmf.asn.au

[daniel.wurm]

National Paint Stewardship Scheme
PaintCare
February 2015
Update 7 – Second Retailer Consultation Forum Scheduled
Scheme Development Nears Completion

It is estimated that over 24,000 tonnes of architectural and decorative (A&D) paint and
associated packaging, or roughly 6.1% of annual sales, currently becomes waste annually in
Australia (Nolan, 2014).

Waste paint is listed as a Priority Product for development of stewardship arrangements
under the Product Stewardship Act 2011. The Waste Paint Implementation Working Group
(‘Working Group’) with senior representation from the paint industry and government are in
the final stages in the development of an industry-led, national scheme to safely and
efficiently recover unwanted paint before it enters the waste stream or the environment.

Business Plan Reviewed

Based on extensive research and consultation, the Working Group has drafted the following:
• a Scheme Business Plan
• Economic Model, and
• a 5-year roll out strategy
This work will underpin an application to the Australian Competition and Consumer
Commission (ACCC) requesting a recovery levy to be placed on A&D paint sold nationally.
Financial modelling suggests that to provide safe, accessible drop-off facilities for both trade
painters and householders across Australia the levy will be in the region of 12c per litre plus
GST on the sale of participating brands new A&D paint. To qualify this, the APMF engaged
Golders and Associates to assess the economic model and independently review the
assumptions and calculations used in determining the levy.

Golders reported that the key assumptions used in the modelling were reasonable and the
flow of calculations to cost the Scheme correct. Based on the Golders recommendations
contained in their report, some minor adjustments were made for projected tonnages in
Western Australia and more accurate costings have now been obtained and used for
Tasmania. These adjustments were minor and did not impact on the proposed levy of 12c
per litre. The Golders report provides a level of surety to manufacturers, retailers,
governments and consumers that the modelling is as accurate and fit-for-purpose as
practicable and, to support an application to the ACCC. Second Retailer Forum
To inform development of the Scheme, a considerable amount of consultation is required to
ensure the Scheme meets the needs of the supply chain and consumers and is efficient, safe
and fit-for-purpose. The second industry-led forum with major retailers and speciality paint
distributers is set for Thursday 26 February at the Stamford Hotel, Sydney Airport.
Its purpose is to inform retailers on progress in the Scheme’s development and bring to the
table mitigating strategies that address concerns raised at the previous retailer forum in
August 2014. This will include plans for engaging any future importers into Australia of A&D
paint that are not signatories to the scheme. As a mitigation strategy to minimise the
potential for ‘free riders’, the supporting paint manufacturers, Dulux, PPG Industries,
Haymes, Valspar and Resene Paints have agreed to include in the Scheme not only all A&D
paint they manufacture in Australia but also what they import under their collective brands’.
Should fluctuations occur in the A & D paint import market, industry and government have
agreed to engage with those paint companies and resellers to ensure the maximum level of
support for the Scheme is achieved.

If you wish to attend the Retailer Forum, please contact the APMF at
richard.phillips@apmf.asn.au

Next stages

Following the Retailer Forum and finalising the paint manufacturers’ agreement, the APMF
aims to submit the ACCC application as soon as the key stakeholders are aligned in their
support of the final business plan and economic modelling. It is anticipated that this will be
achieved in late March 2015. This will be followed by public consultation and rigorous
assessment of the business plan and economic model conducted by the ACCC against the
Trade Practices Act to ensure public benefit is assured. Assuming favourable consideration
by the ACCC the proposed ‘PaintCare Scheme’ will be operational early 2016.

Background Work

All updates, research and underpinning documentation are available for review online at
www.sustainability.vic.gov.au./paintstewardship

Contact Information

The Working Group encourages all stakeholders to comment or request further information
on the progress of the scheme at any time.
For more information please contact the Secretariat - Paint Stewardship, Implementation
Working Group at PaintStewardship@sustainability.vic.gov.au or submit formal comment to
Richard Phillips, Executive Director, Australian Paint Manufacturers’Federation at
richard.phillips@apmf.asn.au