New Zealand glass tariff could cause problems

A new tariff on glass imports reinstated by the New Zealand government could, according to breweries, increase the price of wine and beer and other food and drink packaged in glass.
The tariff is aim…

A new tariff on glass imports reinstated by the New Zealand government could, according to breweries, increase the price of wine and beer and other food and drink packaged in glass. The tariff is aimed at encouraging businesses to buy their glass locally, but will cause serious problems to breweries with existing long-term contracts. According to Lyn Mayes from the Glass Packaging Forum, the tariff is a “relic of a bygone era. It used to be in place, and has just been reinstated by the government. No one thought it would come back in. The government is saying at the moment that they won“t review tariffs until 2015. We“d like them to have a look at it now.” She said that contracts had been signed without knowing the tariff would come back. O-I is one of the companies that will benefit from the arrangement. It has, in fact, been producing great numbers of bottles for the past month and has also spent USD 125 million on its New Zealand operation, creating 40 jobs. It is the only factory in the country making beer bottles and has already recycled about a third of all the glass used in New Zealand. Al Stroucken, O-I chief executive, is pleased with the protection offered it by the tariff. “It“s only logical that if we make an investment in a manufacturing facility that we want to employ people locally.” “Just like freight, duties and other charges are part of the total cost structure and they have to make a determination whether it“s beneficial to them to continue importing.” According to the New Zealand government, the tariffs will remain in place for at least another five years.