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AUSTRALIAN BEVERAGES COUNCIL LTD

ABN 12 115 440 166

Chief Executive Officer:

Tony Gentile

Suite 4, 6-8 Crewe Place ROSEBERY NSW 2018

AUSTRALIA

Telephone +61 2 9662 2844 Facsimile +61 2 9662 2899

Email: [email protected]

ww.australianbeverages.org

ANNUAL REPORT 200620062006 AUSTRALIAN BEVERAGES COUNCIL LTD

Contents

Report from the President 1 Report from the CEO 2 Report from the Treasurer 3 Public Affairs Report 4 Science & Regulatory Affairs Report 6 Financials Directors Report 10 Directors Declaration 11 Independent Audit Report 12 Statement of Financial Position 13 Statement of Cash Flow 14 Notes to the Financial Statements 16 Statement of Financial Performance 18 Committee Lists 19 Current Members 21

AUSTRALIAN BEVERAGES COUNCIL LTD ANNUAL REPORT 2006 21

Members Bottler Members Alchemy Cordial Company Alpine Beverages Pty Ltd Aygee Gippsland Pty Ltd Beaudesert Soft Drinks Bertshell Pty Ltd Bevco Pty Ltd Bickfords Australia Pty Ltd Bundaberg Brewed Drinks Pty Ltd Byron Drinks Cadbury Schweppes (Aust) Pty Ltd Cantarella Bros. Pty Ltd Cascade Beverage Company Coca-Cola Amatil (Aust) Pty Ltd Coca-Cola South Pacific Pty Ltd Cooks Soft Drinks Crestbrook Mountain Springs Crows Nest Cordials Pty Ltd Fosters Australia Frucor Beverages Ltd Golden Circle Ltd Hopes Goulburn Cordials Pty Ltd IQ Beverages Jalco Food & Beverages Jolt Corporation Australia Pty Ltd Juicy Isle Pty Ltd Lillyman Bros P & N Beverages Australia Pty Ltd Pakval Pty Ltd PepsiCo Australia Holdings Pty Ltd PET Technologies Ltd Red Bull Australia Pty Ltd Saxbys Soft Drinks Pty Ltd Solis Beverages Holdings Pty Ltd Stanwells Cordials & Confection Unilever Australasia Vita Mia Pty Ltd Wimmer Marketing Suppliers ABN Amro Australia AET Films Inc Air Liquide Australia Limited AMCOR BEVERAGE CANS Australasia BOC Limited Brooke-Taylor & Co Bundaberg Sugar Ltd CHR Hansen Cormack Packaging Pty Ltd Domnick Hunter Pty Ltd Ecolab Pty Ltd Firmenich Ltd Functional Packaging Solutions

Givaudan Australia Pty Ltd International Flavours & Fragrances (Aust) Pty Ltd Johnson & Johnson Pacific Kerry Ingredients KHS Pacific Pty Ltd Macquarie Bank Manildra Harwood Sugars MeadWestvaco Nutrinova (Australasia) Pty Ltd Orford Refrigeration Pty Ltd Quirks Australia Sanden International (Australia) Pty Ltd Scholle Industries Pty Ltd Sensient Technologies Australia Pty Ltd Sopura Australia Pty Ltd Sugar Australia Pty Ltd Symrise Pty Ltd The Le Mac Australia Group The NutraSweet Company Pty Ltd The Product Makers (Australia) Pty Ltd VisyPak Beverage Packaging Association Members Australian Beverage Enterprises Co-operative Society Ltd Aluminium Can Group

20 AUSTRALIAN BEVERAGES COUNCIL LTD ANNUAL REPORT 2006 AUSTRALIAN BEVERAGES COUNCIL LTD ANNUAL REPORT 2006 1

PepsiCo, be restricted to no more than two executives from each group. This includes office bearers.

Industry Statistics

An industry’s credibility often rests on its ability to rely on sound information in the arguing of its case with Governments, the bureaucracy or the media. For over ten years the Council’s predecessors have successfully collected through the membership, carbonated soft drink statistics.

This year, the staff is making a valiant attempt, to expand the range of categories covered by our collection as a direct reflection of the broader responsibilities we have assumed within the non-alcoholic beverage industry when we changed our name.

I ask all bottlers and suppliers to cooperate in this collection to ensure that our industry can be effectively represented by our staff from a position of knowledge and to provide our suppliers and bottlers with a valuable membership benefit.

In Conclusion

This is the end of my second term as President and although I will remain on the Board as the Immediate Past President, I look forward to the leadership to be provided by my successor. I would like to thank vice-presidents Michelle & Brad for their support, Treasurer Arthur for his unstinting contribution and all other Board members for their participation.

A special thanks for their hard work and dedication must also be registered to our chief executive Tony Gentile, our administration officer Melanie Eardley and our Regulatory Affairs Consultant, Melanie McPherson.

I wish the industry all the best in 2006-7

Report from the President The Australian Beverages Council exists to primarily provide an interface between Government, regulators, lobby groups and our Industry. This, we have done well, thanks to the hard work of Board & committees’ members and not least, our staff.

When we look at the Public Affairs & Technical reports we quickly realise that the sheer volume of issues to be handled at Council level, is not only, not diminishing, but is in fact on an ever increasing curve.

My colleagues Brad van Dijk and Steve Little will report in more detail on the wok of their respective committees.

International Councils, Conferences & Exhibitions

When we look back on the past year we should take on board that our small staff has, in addition to the everyday administrative work required to run two associations and the on-going issues management work which is at the core of our reason for having an association; managed to host two international councils’ meetings and organise and run both a major conference & exhibition.

We hosted both the International Council of Bottled Water Associations and the International Council of Beverages Associations. Reports from delegates from Europe, the US, Japan and elsewhere all used superlatives to describe their Australian experience.

Similar reports were received with regards to our Conference, AusDrinks2006, which delegates, described as the “best ever”.

Coolum was a great venue, with record numbers in attendance and a great line of speakers making it a memorable event.

Board Membership

The nature of our ever changing organisation is reflected in our Board. We lost Arthur Mitropoulos at the beginning of the year due to the constitutional changes approved at the last Annual General Meeting and soon after, our Vice-president Geoff Walsh was promoted to bigger and better things by his company to Hong Kong.

In December we were pleased to welcome Michelle Allen from Coca-Cola South Pacific to the Board replacing Geoff Walsh and also past Queensland President Bruce Herbert to represent Coca-Cola Amatil Ltd.

Memorandum & Articles of Association

Other changes this year included changes to our governing rules. These provided for an infusion of democracy by providing that all bottler/franchise/distributor members have an equal right to vote at all Council general meetings with each member having the right to exercise a single vote. The rules were further tightened so that representation on the Board from the two main beverage systems’ Coca-Cola South Pacific / Coca-Cola Amatil and Cadbury Schweppes /

ANDREW DAWSON President

August 2006

Andrew Dawson

2 AUSTRALIAN BEVERAGES COUNCIL LTD ANNUAL REPORT 2006

At our meeting it was decided that the secretariat would move from Brussels (UNESDA) to Tokyo (JSDA) for the next two years. The next ICBA Council meting ill be held in Las Vegas in conjunction with InterBev (October 23-25).

Productivity Commission – Rural Water Inquiry The Council was briefed on 19 January on this Inquiry that had the potential of impacting on mineral and spring water availability and pricing. A submission was lodged in the name of the Australasian Bottled Water Institute covering spring/mineral water sourcing issues.

We are pleased to advise that the draft report from the Productivity Commission did not propose any changes to current arrangements for the sourcing of mineral & spring waters.

Report from the CEO A busy media year with our industry continuously under attack provided the primary focus for the secretariat’s operation.

Our commercial “current affairs” television programs took a keen interest in our products with claims that:

Soft drinks were sugar based and therefore bad for you

Soft drinks ‘acidity’ were negative to dental health

Energy drinks contained too much caffeine

Sports drinks were bad for dental health and should be restricted to performance athletes

Soft drinks were the sole/or primary cause of childhood obesity

Soft drinks should be banned from all schools / they should be labeled with warning signs

Bottled water was bad for dental health as it did not include added fluoride

Bottled water was expensive and “no better for you than tap water”.

Bottled water was an environmental “disaster” both in Australia and in the third world.

Fruit Juices are no better for you than soft drinks as they contain similar levels of sugar and are just as acidic.

Spring water companies are depleting our ground water reserves for commercial profit

Needless to say whenever given the opportunity, we have vigorously defended our products.

AusDrinks2006

When all comments were taken on board we can say confidently that AusDrinks2006, at the Hyatt Regency Resort, Coolum, Queensland from 30 April to 2 May, was an outstanding success.

The line-up of speakers, seminar topics and social events met or exceeded everyone’s expectations and provided a fantastic opportunity for learning, networking and sheer enjoyment.

My thanks go to all of the speakers for their fantastic contribution, to the sponsors & exhibitors for their support and to our Administration Officer Melanie Eardley for an outstanding and prodigious body of work.

International Council of Beverages Associations

It was a pleasure to host the ICBA meeting in conjunction with our conference. We welcomed delegates from Europe, Japan, Taiwan and North America, with a major decision being taken on the code of practice for the minimization of benzene in soft drinks and a frank and useful exchange of information on health & nutrition issues.

TONY GENTILE Chief Executive Officer

August 2006


Committee Lists Board of Directors President Andrew Dawson Cadbury Schweppes (Aust) Pty Ltd Vice Presidents Brad van Dijk PepsiCo Australia Michelle Allen Coca-Cola South Pacific & Korea Treasurer Arthur Shelley Bertshell Pty Ltd Other Board Members Mr Mark Cowsill Frucor Beverages Ltd Mr Bruce Herbert Coca-Cola Amatil (Aust) Pty Ltd Mr John McLean Bundaberg Brewed Drinks Mr Peter Sullivan Beaudesert Soft Drinks Mr Ian Turner Saxby’s Soft Drinks Pty Ltd Mr Tony Gentile Australian Beverages Council Ltd Technical Committee Chairman Mr Steve Little Coca Cola South Pacific & Korea Committee Members Mr David Bennett Coca Cola South Pacific & Korea Dr Simon Brooke-Taylor Brooke-Taylor & Co

Mr Robert Cumming PepsiCo Australia Ms Jacqui Dobbs Frucor Beverages Ltd Ms Julie Newlands Unilever Australasia Mr Ben Palmer P & N Beverages Australia Pty Ltd Mr Glen Rogers Cadbury Schweppes (Aust) Pty Ltd Mr Neil Smith Cadbury Schweppes (Aust) Pty Ltd Mr Peter Swain Golden Circle Ltd Mr Alan Talbot Bevco Pty Ltd Ms Melanie McPherson Australian Beverages Council Ltd Public Affairs Committee Chairman Brad van Dijk PepsiCo Australia Committee Members Ms Veronique Droulez PepsiCo Australia Mr Nick Goddard Unilever Australasia Ms Kristen Hannah Public Affairs & Communications Manager Ms Casey Lewis Cadbury Schweppes (Aust) Pty Ltd Mr Craig Swan The NutraSweet Company Mr Tony Gentile Australian Beverages Council Ltd

Statement of Financial Performance Year Ended 30th June 2006 2005 2006 Income 23,361 AusDrinks 17,559 12,343 Interest on Investments 15,690 304,684 Membership Fees 319,846 3,020 Miscellaneous 2,568 (3,400) Loss on Disposal of Assets (4,892) 75,000 Secretarial Fees 75,000 415,008 TOTAL INCOME 425,771 Expenditure 7,990 Accounting & Audit 9,000 735 Bank Charges 550 11,400 Board & Committees 11,227 14,442 Depreciation 14,263 1,322 Entertainment 2,832 5,988 Fringe Benefits Tax 3,985 8,689 Insurance 6,367 13,146 Internet 6,507 38,370 Issues Management—General 27,455 896 Legal Fees 433 12,403 Long Service & Annual Leave Provisions 2,864 8,466 Motor Vehicle 6,738 7,345 Office Expenditure 10,297 23,559 Printing, Postage, Stationary & Telephones 18,357 18,399 Press Cuts & Media Monitoring 23,985 24,051 Rent 24,308 182,082 Salaries 193,552 259 Staff Recruitment, Training & Seminars 341 2,345 Statistics Collection 1,530 11,971 Subscriptions 10,583 1,539 Technical School - 28,463 Technical Consulting 30,480 18,928 Traveling & Accommodation 8,096 - YearBook 2006 3,203 442,788 TOTAL EXPENDITURE 416,953 (27,780) OPERATING SURPLUS (DEFICIT) 8,818 172,802 Accumulated Surplus as at 1st July 2005 145,002 145,002 ACCUMULATED SURPLUS 153,840 145,002 Accumulated Surplus as at 30th June 2006 153,840

The accompanying notes form part of these financial accounts


Report from the Hon. Treasurer

I’m pleased to report that the Council has, in spite of a very busy year with multiple issues running concurrently, managed to operate within budgets and can report a small surplus for the year.

Both income & expenditure were within budgets with only minor fluctuations within sub-budgets.

The AusDrinks2006 conference & exhibition also performed well with a small surplus, albeit below expectations. The Council was also able to absorb the additional costs of hosting the International Council o Beverages Associations.

My thanks to our Administration officer Melanie Eardley, our Chief Executive Tony Gentile and our auditors Joseph Shamia & Co for their assistance during the year.

ARTHUR SHELLEY Hon. Treasurer

August 2006

Arthur Shelley

On each occasion the Council represented the view to the media that the industry produced a wide range of products to suit every dietary need and social occasion and that “bans” were unlikely to achieve a reduction in the increasing incidence of childhood obesity.

Generic Product Categorisation for Canteens Guidelines

Food & Nutrition Australia (FNA) undertook a review of beverage categories based on the NSW Guidelines. The product categories covered included:

Diet Soft drinks 100% non nutritive sweeteners with no juice. Sodium <100mg/serve

Soft drinks with or without non nutritive sweeteners, added sugar, energy levels <300kj/serve.Sodium <100mg/serve

Sweetened waters (including Sports Drinks) with or without non nutritive sweeteners, added sugar, energy levels <300kj/serve. Sodium <100mg/serve.

Fortified Sweetened waters, with or without non nutritive sweeteners, added sugar, energy levels <300kj/serve. Sodium <100mg/serve.

Juice drinks (<100%), no non nutritive sweeteners, energy levels < 300kj/serve (regardless of added sugars). Sodium <100mg/serve

Juice drinks (<100%), with non nutritive sweeteners, energy levels < 300kj/serve (regardless of added sugars). Sodium <100mg/serve.

Teas beverages ,with or without non nutritive sweeteners, added sugar, energy levels <300kj/serve.Sodium <100mg/serve

The report has been received by the Committee and is still under review to be published in the members’ only section of the Council’s website later in the 2006 calendar year.

National Obesity Forum

The Council attended the “National Obesity Forum” conducted at Parliament House Canberra under the auspices of Tasmanian Senator Guy Barnett. The Board chose however not to formally endorse the outcomes, pre-ferring to wait until the Council’s policy positions and strate-gies on the issue were finalised.

Public Affairs Report The Public Affairs Committee, was formed at the beginning of 2005 and had its scope of operations approved at the 29th August Board meeting.

The Committee was charged with:

Health & Nutrition Consumer & Competition Issues: External Communications

Health & Nutrition

The Obesity Debate

The emerging debate on obesity and particularly childhood obesity was probably the primary focus of the Council’s activities in 2005/6.

Continuing negative media focusing on and blaming the rising levels of childhood obesity on beverage consumption required the Council to be ever ready to respond in the media. This occurred with regular frequency on television & radio current affairs and news programs as well as the print media.

The Committee has been focused on developing a strategy to respond to this challenge and has been in ongoing discussion with the Commonwealth Department of Health.

School Canteens

National School Canteens Framework

Vice-President Geoff Walsh (CCSP) represented the Council and briefed the Commonwealth’s inquiry into the development of a “national school canteens framework”.

The final recommendation to the Health Ministers’ Council has no as yet been finalized.

Primary Schools Letter to Principals

As a consequence of misrepresentation in the media about the marketing of carbonated soft dinks to primary schools, the Council wrote a letter to all primary schools in Australia. The letter was also published in the WA School Newsletter.

State Governments’ School Canteens Announcements During the year, the NSW, Queensland and Victorian governments each announced various policies with regards to food and beverages in government school canteens.

These policies have not resulted in legislation although at various times through the media, the respective Health and/or Education Ministers announced various “bans” with soft drinks, as has become customary being the primary target.


Year Ended 30th June 2006 2005 2006 Note 2—Cash Westpac Banking Corporation - 10,000 Imprest Account & Petty Cash 10,000 78,830 Westpac Banking Corporation - Business Cheque Account 14,594 11,747 MLC-Cash Management Trust 14,659 - Westpac Banking Corporation - AusDrinks Account 52 - Westpac Banking Corporation - Cash Management Account (Aus) 47,450 96,520 Westpac Banking Corporation - Cash Management Account 116,893 5,180 Security Deposit 5,180 202,277 202,828 Note 3—Receivables 150 Sundry Debtors 4,200 13,464 Sundry Debtors—AusDrinks - 13,614 4,200 Note 4—Other 10,265 GST on Acquisitions 20,366 Note 5—Property, Plant & Equipment 32,264 Motor Vehicles—at Cost 41,074 8,874 Less Prov’n for Depreciation 4,600 23,390 36,474 38,917 Office Equipment 38,917 18,817 Less Prov’n for Depreciation 26,346 20,100 12,571 43,490 49,045 Note 6—Creditors & Borrowings 48,660 Sundry Creditors & Accruals 39,672 Note 7—Provisions 12,759 Provision for Annual Leave 13,712 60,909 Provision for Long Service Leave 62,820 73,668 76,532 Note 8—Other 2,296 GST on Suppliers 9,619 - Membership in Advance 2,775 2,296 12,394 Note 9—Auditors Remuneration The Auditors have received no other benefit other than audit and accounting fees as shown in the accounts


(b) Depreciation of Property, Plant & Equipment

Property, plant & equipment are depreciated over their estimated useful lives. Profit or loss on disposal of property, plant and equipment are taken into account in determining the surplus for the year.

(c) Employee Entitlement

The amounts expected to be paid to employees for their pro-rata entitlements to long service leave and annual leave are accrued annually at current wage rates. Provision is made for the company’s liability for employee entitlements arising from services rendered by employees to balance date.

(d) Income Tax The company is eligible for exemption form income

tax under Division 50 of the Income Tax Assessment Act 1997.

NOTES Note 1 - Statement of Accounting Policies (a) The Financial report is a special purpose financial

report prepared in order to satisfy the financial report preparation requirements of the Corporations Act 2001. The Directors have determined that the Company is not a reporting entity. The report has been prepared in accordance with the requirements of the Corporations Act 2001, and the following applicable Accounting Standards and Urgent Issues Group Consensus Views:

ASSB 1001: Accounting Policies ASSB 1004: Revenue ASSB 1018: Statement of Financial Performance ASSB 1021: Depreciation ASSB 1028: Employee Benefits The company is incorporated as a company limited by guarantee. Accordingly every member of the company undertakes to contribute to the assets of the company in the event of it being wound up while they are a member and for payments of the debts and liabilities of the company contracted before they ceased to be a member. Such amount each member may be required to pay shall not exceed $50. As of 30th June 2006 there were 73 members and accordingly the amount of capital which is capable of being called up in the event of, and for the purposes of, the winding up of the company is $3,650 at that date. No other accounting standards or other mandatory professional reporting requirements have been intentionally applied. The report is also prepared on an accruals basis from the records on the company. They are based on historic costs and do not take into account changing money values or, except where specifically stated, current valuations on non-current assets. The following specific policies which are consistent with the previous period, unless otherwise stated, have applied in the preparation of these statements.



Government Affairs The Public Affairs Committee considered invitations received by the Council & members to attend fund raising activities & conferences by political parties. The committee’s view that the level of representational activity by the industry needs to be stepped up and that this is best and most economically done through the Council was endorsed by the Board. Additional funds were approved for this activity in 2006-7. I would like to thank all committee members and our chief executive, Tony Gentile, for their work and support.

BRAD VAN DIJK Chairman, Public Affairs Committee

August 2006

Brad van Dijk

Science & Regulatory Affairs Report The Technical Committee has had another extremely active year as regulatory and safety issues have been at the forefront of much of the Association’s activities.

Benzene in Soft Drinks

Reports came to light that the US FDA had identified an issue, some 15 years ago, where benzene was being formed in some soft drinks. Traces of benzene were developing in some soft drink sub-categories. This has been shown to be dependent on the ingredients and preservatives being used.

Food Standards Australia New Zealand (FSANZ) conducted its own tests and reported that the levels formed did not present a health risk.

Internationally, the beverage industry pro-actively addressed the issue by developing a guidance document to assist bottlers in minimising the formation of benzene traces. The document also contains the current procedure used to determine the level of benzene present. This document has been endorsed by regulators and is available on the Council’s website to assist all bottlers.

It should be noted that the US FDA has certain concerns regarding the methodology used to measure the level of benzene. The method being used is a purge and trap method, however the FDA is concerned that this methodology actually forms additional benzene during the procedure, resulting in a higher level than is actually present in the product.

The Council has agreed to review the take-up of the document and to report back to FSANZ in one-year’s time.

FSANZ – A470 Formulated Beverages

The Council’s application for a new Standard for water based, vitaminised beverages has continued its tortuous path through the regulatory system. The FSANZ Board this year considered the Final Assessment Report (FAR) for A470 and approved a draft that was well short of the Indus-try’s original application. In fact several amendments were released after compromise discussions, and were considered by the March 2006 Ministerial Council.

Unsurprisingly four unnamed states/jurisdictions lodged various objections to the Standard as recommended for adoption by FSANZ. FSANZ are obliged to respond to these objections and have therefore decided to seek an extension of time for preparing a reply. This includes the commissioning of consumer research. The Council has been consulted in each of these steps. It is anticipated that a response will be provided to the Ministerial Council, Septem-ber 2006.


A424 - Calcium in Juices

This application from Council member, Nutrinova, was strongly supported by the Council. This was finally gazetted, with no further objections raised, at the March Ministerial Council.

Review of Permissions – Benzoate, Sulphite and Cy-clamates

FSANZ have begun a review of benzoate & sulphite permissions in food & beverages. This has arisen from a market survey conducted by FSANZ that showed a group of individuals exceeding the ADI (adequate daily intake). The Council has collected data on actual usages of these preservatives in beverages and submitted details and members’ comments to the review.

The review of benzoate permissions is expected to result in little change to the permitted limits. However, the maximum permitted limits for sulphite may be dropped dramatically. The Council is working closely with FSANZ on these.

Cyclamate usage levels are also under review due to consumption levels exceeding the ADI. FSANZ is considering a reduction in the maximum permitted limits. It is hoped that the final limit will be within working levels for bottlers. FSANZ and ABCL will continue to negotiate this limit.

Country of Origin Labelling

The Country of Origin Labelling Standard was gazetted this year. The Ministerial Council also sought a review for the possible extension of COL to juices.

The Ministers did vote to accept mandatory country of origin labelling for all products. The major change here being that all products will be required to state “made in Australia” or “product of Australia” or similar. The provision that had previously allowed bottlers to include Australia in the street address and thereby meet their legal obligations will no longer exist as of the 20th December 2006.

It should be noted however, that the New Zealand government has exercised their right to opt out of any food standard, as they see fit. They have done so with regard to country of origin labelling, hence New Zealand manufactured products will not have to meet the Australian regulation for a country of origin statement. This is the first instance in which the New Zealand government has chosen to take up this option.


Note (a) Cash Flow Information Reconciliation of Cash Flow from Operations with Operating Surplus for the year Operating Surplus (deficit) 8,818 Non cash flows in operating profit Depreciation 14,263 Changes in assets & liabilities Decrease in Receivables (9,414) Increase in Prepayments 10,101 Increase in Property , Plant & Equipment 5,555 Decrease in Creditors (8,988) Increase in Provisions 2,864 Increase in Other Creditors 10,098 Other (26,746) Cash flows from Operations 6,551


Statement of Cash Flow Year Ended 30th June 2006 Cash Flow from Operating Activities Note Receipts from Investments 15,690 Receipts from Members 319,846 Other Receipts 90,235 Payments to Suppliers (419,220) Net cash provided by (used in) operating activities (a) 6,551 Cash Flows from Investing Activities Payments from Investments - Net cash provided by (used in) investing activities - Cash Flows from Financing Activities Cash Flows from Financing Activities - Net cash provided by (used in) financing activities - Net increase (decrease) in cash held 6,551 Cash as 1st July 2005 202,277 Cash at 30th June 2006 208,828



Further, the Ministerial Council directed FSANZ to consider an extension to country of origin labelling for juice products. This could have resulted in products with one juice sourced from one or more countries, added to a second juice from one or more countries, being required to list all countries on the label. Given seasonal variations in availability, the Council expressed considerable concern at the management of labelling for these products.

This proposal was finally rejected at the May Ministerial Council Meeting.

Food Standards Code Regulations for Pesticides in Water

A draft application to amend the Food Standards Code regulations for pesticides in packaged waters was lodged by the Council in conjunction with ABWI.

Remarkably FSANZ verbally advised that it was their legal opinion that under the Standard for MRL’s bottled water is NOT a “food” and hence does not require limits. FSANZ then sent written advice that consideration could only be given; and not favourably; to including contaminant levels in the Standard for contaminants. FSANZ have advised that they now have a leaning toward not regulating maximum contaminant limits – as exampled in the benzene incident (see above).

The Council’s Board considered the issue and were not satisfied with accepting the FSANZ position. The Board has resolved that a new submission be drafted, seeking to have maximum contaminant limits for water adopted into the contaminant standard. Further, it was noted that if, as FSANZ have argued, these limits are not MRL’s that the editorial note included in the MRL Standard referring to limits in the Australian Drinking Water Guidelines, is not consistent. Further, it was noted that the editorial note refers readers to a Guideline that has been superceded. The ABCL is seeking to have this reference deleted.

The matter continues to be negotiated with FSANZ.

P291 – Review of Novel Food Standard

The Council lodged comments on the Draft Assessment Report (DAR) for this proposal in January. A final report is expected to be considered by the FSANZ Board Meeting in December 2006.

FSANZ Review

The Council supported the review of the FSANZ procedures. This review has now been completed and he changes are being implemented. Whilst the final outcome is well short of Industry’s wishes the proposed changes will provide a more streamlined process.

Applications will now need to be substantively complete before being accepted by FSANZ and depending on the complexity of the application FSANZ will be able to choose restrict public comments to a single round.

ACCC Labelling Review

The ACCC conducted a review of descriptors used on labels and released a draft guideline for the use of a number of terms currently used on labels. This included natural and fresh, etc. Although the initial part of the review promised to achieve real progress, the final report proved to be disappointing and lacking in substance.

At this time progress on the draft guide appears to have lapsed and industry will need to wait and see any further outcomes.

P293 – Nutrition, Health and Related Claims

The Council lodged industry’s comments on the DAR for this proposal in March this year, along with a large number of submitters.

Due to the responses, FSANZ have determined that further work is needed and a further round of targeted, public comment will be undertaken, before a recommendation is finalised for the consideration of the FSANZ Board.

Dimethyl Dicarbonate (DMD)

The supplier of DMDC is seeking to have this ingredient re-categorised by FSANZ as a Processing Aids instead of its current permission as a preservative. This is due to the action of DMDC occurring at the time of bottling without any ongoing technological function once a container has been opened. The application relates to soft drink and juice drink products.

The Council has resolved to support this Application and will comment to FSANZ once the Initial Assessment Report is released.

Fluoride in Bottled Water

The Council has lodged an Application jointly with ABWI to permit the voluntary addition of fluoride to bottled waters.

FSANZ sought additional information, including details on safety and dental studies. This was provided to FSANZ; however they have further advised that they are expecting to need yet more data. FSANZ view this as a controversial application, in spite of the application seeking permission for a limited range of products, to be clearly labelled. When viewed in light of the mandatory fortification of a number of municipal sources throughout Australia, there is some scepticism regarding the controversy.

The Application is currently being dealt with by FSANZ and the Council will be advised when they either determine that more information is required, or an Initial Assessment Report is to be released for public comment.

In Conclusion

I would like to thank all Technical Committee members for their contribution and a special thanks to Melanie McPherson our Science & Regulatory Affairs Consultant for her hard work in the past year.

STEVE LITTLE Chairman, Technical Committee

August 2006


Steve Little


Statement of Financial Position Year Ended 30th June 2006 2005 Note 2006 Current Assets 202,277 Cash 2 208,828 13,614 Receivables 3 4,200 10,265 Other 4 20,366 226,156 TOTAL CURRENT ASSETS 233,394 Non Current Assets 43,490 Property, Plant & Equipment 5 49,045 269,646 TOTAL ASSETS 282,439 Current Liabilities 48,660 Creditors and Borrowings 6 39,672 73,668 Provisions 7 76,532 2,296 Other 8 12,394 124,624 TOTAL CURRENT LIABILITIES 128,598 124,624 TOTAL LIABILITIES 128,598 145,022 NET ASSEST 153,841 Members Funds 145,022 Accumulated Surplus 153,841


Joseph Sha-mia & Co.

Chartered Accountants Registered Company Auditor Clarence Corporate Centre Level 5, 235 Clarence Street Sydney NSW 2000 This 31st day of July 2006

Independent Audit Report Scope

We have audited the attached financial report of Australian Beverages Council Ltd for the year ended 30th June 2006. The Company’s Directors are responsible for the financial report and have determined that the accounting policies used and described in Note 1 to the financial statements which form part of the financial report are appropriate to meet the needs of the members.

We have conducted an independent audit of the financial report in order to express an opinion on it to the members of the Company. No opinion is expressed as to whether the accounting policies used, and described in Note 1 , are appropriate to the needs of the members.

The financial report has been prepared for distribution to members for the purpose of fulfilling the Director’s financial reporting requirements under the Corporations Act 2001. We disclaim any assumption of responsibility for any reli-ance on this report or on the financial report to which it relates to any person other than the members, or for any purpose other than that for which it was prepared.

Our audit has been conducted in accordance with Australian Auditing Standards. Our procedures included examination, on a test basis, of evidence supporting the amounts and other disclosures in the financial report and the evaluation of significant accounting estimates. These procedures have been undertaken to form an opinion whether, in all material respects, the financial report is presented fairly in accordance with applicable Accounting Standards and statutory requirements so as to present a view of the Company which is consistent with our understanding of the Company’s financial position and performance as represented by the results of its operations and its cash flows.

The audit opinion expressed in this report has been formed on the above basis.

Audit Opinion

In our opinion, the financial report of Australian Beverages Council Ltd is in accordance with:

(a) The Corporations Act 2001, including:

(i) giving a true and fair view of the Company’s financial position as at 30th June 2006 and of its performance for the year ended on that date in accordance with the accounting policies de-scribed in Note 1; and

(ii) complying with Accounting Standards in

Australia to the extent described in Note 1 and the Corporations Regulations 2001; and

(b) Other mandatory professional reporting requirements


AUSTRALIAN BEVERAGES COUNCIL LTD ABN 12 115 440 166

ANNUAL FINANCIAL REPORT

FOR THE YEAR ENDED 30TH JUNE 2006

Directors Report In accordance with a resolution of the Board of Directors, we submit to you our report together with Statement of Financial Position, Statement of Financial Position, Statement of Financial Performance, Notes to the Financial Report and Directors’ Declaration for the Company for the year ended 30th June 2006 and state that: The Directors of the company in office at the date of this report are: Andrew Dawson Michelle Allen Brad van Dijk Arthur Shelley Anthony Gentile Peter Sullivan Angelo Kotses John McLean Bruce Herbert Mark Cowsill Ian Turner The principal activities of the company were to promote the interests of the Australian beverages industry and there have been no significant changes during the financial year. The surplus for the year ended 30th June 2006 was $8,818.00. As the company is not carried on for the purpose of profit or gain to its individual members, the company is exempt from paying income tax under Division 50 of the Income Tax As-sessment Act 1997. No Directors have, since the end of the previous financial year received or become entitled to receive a benefit by reason of a contract made by the company or related corporation with any director or firm of which he is a member or with a company in which he has a substantial financial interest. This statement excludes a benefit included in the aggregate amount of emoluments received, or due and receivable by Directors shown in the company’s financial accounts for the financial year or the fixed salary of a full-time employee of the company, controlled entity, or a related body corporate. The company has not, during or since the financial year, in respect of any person who is or has been officer or auditor of the company or of a related body corporate: Indemnified or made any relevant agreement for indemnifying against a liability incurred as an officer or auditor,

including costs and expenses in successfully defending legal proceedings; or Paid or agreed to pay a premium in respect of a contract insuring against a liability incurred as an officer or auditor

for the cost or expenses to defend legal proceedings. Signed on behalf of the Board of Directors at Sydney NSW this 31st day of July 2006 …………………………………….Director (Anthony Gentile) …………………………………….Director (Arthur Shelley)


Directors Declaration The Directors of the company declare that: (1) The financial report and notes to the financial report are in accordance with the Corporations Act 2001:

(a) comply with Accounting Standards as described in Note 1 to the financial report and the Corporations Regulations 2001; and

(a) give true and fair view of the Company’s financial position as at 30th June 2006 and of its performance for the

year ended on that date in accordance with the accounting policies described in Note 1 to the financial report.

(2) In the Directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors at Sydney NSW this 31st day of July 2006 …………………………………….Director (Anthony Gentile) …………………………………….Director (Arthur Shelley)


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