WATER EFFICIENCY LABELLING AND STANDARDS (WELS) SCHEME – Consultation paper
Nu Bathroom Centre submission
Ausbuy Submission.
As a small family owned business located in South East Queensland and a member of the Ausbuy
Group, I wish to add to my group’s submission.
As a retailer of Bathroom Ware I wish to state my support for the WELS Scheme since it’s inception
and strong policing and enforcement of it’s standards around Australia and on the internet.
However it seems to me that the objective for the schemes new proposal (to be industry funded) has
been lost with unrealistic short licence periods that would lead to increased costs less selection of
product and difficult stock control and retailers ending up with stock that could run out of licence
before they are able to retail them, not to mention making it almost impossible for the department
concerned to police and enforce.
Proposal:The objective of the WELS standards is to save water.
The current water efficiency standards and labelling system are working fine, therefore I propose why
not leave the licence period the same (5 Years) and increase the licence fee accordingly and allow
retailers (but not manufacturers or distributors) to still retail their current stock levels after expiry of
the licence until sold, as the product still complies to the WELS rating.
The result of the above proposal would be increased funding for the WELS department, less red tape
and bureaucracy, freeing up staff within the WELS department to police and enforce the regulations
more effectively, simpler and easier stock control and adherence of the regulations for retailers and
manufacturers.
I would also request to assist in cross referencing, that the licence number displayed on the WELS
stickers are put on to the WELS registration certificate displayed on your website, not just WELLS
registration number something you are not able to do at the moment
Kind Regards
Nu Bathroom Centre
I, Chris Kelley, Authorise the inclusion of this submission by any one for the purpose of contributing
to their own submission
Question 31 (page 30):
Please provide any other comments or suggestions that you would like to make about
improving the WELS scheme.
General Submission:
As the group coordinator for Australian Buyers Group– a buying group representing approximately 100
independent retail & trade plumbing and bathroom merchants across Australia – the following
submission specifically looks at the implications that the proposed changes will have on these
predominantly “owner operator” businesses – there are no specific questions in the consultation
paper regarding these retail and trade outlets.
In general terms, the group and its members are supportive of the WELS scheme as it provides a
standardised method for water efficiency labelling which results in tangible and proven water saving
outcomes. It also provides another check regarding the sale of substandard and non-water saving
product within the industry.
With the exception of a few technical breaches due to Administrative oversight, members have had
very few issues with the WELS Scheme over the last 5 years.
The group and its members understand that there is a clear directive from the department to have the
scheme industry funded. Whilst we realise that this will no doubt increase the costs of products, as
long as it is implemented fairly and impacts all suppliers in a similar fashion, the cost increase
shouldn’t overly impact industry merchants (including our members). However, we do understand
that, depending on the model, some suppliers may be put at a severe disadvantage due to increased
registration costs.
The big issue facing retail and trade merchants (and manufacturers for that matter) would be the
increased administrative burden and associated costs of the proposed changes (all options put
forward).This primarily relates to the reduction of registration periods from 5 years to 1 year and the
fact that even if a product is registered when purchased by a merchant, if it subsequently expires, they
will be unable to sell it unless it is reregistered. This has very broad ranging and serious implication as
outlined below:
Implications of proposed 12 monthly registrations:
 Stores will have to track WELS licence numbers and expiry dates of all products that they sell
and monitor daily/weekly/monthly
 Stores will require a system to notify them when a product in stock is due to have its licence
expire as expiry can tack place on any day of the year.
 Stores will have to deal with otherwise perfectly saleable stock that they were unable to sell
prior to expiry of WELS licence
 Suppliers will be swamped with returned stock as merchants insist that they take back what is
now unlicensed product (all of which costs time and money)
Whilst there may be solutions to deal with the above issues, they would all result in substantial costs
to these retail and trade outlets (both in dollar and work hours).
Many of our members are smaller family run businesses that simply don’t have the systems in place to
manage and track these details and the cost to implement one would be prohibitive.
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In the current economic climate that has seen sales in certain regions drop by up to 40%, these
requirements would directly contribute to the closure of a number of businesses. This is not an
exaggeration.
The fact that civil penalties will also be introduced requiring a substantially reduced burden of proof, it
will be a double edged sword for many stores (increased regulatory requirement and increased
enforcement).
The unfortunate aspect of this is that it is penalising merchants that are otherwise positive supporters
of the scheme. There is a real risk that by implementing an overly onerous system, stakeholders will
simply campaign for the system to be scrapped.
Possible Solutions:
Solution 1)
However there is a simple solution that will assist all stake holders. If the product is simply required to
be licenced when it sold by a manufacturer, all those involved would simply have to ensure the
product is licenced at the time it leaves a manufacturer.
There are a multitude of benefits relating to this proposal.
 Huge reduction in the administrative burden of retail and trade outlets
 Huge reduction in administration for manufacturers
 Removes liability from suppliers for expired product.
 Removes the issue of manufacturers having to deal with vast numbers of small amounts of
expired products (as long as they can move it out the door prior)
Whilst you may think that this may affect licence revenue as suppliers push product out prior to
reregistration, the reality is that suppliers will inevitably find a way to remove slow moving stock prior
to reregistration. I do acknowledge that enforcement and tracking of stock sales would be tricky (but
manageable) and substantial penalties would be needed to ensure manufacturers weren’t tempted to
ship out of licence product after licence expiration
Solution 2)
Keep 5 year registrations as they are. If WELS is looking to triple its contributions from industry, why
not just keep the system as it is and triple the current licencing fees.
Solution 3)
One off registrations
Although it would require some financial modelling to be done, licencing could be done in perpetuity.
If a product is only licenced once, there would be minimal administrative burden and suppliers. This is
clearly how the system should be run and it should be the departments aim to get as close to this as
possible – does a product suddenly loose its ability to save water if its licence expires?
Solution 4) - the bare minimum
Provide an annual compliance date for stores. This would allow stores to audit their inventory each
year and enforcement action could only commence on expired product after the proceeding
compliance date. For example:
A store is selling a product that expires in March; however the annual compliance date for retail
outlets is 1st July. This would allow the store to continue to sell the product until the 1st of Jul. Leading
up to this “compliance date” ( 1st of Jul), stores can be reminded to audit their products and make
arrangements for any expired or close to expired product. This can be added to one of the current
proposals quite easily. Buying groups and chains can assist in promoting this cut off dates and in doing
so, will raise the profile of the WELS scheme within outlets. – This should be the minimum concession
that retail and trade outlets should receive if the system does move to a 12 monthly registration
cycle – otherwise compliance will simply be unworkable at a store level.
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If the administrative requirement is made overly onerous, the industry will simply find a way the
bypass it. The obvious example is that an overseas based company will simply facilitate the purchase of
expired or non-approved product by consumers and will be beyond the jurisdictional reach of WELS
enforcement action (which helps no one). There have been at least half a dozen other concepts that
have been discussed with me that would not have been considered in you modelling (and thus impact
your revenue returns). The creativity of stakeholders should not be underestimated
Finally, I wish to emphasise that large chains may have the infrastructure to deal with the proposed
requirements; independents will be at a distinct disadvantage with most having to implement manual
audit regimes. Under the proposed system a store would have to audit their entire stock and displays
at least once a month to even come close to complying –and even then they can be caught out if they
don’t pull stock straight away. If the proposal goes through, I will be instructing our members to place
a clause on all purchase orders that require all suppliers to agree to credit any stock that becomes
expired.
In addition we will actively lobby (as an industry) the current government, the opposition and the
ACCC, informing them that the administrative requirements of this new legislation unfairly targets
smaller merchants and will substantial lessen competition. In doing this, we are well aware of the
upcoming federal election and the impact that a large number of regionally diverse, independent
business owners can have on the campaign.
I hope you consider the effects as outlined above, that this legislation will have on the industries retails
and trade merchants. Should you require more detailed information in order to make an informed
decision, please don’t hesitate in contacting me directly,
Regards,
Chris Kelley
On behalf of Australian Buyers group Members (100)
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