Stuck in a waste contract?

Waste contracts! Yuk. I write about them today because yesterday I met with a small business in Maitland and we got to talking about business. They asked me what I do for a living and I told them about BinCompare and BinShare.

Their eyes lit up and they recalled their own horror story working with an Australian owned large waste company. They called the company before the end of the contract to say they wanted to finish the contract at the end of the term. The response from the company was that because they were within the last three months of their existing contract, the automatic rollover clause had been triggered and they were now stuck in yet another three year contract.

Their price had gone up remarkably over the previous period, as well as the introduction of a mysterious "Environmental Levy" that made up more than 10% of their price.

The obvious part of this is they signed the contract and the contract had stipulated this clause. They should have known and they should have marked that date of the rollover in their calendar to be prepared - but like nearly every Australian small business they didn't.

Last November the ACCC banished this practice of the waste companies, no longer allowing them to enter contracts with SME's that bind them into automatic rollover clauses. They can still do it to large companies, the ACCC deeming they should be big enough and organised enough to avoid the tactic. Unfortunately for the business I visited yesterday, the ACCC made that ruling one month after their rollover clause was triggered, so they are stuck paying about three times the rate they should be paying for another three years.

My problem with it is this. This small business has two small industrial bins for general waste and cardboard. The bins are not new or in good nick at all. There is no other equipment needed to serve them. The capital cost of setting them up as a customer is tiny. There is no need for the waste company to protect themselves from committing a high amount of capital only for the customer to leave - the only reason for the contract is to lock them in and crank up the prices.

The time for good service in the industry is now. The public are all watching the waste companies thanks to War on Waste and Four Corners. BinCompare is here to help small companies achieve good deals that are fair. Let us help you get the right deal and we will deal with the waste companies for you.

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