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The Dunedin City Council got tough with one of its largest buyers of official rubbish bags, refusing to supply supermarket giant Progressive Enterprises for a month until it cleared a $138,358.59 debt, some of which dated back to August last year.
The ban began to hit customers about two weeks ago as Progressive's four Dunedin supermarkets - Countdown Central, Countdown Mosgiel, Countdown Mornington and Woolworths on Andersons Bay Rd - ran out of stock.
Progressive paid its bill last Friday and supply had been resumed, council water and waste services business support manager Narelle Barbour said yesterday.
The council has two sizes of rubbish bags, manufactured in Christchurch.
Between 2.5 and three million are sold annually through retailers, with other bags sold through council service centres.
Mrs Barbour said the cost of the bags, which also incorporates the cost of refuse collection and disposal, was the same for all retailers "whether they buy one or 1000".
Retailers were free to charge whatever mark-up they liked.
Progressive started paying its monthly accounts minus a 2.5% discount, an amount staff said was given by all its suppliers.
The council refused to give Progressive a discount, and Mrs Barbour said she had been "tearing her hair out ever since" to get bills paid in full, although some money had been received.
"Progressive were told we don't discount for anyone. We can't do that. We have to cover costs. If someone gets a discount, someone else will have to pay more."
Foodstuffs, which supplies New World and Pak'N Save supermarkets, did not get a discount either, and had no issue with the council's stance, she said.
Despite numerous telephone calls, emails and letters over several months, Progressive did not clear its account.
So on March 18, letters were sent by registered post to the company's general manager, Peter Smith, and two senior staff saying supplies would cease until payment was received.
That payment was made last Friday and supply had resumed, she said.
Progressive had been told it must now pay weekly.
Last year, the council wrote off almost $400,000 after its rubbish bag manufacturer went into liquidation.
Water and waste services manager John Mackie said yesterday that loss was always in his mind as Progressive's account crept higher.
"When their bill reached six figures, alarm bells began to ring. We gave them plenty of warnings to pay up before we ceased supplying them."
Kate Carter, from Progressive's press office, said last night she would look into the matter and respond as soon as possible.