Saving on pennies costs vending industry £millions

28 October 2010

Savings at the Royal Mint of £10m announced in the Comprehensive Spending Review will cost vending companies at least £42m.

The Royal Mint’s proposals to save some £10m on the metal used in its 5p and 10p coinage is set to cost the vending machine industry £millions. Rather than continue with the mix of copper and nickel the Royal Mint wants to change to the cheaper nickel-coated steel, and this was given approval in the CSR. The new coinage could be legal tender from January 2011.
The Automatic Vending Manufacturers Association has been trying to stop this change because the new coins are wider than their current equivalents. This means that every vending machine, parking meter and coin operated phone box will need to have its mechanism changed or adjusted. There are estimated to be 500,000 vending machines in the UK, and about 200,000 pay phones. According to Jonathan Hilden, chairman of the AVMA, an engineer’s visit can cost about £100 per machine to either make a software change or remove and re-engineer the coin mechanism. The costs to vending machiner operators alone is estimated at £43m.
“The new coins will be legal tender from January 2011 but we have been assured that this can be delayed to 1st April to allow for the changover to take place,” he said.
Despite discussion over the past two years, the announcement in the CSR last week came as a surprise with no advance warning.
He explained that while some machines can be changed during their standard maintenance regime, many machines are no so reliable that they need not receive a maintenance visit for up to three years. This change means that additional maintenancne visits will have to be scheduled.
He said it is the resposibility of the machine operators to undertake and bear the cost of the changeover. He observed the hospitals typically have vending machines, parking meters and coin operated phones. He speculated that the cost of the changover could mean that some machines will never be changed and be taken out of use.