Throwing out new bags is wasteful, says Richard Osmaston, who was surprised to find dozens put out for the rubbish collection on a Nelson city street.
He was then horrified to discover that the bags from a city shop had been deliberately slashed by the retailer.
The bags came from Strandbags which each month disposes of returned or faulty bags in this way.
Mr Osmaston, who stood for the Nelson city mayoralty in last month's election, said he saw a stack of bags by a wheelie bin on the corner of Trafalgar and Hardy streets on Tuesday morning. When he returned that way half an hour later they were still there and a woman was looking at them.
"We discussed it and I thought it does not make sense, they looked new."
As it was rubbish, they decided it was "fair game" and took one each. Mr Osmaston said when he later opened the suitcase he had taken it was full of more bags.
"Wow! There were wallets, purses, clutch bags, kids' backpacks and iPad cases. There was some quite posh bags, some were leather, some not.
"What was so horrific is they had been condemned and because of that they had been slashed and they were all brand new. It seems a horrific waste of resources just to keep the price up. It's heinous."
He said the retailer should not be pilloried. "It's not their fault, that's what the system makes them do."
Store manager Paula Dillon said they put aside bags that were faulty or had been returned by customers and once a month a manager from Christchurch came, checked them, and slashed them. They were usually put out the back for its rubbish collection but as there were fewer this time they were put out with the street refuse collection.
"It may be wasteful but it's company policy," she said.
The bags were slashed so they could not be returned again. Because the company was based in Australia it was too costly to return them there, she said.
Mr Osmaston said the wasteful practice of destroying good products happened elsewhere. "At Kimberley in South Africa they destroy diamonds to keep the price up. We do it with food even.
"These bags would make lovely Christmas presents, it must be agony to slash them.
"What did it take to ship them from China to Nelson then destroy them.
"I can guarantee if it was someone who worked their own business they would not do it because they would not be able to destroy their own product. Imagine a craftsman doing that."
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