Procurement · 8 January 2018

“Latte levy” could unfairly hit independent coffee shops

Latte levy
At least 2.5bn disposable coffee cup are thrown away every year

The so-called “latte levy” could punish independent coffee shops and undermine efforts to address high levels of waste, according to an organisation representing small high street businesses.

Following recommendations by the Environmental Audit Committee of MPs, an additional 25p charge onto takeaway coffee cups to tackle the billions thrown away each year is being considered by the Department for Environment, Food and Rural Affairs (DEFRA).

The committee claimed the charge would encourage consumers to carry their own reusable cups, with money raised via the tax used to fund recycling plants that can process plastic-lined takeaway cups.

Announcing the idea, Mary Creagh, Labour Party MP and committee chairperson, said the charge on plastic bags had led to an 83 per cent reduction in use, and the latte levy could have a similar impact.

“We think a latte levy will be the kind of charge that will make people think ‘I need to bring my cup to work today’, in the same way that they are moving more and more to reusable plastic bottles,” Creagh said.

In response to the proposal, the Association for Licensed Multiple Retailers (ALMR), an organisation representing hospitality businesses, has warned an additional tax on takeaway cups would disproportionately impact on smaller businesses, which would in turn be forced to place the cost onto customers.

Kate Nicholls, chief executive of the ALMR, welcomed the efforts to reduce waste and reduce environmental damage, but warned the latte levy would “simply increase costs for businesses without having any discernible effect in tackling the problem”.

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“Small and medium-sized businesses will be particularly vulnerable to cost increases and many of them will find it difficult to absorb this cost or even pass it onto customers as the cost of the cup is already factored into the price,” she added.

Nicholls noted that unlike plastic shopping bags, a coffee is often an impulse purchase. With coffee cups amounting to just 0.07 per cent of the UK’s packaging waste, she suggested action should be taken by manufacturers at the other end of the supply chain.

She went on to explain that some ALMR members had already begun loyalty or discount schemes to encourage reusable cups among their customers.

“Steps such as these help address waste without increasing costs for businesses and actually save customers money,” she added.

“Schemes to tackle waste are welcome, and businesses are ready to play their part, but an additional tax on businesses, one which will increase costs and potentially threaten jobs, is not the answer.”

This family-run coffee company took on Coca-Cola in a trademark dispute

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ABOUT THE EXPERT

Simon Caldwell is deputy editor at Business Advice. He has a BA in politics and communications from the University of Liverpool, and has previously worked as a content editor in local government and the ecommerce industry.

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