Credit and Finance
Should SMEs join the 5p plastic bag charge?
Posted on by Cindy Yip
Estimated read time: 5 mins
The 5p plastic bag charge was introduced in England on Monday 5th October, the last in the UK to apply the scheme having already been introduced to Scotland, Wales and Northern Ireland. The English charge only applies to companies with more than 250 full time employees and those with less staff than this are exempt from the rule but can voluntarily opt in. Plastic bags at airport shops, on board trains and planes will not be included and neither will paper bags. Exemptions also apply to bags used for uncooked fish and meat, unwrapped seeds and flowers and knives.
In 2014, England supermarkets handed out 7.64bn carrier bags, that’s an average of 140 per person per year. Campaigners say bags take 1,000 years to degrade, are an eyesore to the streets and countryside, especially on beaches where they make up 2 per cent of the litter found during beach cleans (1). Bags also damages wildlife, seas and coastline; ecologically, when sea mammals, fish or birds consume plastic particle, it blocks their gut and is likely to harm or even kill them.
Through the 5p charge, the government hopes to see an 80% reduction in plastic bags used in supermarkets and 50% on the high street. The charges will create a £60m saving in litter clean-up costs and £13m in carbon savings. Retailers can choose what to do with the money but are expected to donate it to good causes which would raise £730m (2). What they do with the money will be reported to ministers and the government will publish this information each year.
The changes have had mixed response and not everyone is pleased that SMEs are avoiding the charge. Friends of the Earth argue it’ll send out mixed messages to shoppers and defeats the point of changing the way people think of plastic bags in the first place. However, the government has said that it would be costly and unfair to force the charge on to SMEs (4). The Association of Convenience Stores has said that only 24 per cent of local shops plan on opting in to the scheme voluntarily. Most would rather opt out as they say the charges would put additional pressure on their company and they’ll be fined £100 if they don’t supply records of their carrier bag intake.
However, positive changes have been witnessed in other countries that the scheme has been active in for some time. Wales was first to introduce the scheme in 2011 seeing a 71 per cent drop in the number of bags used by customers followed by Northern Ireland in 2013 who saw a 42.6 per cent annual reduction (2). Scotland introduced the charge in the last quarter of 2014 and has seen huge success with single bag usage falling by more than 80 per cent (3). In other parts of the world, Bangladesh was the first to introduce the charge in 2002 with other countries following such as South Africa, China, Italy and US state of California.
Reasons why SMEs should embrace the charge
Be a leader – Be one of the first in the market to claim the green niche with 58 per cent of consumers saying it would improve or impact their perception of a company (5).
Increase brand visibility – This is a great opportunity to start printing branded bags to sell as consumers will be more inclined to buy reusable bags now that they’re charged for single use ones. In countries where the charge is in place, 90 per cent of consumers regularly use reusable bags.
Attract the ‘green’ demographic – More and more consumers are taking environmental factors into account when making purchase decisions and studies show that environmental awareness has risen consistently every year since 2005.
Giving back – Companies are encouraged to donate the money to good causes and this could help improve the perception of your company with UK consumers more likely to buy from a company that donates to charity. In Wales, a total of £22 million has been raised for good causes so far.
Recouping costs– Within the first year of the charge, the Government is offering companies the chance to claim back costs incurred with becoming compliant. This opportunity may stop as the scheme progresses and more companies take part so make the most of the scheme whilst you still can.