Latte levy will hit thousands of jobs and may close businesses, industry says

A storm is brewing over the Government’s proposed 20 cent tax on disposable coffee cups, with the industry warning the move could cost 4,200 jobs while failing to cut waste.

Using a law passed last year, the Coalition plans to levy 20 cent on paper take-away coffee cups to discourage their use and cut waste.

However, a new body representing cafes and cup suppliers warns that the move could hit jobs and possibly close businesses, but is unlikely to tackle any waste problems.

Research commissioned by the Irish Paper Packaging Circularity Alliance (IPPCA) calculates that the 20 cent tax, dubbed the latte levy, could cause 4,244 job losses in coffee shops as customers respond by cutting consumption.

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The report, by economist Jim Power, argues that forcing consumers to replace disposable paper cups with reusable versions could, by 2030, result in the industry producing 15 times the amount of plastic waste it now generates.

Michelle McBride, retail director of Butler’s Irish Chocolates, branded the levy “a blunt instrument” at the weekend, warning that the tax would ultimately prove counter-productive.

“Around 90 per cent of our members use entirely recyclable or compostable cups,” Ms McBride said.

She pointed out that the levy would be passed directly on to consumers, adding 20 cent to the price of a coffee for anyone buying it in a paper cup, a move that could hit sales, jobs and potentially close businesses.

The Government proposes introducing the charge under the Circular Economy Act, passed last year, which allows for levies on single-use packaging.

Mr Power’s report says that the cumulative impact of lower sales and possible business closures resulting from the latte levy’s introduction could actually cost the Government money.

[ The dark side of the spoon: Ireland to clamp down harder on plastic cutlery ]

He notes that in “real-life” situations, most studies show that single-use paper cups offer a significant environmental advantage over the reusable alternatives, which result in higher greenhouse gas emissions than disposables.

“The international evidence in support of a levy on single-use cups is not compelling and does suggest that it is not an appropriate course to pursue,” his report says.

Ms McBride maintained that coffee shops could opt for the cheapest reusable cups, which have a short life span so people are going to “throw them away anyway”, adding to the existing high quantities of plastic waste that the Republic produces.

Based on a survey that he carried out of 2,226 coffee shops, Mr Power calculates that replacing disposable cups with reusable alternatives would cost the entire industry €492 million.

This would stem from the replacements themselves and increased spending on dishwashing and drying equipment, adding to energy and staff costs.

[ Recycled plastic can be more toxic and is no fix for pollution, Greenpeace warns ]

“The alliance wants an open discussion on what might or might not work,” said Ms McBride. “Coming along with this blunt instrument is not the way to tackle single use.”

Mr Power argues that the levy is a disproportionate response to the problem. “It will undermine the coffee market; cost significant employment; cause some businesses to close; increase carbon emissions; increase water usage; and not achieve its desired effects,” his report warns.