Proposed Irish packaging tax is "nothing but stealth tax"

Written by: Recycling Waste World | Published:

Plans to introduce a tax on packaging in Ireland have been dismissed as “nothing but a stealth tax”, writes David Burrows.

Critics of the Irish government’s proposal argue that packaging is being unfairly targeted and that any tax would skew the market and leave Irish companies at a competitive disadvantage given that there is already the ‘Green Dot’ scheme in place, namely the European network of industry-funded systems for recycling packaging.

There are even suggestions that the tax could have a detrimental impact on the environment, increasing the amount of food waste as packaging is cut to save money.

The Irish government’s consultation on the proposals for a packaging levy closes next week (August 5), and many in the industry, both in Ireland and the UK, hope the idea won’t see the light of the day again.

“If the Irish government wants to introduce a tax to raise revenue, then that is up to them, but please leave [packaging] out of it, and please stop claiming it will have some kind of magical environment improvement,” said the Packaging Federation chief executive, Dick Searle.

Others also questioned the rationale of the scheme.

“It sounds like just another stealth tax to me,” said Jonathan Short, Eco Plastics' managing director. “There are sufficient commercial drivers to concentrate the minds of the packaging producers – not least of which is the cost of virgin polymer and the drive towards sustainability. This drive by the big brand owners should not be underestimated.”

The industry is awash with news around lightweighting: washing up liquid bottles are now 36% lighter than in the 1990s, soup cans 14% lighter and plastic bottles 25% lighter. But manufacturers are asking how thin they can go without running the risk of the packaging not doing its primary job: to protect the product inside?

Plastic packaging only accounts for around 10% of a given product’s carbon footprint, which leads some to conclude that it is being unfairly targeted, and completely undervalued; especially when it comes to food.

“Packaging has a key purpose in protecting produce,” explained Adam Read, AEA global practice director for waste management and resource efficiency. “If we can further develop take-back schemes, re-use and recycling through the supply chain, through economic incentives and the increasing costs of disposal, then we may not need to further target the sector.”

Peter Woodall, spokesman for the Packaging and Films Association added: “Packaging prevents waste, damage and spoilage. We just need to keep designing packaging for resource minimisation, recycling and recovery, then educate the public on the need to recycle and re-use, while encouraging more local authorities and the governments to invest in better recovery systems.”

Woodall suggested the tax “is not a good idea, but it’s a typical political move based on raising income rather than a full scientific appraisal of the clear and measurable value of modern-day packaging.”

He said the Irish government had made the same mistakes with the plastic bag tax; the benefits of which are still debatable.

Bob Gordon, head of environment at the British Retail Consortium, said there are lots of ways to optimise packaging, but a straight tax looking at weight would completely oversimplify the situation.

“We oppose this tax, as we did the plastic bag tax, but this is a different issue. With plastic bags we agreed that we needed to reduce them, but the conflict was around how we went about it. Indeed, you could argue that there is no need for plastic bags, but packaging is here to stay, however, its role is being completely undervalued.”

The plastic bag tax has raised almost 150 million Euros to date for the Irish government, but a spokesman maintained that the “outstanding success” of that levy has not turned the government’s attention to simply replicating it for packaging. “The packaging levy is something that is obviously directed at producers, whereas the plastic bag levy is directed at consumers.”

However, Incpen, the Industry Council for Packaging and the Environment, said the tax was being unfairly directed at producers and would make the total charges on packaging the highest in Europe. “Combining a tax with the Green Dot fee would make Irish packaging the most expensive in Europe. It would also do nothing to reduce waste,” warned Incpen director, Jane Bickerstaffe.

“We recognise that in the current economic climate there is an urgent need for revenue-raising measures ... [but] a packaging tax would not be an appropriate part of this programme.”

In an 11-page submission to the Department for Environment, which is leading the consultation for the Irish government, Incpen outlines in detail its opposition to such a tax. It reads: “We believe that the focus on waste from used packaging is disproportionate, particularly in light of the fact that the packaging targets in Ireland were comfortably exceeded in 2009. The proposal also overlooks the vital role packaging plays in reducing the environmental impact of delivering and using packaged goods.”

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