Wed | Sep 30, 2020

Beverage industry imposes $1 cess on plastic bottles

Published:Friday | February 15, 2019 | 12:19 AM

A coalition of at least 10 manufacturers and distributors in the beverage industry have agreed to impose a cess on polyethylene terephthalate, or PET, bottles, funds from which will be paid to Recycle Partners of Jamaica, RPJ, as the businesses join with the Government in cleaning up the environment.

Wisynco, in a notice to the Jamaica Stock Exchange, said the beverage industry, effective February 1, 2019, is applying the self-imposed cess of $1 per bottle.

The cess is to enable RPJ “to move with alacrity” in establishing depots to collect and recycle PET bottles, Wisynco said.

The drinks company said imposition of the cess is a precursor to a planned national deposit refund scheme the Government announced last year.

Selling prices of products have therefore been adjusted to offset the self-imposed cess, said Wisynco, whose primary activities are the bottling and distribution of purified water and beverages, and the manufacturing of a wide range of plastic and foam packing and disposable products mainly used in the retail, food service and tourism industries. Wisynco distributes 126 brands with more than 4,000 different products.

Last year, the Government, through minister without portfolio in the Ministry of Economic Growth and Job Creation, Daryl Vaz, announced a ban, effective January 1, 2019, on the importation, manufacturing, distribution and use of single-use plastic carrier bags commonly referred to locally as ‘scandal’ or ‘T-shirt’ bags; the importation and manufacture of expanded polystyrene finished products used in the food and beverage industry, and the importation and manufacture of disposable plastic drinking straws.

Vaz also announced that “in short order, the Government also hopes to announce the measures to be taken to regulate plastic bottles, particularly PET bottles”.

However, even before the Government announced the implementation of such measures, the private sector has seized the opportunity to put in place a deposit refund scheme.

Don Wehby, Group CEO of food and financial conglomerate GraceKennedy Limited, said a coalition from the beverage industry “has been working for several months and has developed, and is implementing, a plan with the goal of recycling 85 per cent of PET and HDPE or high-density polyethylene bottles in Jamaica by 2028.

HDPE bottles are blow-moulded containers used for detergents, shampoos, motor oil, milk and other liquid products, and drugs and cosmetic products. Milk bottles are the single biggest HDPE package. Most milk and water bottles use a natural-coloured HDPE resin.

Wehby said the coalition has been supported by work done by the Caribbean Policy Research Institute, Jamaica Environment Trust, the Government, National Environment and Planning Agency and Jamaica Customs.

“The deposit refund system will be fully self-funding, with no expectations of taxpayer support,” said the GraceKennedy CEO. “We expect to, in particular, involve and engage all of our almost 1,000 schools and students in public education and awareness about us all working together to clean up our environment,” he added.

Asked about data which revealed that there is an estimated 80 million PET bottles used by the beverage industry for their products per month in Jamaica, Wehby said “the correct number is an average of about 70 million bottles sold into the trade per month”.

Volumes small

As to the proportion of PET bottles GraceKennedy uses for some of its products, he said the Group’s volumes are relatively small.

“Our foods distribution businesses distribute some products packaged in PET, and one of our factories currently manufactures beverages in PET bottles,” Wehby said.

With respect to representatives of the beverage industry which will be involved in imposing the cess, he said GraceKennedy is participating in the coalition along with other manufacturers/distributors such as Wisynco, Lasco, Pepsi Jamaica, Seprod, SM Jaleel through local subsidiary Jamaica Beverages, the four major PET bottle manufacturers – PolyPet, SweetCraft, United Plastics, and VersaChem – and PET recyclers Gravita and Jamaica Recycles.

“We expect other industry participants to join over time,” Wehby said.

In a statement to Parliament on February 5, Minister Vaz said that more than 50 per cent of the plastic waste generated in the island are plastic bottles.

He said the Government was partnering with the private sector in supporting RPJ through its contribution of $50 million per annum to facilitate the collection and recycling of plastic bottles.

Vaz said that despite RPJ’s efforts, to date only 11 per cent of the plastic bottles generated are collected each year.

Participating members of the private sector in the deposit refund scheme have instituted a self-imposed cess of $1 per bottle, which will see an initial private-sector investment of J$850 million into the programme, he said.

The initial investment in RPJ will be used to put in place collection points and increase collection capacity by way of truck purchases and fund an expanded education campaign, said Vaz.