The Automatic Vending Association, AVA, is warning that any levy or tax on vending cups as part of the introduction of a single use plastic tax could have a severe negative impact on this successful industry.
The UK’s vending operating sector alone employs around 24,500 people. Even more people are employed by manufacturers, distributors and wholesalers involved with the supply of equipment, ingredients, service and support to the industry. Worth around £1.46bn per annum, the vending industry is a significant contributor to the UK economy.
The hot drinks vending business is unlike any other hot drinks retail outlet in its operational and financial structure. Only 12% of UK vending machines are fitted with debit or credit card readers. Instead, almost all machines work with coin mechanisms and none of these accept copper coinage. Thus the minimum level of a point of purchase levy on vending cups (paper or plastic) would be 5p. As the average retail price of a vending cup of coffee in the UK is only 27p, this means the minimum price increase to the consumer would be almost 20%.
Furthermore, 49% of vended hot beverages are provided free of charge, many from machines without a coin mechanism. It would be extremely difficult, if not impossible, to impose a consumer point of purchase tax or levy in those cases.
These factors make businesses within the vending industry particularly vulnerable to the imposition of any tax on single use plastics.
The unique structure of the hot drinks vending sector does, however, have the potential to promote the wider collection and recycling of single use cups. 85% of cups served through vending machines are in ‘closed’ workplace sites – mainly business and industry. They therefore represent the ideal scenario for establishing and promoting segregated post-consumer waste streams.
The vending industry is a long-term supporter of recycling and its cups have been collected for recycling through schemes such as Save-a-Cup since 1992. The industry continues to support recycling of both paper and plastic cups – both of which are entirely recyclable, in spite of well-publicised claims to the contrary.
“The AVA has worked with the Paper Cup Recovery and Recycling Group, The Paper Cup Alliance and cup manufacturers to ensure there is now sufficient recycling resource at UK-based paper mills to process every paper cup used in the UK market,” confirms Adrian Pratt, Chair of the AVA Environment Group.
“More companies are offering segregated waste collection services to deliver used cups to these paper mills. This includes specialist operators as well as most national waste management companies – the likes of Veolia, Biffa, Suez, Grundon and so on – and an increasing number of regional waste companies.”
It is also important to recognise that although highly visible, single use cups are a very small part of the UK’s overall packaging waste – paper cups account for only 0.7% of total paper packaging waste and 0.1% of household waste. A cup tax would therefore do little to improve the existing waste management infrastructure, or help to tackle the much larger problem of plastic packaging waste across all sectors of industry.
David Llewellyn, Chief Executive of the AVA, says: “Any tax or levy on single use plastic or paper cups would pose a direct economic threat to our industry and we would urge the government to avoid introducing any policies that will have a disproportionate impact on a successful UK industry.