Government faces industry resistance over ‘latte levy’

Government plans to impose a so-called “latte levy” of at least 20 cent on disposable paper coffee cups, before eventually banning them altogether, are facing a campaign of resistance from coffee shop owners, cup manufacturers and industry lobby groups, who claim it will damage business and be counterproductive for the environment.

The levy is one of a number of environmental measures in the Government’s Circular Economy Bill, which has been approved by Cabinet and is expected to become law before the end of the year. Single-use paper coffee cups, which usually also contain a small portion of plastic, will be banned for sit-in cafe customers. The levy will be initially set at 20 cent for takeaway coffees, but could theoretically rise to €1 per drink under the law.

The law will affect thousands of coffee shops around the State, as well as retailers, garage forecourts and other businesses that sell hot drinks. It will also drive up costs for customers — Ireland has one of the most vibrant takeaway coffee cultures in Europe, with more coffee shops per head in Dublin than any city on the Continent bar Amsterdam, according to industry research.

Green Party TD Ossian Smyth, the Minister of State in charge of the plans, has confirmed the Government’s plan is to ban paper coffee cups altogether, and that the levy is just an intermediate measure to get people to “change behaviour”.

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The Government wants all coffee shop customers to switch to reusable plastic “keep cups” instead. This would mean customers such as office workers and others who typically buy coffee on the move would have to carry around with them a clean coffee cup to hand over to be filled in-store each time.

Some coffee shop owners are worried that handling customers’ reusable cups will be unhygienic for staff — keep cups were banned by many shops during the pandemic over infection fears. They say their outlets’ energy and water usage and staff workload will also increase if customers don’t keep cups properly clean and they have to be washed at the counter first.

Some cup manufacturers, whose trade is threatened by the proposed law, have also argued to Government that the disposable levy does not take into account what the cup is made from, and it should be lowered for cups with less plastic. Cup Print, an Ennis company employing 200 people that makes recyclable and compostable paper cups, recently made a presentation to members of a subcommittee of the Oireachtas Joint Committee on the Environment and Climate Action, which is scrutinising the proposals.

It presented the politicians with a report by Danish engineering consultancy Ramboll which concluded that switching to hard plastic keep cups would result in using 3.6 times as much water and 2.8 times more carbon compared to compostable paper cups.

Terry Fox, Cup Print’s founder and chief executive, said 60 per cent of his stock was exported and unaffected by the ban. But he said an outright reusable cup ban would be “catastrophic” for Irish coffee sales as many customers might just not bother buying a hot drink at all if they don’t carry a cup.

He also said the proposals as currently designed could lead to more plastic being consumed through repeated buying of harder keep cups and a “worse outcome for the environment”.

Mr Smyth has argued that the vast majority of recyclable or compostable cups are just discarded by customers anyway, and that 200 million of them end up in landfill each year.

Karl Purdy, the founder of the Coffeeangel chain, which has five outlets in Dublin, says he agrees with the aim of the Bill to reduce environmental waste. But, he says, the levy and ban should be delayed until more studies have been carried out on the health and safety implications for staff who would end up handling hundreds of keep-cups each day washed by customers.

“The civic infrastructure in Ireland isn’t good enough for recycling and composting,” he said, adding that if it was improved, there would be less waste.

Coffeeangel’s keep-cup coffee sales rose to 6.5 per cent of total sales of cups of coffee in 2019. Mr Purdy said there was a “willingness to do the right thing” in the sector, but the proposals as currently designed would be damaging.

Duncan Graham, the chief executive of lobbying group Retail Excellence, which has several coffee shop chains as members, says he will write to the Government next week asking that the levy and future ban be delayed until the measures have been “better thought through”.