THE ANNOUNCEMENT OF the proposed latte levy this week has left a number of small business owners scratching their heads.
Love Supreme and Meet Me in the Morning are two Dublin coffee shops that see the levy on all coffee cups as an “easy way out” which will have a damaging effect on small Irish businesses.
Environment Minister Richard Bruton launched a public consultation on the proposed levy this week as part of a number of measures aimed at changing consumer and business behaviour. The exact figure of the levy will be determined following market research, but it’s likely to be 10c, 15c or 25c.
The minister said that under the measures shops will have to display pricing information so that their customers have all the information on what they will have to pay. Coffee shops will have to set out the price of coffee alone (this price would be of use to people who have their own keep cup).
Additional charges on top of the price of a coffee would also have to be displayed, such as the added charge for using a single-use cup (which would include the price of the disposable cup and the levy).
In last year’s budget, the 9% VAT rate for hotels, restaurants and hairdressing was increased to 13.5%. Owner of Love Supreme in Stoneybatter, Ken Flood, says the latte levy will have a similar “damaging effect” on small Irish businesses.
The Stoneybatter coffee shop has had compostable cups for the last six years but Flood believes any initiative to better the environment should be done in a “sensitive and sustainable way”.
“We aren’t necessarily against levies, we want change and feel it’s great to encourage people to make environmentally conscious decisions when consuming,” said Flood, but treating a “multi-national in the same way as a small corner coffee shop may not be fair”.
Maybe don’t levy small businesses. Or rather than a levy for small businesses use incentive-based rewards for more sustainable practices for a small business like tax /vat breaks to get businesses on board.
“It’s the easy way out. Most small hospitality businesses run pretty close to the line in terms of profit. As they’re continually forced to increase the price of their products, to accommodate VAT increases and levies it makes sense the people will buy them less frequently and as a result, their profits will decrease.
“A huge reason tourism is booming in Ireland is because of the smaller more creative, niche businesses. They provide real colour and diversity where large chain like businesses often try to attract everybody by providing a fairly bland and general product that is experienced everywhere in the world.
“These decisions by the government will damage the Dublin we know and love, leaving us with just big corporations and large hotel chains,” Flood told TheJournal.ie.
‘Punished’
Bruton has argued that some cups can be compostable but only if they make their way into the brown bin waste stream.
“The difficulty is we do not have the infrastructure in the retail sector to ensure that those compostable cups are making their way [into the brown bin stream],” he said.
Meet Me in the Morning on Pleasant Street is one of many businesses which have invested in keep cups and compostable cups to avoid single-use items.
Owner Brian Ó Caoimh said if the government is going to put the levy on takeaway coffee cups they may as well go the whole hog and address the situation by putting compost and recycling bins on the street.
“In the shop, we’re only using vegetables from Ireland from an organic farm, like 10 kilometres away. We’re all about sustainability, seasonality and we’re kind of, in my opinion, on the cutting edge of how far you can push things in terms of restaurants and cafes.
“It seems a little bit unfair that a company that is friendly to the environment could be punished. I mean, if you went into any restaurant or cafe in Dublin the thing that you could change that would have the most impact is not their coffee cups.”
Ó Caoimh added that there is a concern among local businesses that overall demand for coffee would go down if it became too expensive.
All revenue raised from the proposed measures is due to go into the Environment Fund and be reinvested in environmental actions, such as tackling waste blackspots and litter community programmes such as the National Spring Clean initiative, Tidy Towns and the development of community areas and gardens.
The fund, which is already in existence, is currently supported by levies on plastic bags and landfill waste. Since its inception in 2001, it has collected in excess of €830 million (to December 2018).
When asked by TheJournal.ie if the Department of Communications, Climate Action and Environment had any plans to install more recycling infrastructure with the funds raised by the levy, a Department spokesperson said:
The Fund will continue to focus on environmental action and the precise allocation of funding to specific projects considered on an annual basis.
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