Viking Food Solutions

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Is there an ulterior motive behind removing single use bags?

In 2018, Coles and Woolworths took the initiative to ban single use plastic bags in all their stores across Australia. From the first, it was a polarising decision. While environmentally conscious groups and customers hailed it as a great step in the right direction for achieving sustainability, many of the supermarket giants’ other customers disliked this new policy.

The main goal of the bag ban was to reduce the amount of plastic bags that end up making their way into the environment, a problem that is still harming marine wildlife and ecosystems. A phenomenal amount of such bags were used in Australia each day, so this initiative does sound beneficial.

Coles and Woolworths have been the initiators of this major change from start to finish. The National Retail Association’s David Stout said the ban was a "brave" move from the major supermarkets and was paving the way for smaller businesses — who typically cannot afford to risk the wrath of their customers — to follow suit.

... used to be factored into the cost of doing business for these supermarkets. ... negotiating with packaging suppliers, procuring them, shipping and warehousing them, and distributing them to stores only to then give them away.

"Obviously the best thing for smaller businesses is to either engineer out the bag completely or have the customer pay … they should be able to consider that strategy without fear of backlash."

So, many are hopeful major retailers will continue to lead the charge towards a more sustainable industry and move to ban other single-use packaging options.

However the reality could be quite different to this idealistic outlook. Surveys show that many supermarket customers simply purchase the ‘reusable’ bag and then throw it out as they would a normal one. The amount of plastic bin liners purchased has also risen, as customers can no longer use their shopping bags. The problem is, unless the entire cycle of a circular economy is ensured, simply having the capability for reusable does nor necessarily create a large-scale environmental impact.

So, is there another reason these two supermarket giants were so eager to take such a drastic step? It seems likely they were at least partially influenced by a major influence in the corporate world – the bottom line.

... make the removal of single use bags more meaningful than just a new stream of revenue for retailers ...

These bags used to be factored into the cost of doing business for these supermarkets. There are expenses beyond just the bags themselves, such as the costs associated with sourcing and negotiating with packaging suppliers, procuring them, shipping and warehousing them, and distributing them to stores only to then give them away.

Supermarket margins are already feeling the strain of price deflation. These businesses are generally making less than 6c in the dollar, so the opportunity to phase out this cost certainly makes good business sense.

It’s estimated that Australian retailers give away 6 billion plastic bags each year. Woolworths alone say they provide 3.2 billion each year. With each bag costing almost 3c to create, retailers stand to save more than A$170 million a year in direct costs. Selling these new bags at effectively creates another revenue stream potentially adding up to A$71 million in gross profit.

It’s a win-win situation, turning what was once simply another business expense into an avenue for profit. As Coles and Woolworths begin experiments to remove even more of their instore packaging, this situation will only improve further for them.

So, the question to be asked is, is the ban really worth it for consumers and the sustainability cause? In its current form, the ban certainly isn’t as effective as it could be, so perhaps not.

To make the removal of single use bags more meaningful than just a new stream of revenue for retailers, perhaps we should take on one of the UK’s initiatives in this area, and funnel some of the profits from the new bags into community programs or environmental groups to make sure the bag ban truly helps the environment.

It would also help if the government implemented education campaigns to draw the public’s attention to the need to cooperate to do their part in making sure the ban is effective in reducing the amount of plastic thrown away.

Sustainability is going to be a major issue for the foreseeable future. It is important we handle it with a more holistic and thoughtful approach than simply implementing bans on problematic materials such as plastics without considering the possible ramifications.

 

 

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