PKG0033

Written evidence submitted by Coca-Cola European Partners and Coca-Cola Great Britain

Executive Summary

• As a responsible and sustainable business, we have an ambition to recover all of our packaging so that more is recycled and none ends up as litter.

• We have made a public commitment to use 50% recycled content in our plastic (PET) bottles by 2020, working with the UK’s largest plastics reprocessing company to source the material, thus demonstrating our commitment to support the circular economy here in Great Britain.

• While soft drinks plastic packaging makes up just 20% of the total food and drink packaging on the market, plastic (PET) bottles represents 53% of the total number of soft drinks packs sold each year – so we recognise how important this issue is.

• PET bottle recycling collection rates have reached 57%. However, progress seems to have stalled. We believe a new approach is needed to ensure PET bottles are a leading part of the packaging circular economy/resource efficiency agenda.

• To deliver genuine change there needs to be a wider debate on the full waste value chain. Of the 226,000 tonnes of PET bottles collected for recycling, only an estimated 31,000 tonnes ends up as recyclate to go back into PET drinks bottles[1]. We want this to change.

• We believe there is an opportunity to improve recycling rates in this country through reform of the current producer responsibility– or PRN – system.

• As part of any such reform of the producer responsibility system in this country, we would support new interventions, such as a well-designed deposit return system (DRS), if this leads to higher recycling rates and a reduction in litter. However, we recognise the complexity and the need for any such intervention to work for consumers, local authorities and smaller businesses. It must also be must be done in a holistic way that supports the strategies of the devolved and Westminster Governments to build a circular economy in the UK.

Background

Who we are:

Coca-Cola European Partners (CCEP) is the bottler, distributor and seller for both The Coca-Cola Company and other brand owners. CCEP is the largest Coca-Cola bottler in the world by revenue[2].

Coca-Cola Great Britain (CCGB) markets the beverages bearing the trademarks of brand-owner The Coca-Cola Company (TCCC) in the UK. To avoid duplication, CCEP and CCGB have produced a joint submission.

• In the UK market, we produce 19 brands, including sparkling soft drinks, still and sparkling fruit juice drinks, isotonic sports drinks, still and sparkling water and energy drinks. Our most successful brand, Coca-Cola (Coca-Cola, Diet Coke and Coca-Cola Zero Sugar), is also the biggest grocery brand in GB[3]. Our products represent around 25% of the total soft drinks category in the UK[4].
• We sell over 4 billion drinks a year in a variety of packaging formats: aluminium cans, glass, plastic bottles and dispensed products requiring very little packaging, and portion size - from 150ml cans through to 2 litre bottles. We currently use around 153,000 tonnes of packaging materials each year, including glass and aluminium, with plastic accounting for around 24% of that total.
• Throughout Great Britain we have a network of six manufacturing sites, plus logistics and business centres, employing around 3,500 people. For every Coca-Cola job, we create a further eight jobs along our supply chain and in the communities where we have operations[5] (a total of 34,500 British jobs across the economy).
• 97% of the products we sell in this country are made here.
• We are investing £74 million into our GB operations in 2017, bringing our total investment to £430 million over the past seven years.
• According to an economic impact study, the activities of the Coca-Cola System contribute £2.4 billion to the UK economy[6].

Our sustainable packaging credentials

We have long focused on initiatives to make our packaging as sustainable as possible including:

• All our bottles and cans are 100% recyclable – we’ve had recyclable two litre plastic PET bottles since 1978[7]. All of our bottles and cans carry the On Pack Recycling Label.
• In Great Britain, we’ve reduced the amount of packaging we use by 15% since 2007.
• We reduced our packaging by 7,000 tonnes since 2014.
• We are one of the largest users of recycled plastic bottles in the UK. Our plastic bottles currently contain 25% recycled material. Our aluminium cans and glass bottles contain more recycled-content. We have pledged to increase the rPET in our plastic bottles to 50% by 2020.
• It takes about 60% less energy to produce recycled PET (rPET) than virgin plastic, making rPET the second greatest opportunity after recycled aluminium to reduce our packaging carbon emissions (95% less energy to produce recycled aluminium cans than virgin aluminium cans)[8].
• In 2012 we helped establish Europe’s largest plastic reprocessing plant in the UK in Lincolnshire. We source more than 10,000 tonnes of recycled plastic each year from this facility.
• We are long-term supporters of Keep Britain Tidy, Clean Up Great Britain, Keep Wales Tidy and Keep Scotland Beautiful (KSB) – including initiatives such as a KSB’s Roadside Litter campaign.

We believe we can go further. That’s why in July 2017 we published a new strategy which set out our ambition to recover all our packaging so that more is recycled and none ends up as litter, focusing on actions in three key areas:

1. Innovating to ensure our packaging is as sustainable as possible
2. Using our brands to encourage more people to recycle
3. Championing new ways to improve packaging recovery and recycling

We welcome the opportunity to respond to this inquiry and the opportunity to discuss this evidence further with the Committee.

Questions

Impact

What is the environmental impact of waste from coffee cups and plastic bottles? Are the rates of use, collection levels and recycling levels of these products increasing or decreasing over time?

1.           Local authorities have done a great job in increasing recycling rates overall and for plastic bottles in particular from 3% in 2001[9] to 57% now. 99% of local authorities collect plastic bottles through their household kerbside recycling collection system[10]. We know around 65% of our products are consumed in the home.

2.           However, the total plastic bottle tonnage collection rate from households has “slowed down”[11] says industry experts, Recoup. They state that nearly 7.5 billion plastic bottles were collected for recycling in 2015, with 5.5 billion not collected for recycling[12]. Their surveys reported that in 2015 57%[13] of plastic bottles were collected for recycling, in 2013 the rate was 58%[14], 2011 it was 48.5% and in 2009 46%[15]. 

3.           WRAP found that of the 594,000 tonnes of plastic bottles put on the market, 397,000 tonnes were PET bottles and of this, 226,000 tonnes were collected for recycling[16] – giving a collection rate of 57%.

4.           This is despite the fact that and soft drinks containers are one of the most easily recognisable and recyclable materials on the market.

5.           While soft drinks plastic bottles makes up just 20% of the total number of food and drink plastic packs on the market (food is 73%), within the soft drinks sector, plastic represents 69% of total soft drinks packaging material (by volume in litres) and 53% of the total number of soft drinks packs on the market[17]. This shows how important an issue it is for us as a business, but also the wider sector.

6.           However, the collection rates are only one part of the debate – what happens to those plastic bottles once collected is key. WRAP’s Plastics Market Situation Report shows that of the 226,000 tonnes of PET bottles collected for recycling, an “estimated 110,000 tonnes of PET packaging is recycled in the UK, including some 95,000 tonnes of primarily clear PET bottles, with bottle to bottle accounting for [just] one third of the final UK end market application”[18] – roughly 31,000 tonnes. We believe this needs to change.

7.           While the littering of drinks bottles packaging is often visible, it is a relatively small percentage of the overall total amount of plastic drinks bottles on the market, but we do not want to see our bottles or cans littered anywhere[19].

8.           We want to see a greater amount of drinks bottles being collected and reprocessed as drinks bottles, ensuring resource efficiency and a full circular approach to recycling. We want a greater collection rate at household and ‘on the go’, less of our packaging littered so that material can be captured and a better functioning waste management system which generates economic and environmental benefit. We have outlined below some ways in which we feel recycling rates and the quality of recyclate can be improved.

What are the challenges of recycling these products? What obstacles have prevented greater progress in increasing recycling rates?

9. We have long believed that household collections provide a robust packaging recovery solution for Great Britain, but we acknowledge that recycling rates have stalled and understand the growing societal frustration around the issue of litter. Like other forward-thinking businesses, we think it is time to update the producer responsibility system as we look to improve the current approach.

10. The packaging producer responsibility system in Great Britain is based upon Packaging Recycling Notes (PRNs) and it has worked well in providing a market-based, efficient and cost-effective system for business. As one of the largest contributors to the PRN system from the manufacturing sector in this country, we support the current principles which underpin the scheme:
 

• The scheme is mandated and regulated. This is critical to create a fair and reasonable level playing field. A voluntary approach will not deliver the funds and scale needed and may allow non-contributors to avoid their responsibilities;
• There is shared responsibility along the supply chain. This principle is important as it helps establish ownership, collaboration and commitment to the inputs and outputs of the scheme. It means there is a fair and equitable division of costs across the chain, encompassing all those in the waste chain – local authorities, waste management companies and those sectors currently covered by the existing PRN scheme;
• It’s a reasonably simple mechanism driven by supply and demand encouraging innovation and competition to avoid escalating costs;
• It has clear targets – which all material types are measured against.

11. However, there are challenges with the current system and we want to see reforms that will deliver improved recycling outcomes. Our vision is that all our packaging can – and should – be recovered and ultimately recycled, which is why we are calling for significant reform to the current producer responsibility scheme in Great Britain.

12. If we are to improve recycling, we believe that the Governments of Great Britain need to work together and with industry to create a new producer responsibility system that works for everyone in the value chain. To do this, reform must focus on these key areas:

• Financially reward those who design packaging that can be easily recycled
• Incentivises the use of recycled-material
• Supports British processing and reprocessing, instead of encouraging materials to be exported for recycling – we were particularly disappointed that Government’s Industrial Strategy green paper only mentioned resource efficiency in just two paragraphs in the 132 page report[20] and believe this is an important opportunity.
• Guarantees good environmental outcomes through more transparent use of funds – including support for anti-littering initiatives
• More stretching targets to help drive behaviours and a lower de-minimus payment qualifying level to capture more of the materials currently being used

13. If the household recovery system is to be fully effective, then there is also a need for the administrations in Westminster and Holyrood to accelerate their ongoing work to create consistency in collections and communications on recycling – learning from the positive experiences of Wales. A reformed PRN system could support this work – particularly in providing the funds necessary to communicate effectively with consumers.

14. There is still some confusion from consumers about what can be recycled. Viridor’s UK Recycling Index 2016, found the “key barriers to increasing recycling levels are a lack of knowledge among consumers, a lack of consistency among councils and a lack of transparency about what happens to waste”[21]. There is evidence that consumers do not know what value recycling brings[22].

15. There is also a lack of on-the-go recycling infrastructure. While tonnage of plastic bottles collected for recycling is greatest through household collections, with our 500ml bottle being one of our most popular plastic bottle purchases, there is a role for an improved recycling on-the-go infrastructure to capture more of these drinks containers. As Recoup rightly state: “An effective scheme can generate good quality material and also reduce litter”. Recoup’s 2016 Survey found that of the local authorities who responded, 63% did not offer an on-the-go recycling system[23]. While this is not a complete picture, this shows there is more to do.

Progress

Are consumers aware of the complexities of recycling these products? How could we increase awareness amongst the public and what impact would this have?

16. Soft drinks packaging is one of the most easily recyclable packaging formats through the local authority system. The 57% collection rate for PET plastic bottles shows there is some degree of consumer engagement, but more can be achieved. Government, packaging producers, manufacturers and waste management companies should prioritise making it as easy and simple as possible for consumers to engage in recycling plastic drinks bottles – through consistent and nationwide infrastructure, through appropriate funding, with shared responsibilities across the waste chain and through impactful and engaging communications.

17. We welcome WRAP’s ‘framework for greater consistency in household recycling’ which will help local authorities in their approach to more consistent collection systems, but we know that many of our consumers are ‘Green Casuals’[24] – they make up 40-55% of the demographic and have better intentions than actions – recycling some things some of the time, but not all things all of the time.

18. We need to make it easy, simple, impactful and ideally fun for consumers to recycle in order to encourage change. We believe that the focus needs to be on educating and enthusing consumers to recycle. This should be through the current universal household kerbside collection system, but we also recognise that a well-designed Deposit Return Scheme (DRS) could play a role in helping to increase recycling rates and reduce litter.

19. The Government’s recently launched Litter Strategy provided an opportunity to bring together the various stakeholders to better engage and inspire consumers – both in and out of the home. We are pleased to have been invited to join a working group looking at consumer behaviour change communications as well as Defra’s working group looking at “voluntary and economic incentives to reduce litter from drinks containers and promote recycling”. A consultation on this latter issue is expected shortly.

Solutions

What initiatives could be utilised to reduce coffee cup and plastic bottle waste or to lessen the impact of this waste? In particular what are the opportunities and risks associated with:

1. Incentives to encourage the use of re-usable alternatives for these products.
2. Charge, taxes, deposits or levies on the use of these products.

20. From our experience elsewhere in Europe, we know that Deposit Return Schemes (DRS) can work if they are developed as part of an overall strategy on the circular economy, in collaboration with all relevant industry stakeholders. We are open to exploring any well-thought-through initiative that has the potential to increase recycling and reduce litter. We need to establish a scheme that works in the UK – where we have a unique set of circumstances, particularly with a well-established household recycling collection system.

21. One area of potential opportunity relates to those packs consumed on the go. Our internal data shows that around 65% of our packaging is consumed in the home; approximately 25% is consumed in other outlets, such as offices, restaurants and cafes; while it is estimated that the remaining 10% is consumed on the go. Genuine reform of the current PRN system could be complemented by a well-designed DRS system targeting drinks products consumed on the go such as small PET bottles.

22. Ultimately, though, any such interventions will require regulation to work on a national level and leadership from the Governments in Westminster and the devolved administrations. That’s why we want to see a national dialogue on reform of the producer responsibility system as a whole and the role of new interventions such as DRS.

23. We would be happy to share with the Committee our thoughts on what a ‘well-designed’ DRS could look like.

September 2017