Coffee cup tax would hit small businesses hardest

Retailers are calling for small businesses to be exempt from a proposed tax on disposable hot drinks cups, following a recommendation from MPs that customers should pay a 25p surcharge if containers are not recyclable. 

Under recommendations by the environmental audit committee, a ‘latte levy’ could stem the country’s growing waste problem caused by on-the-go drinks. 

According to its report, around 2.5 billion disposable coffee cups are thrown away each year. The committee advises that all disposable cups be recyclable by 2023. 

However, Roli Ranger, of Londis Sunninghill, West Berkshire, said the tax was yet another charge retailers were “being hit around the head with”.  

“We should get an exemption. You can see it helping the environment, but 25p is a massive hit. Some stores offer a cup for £1, while we offer Costa coffee for £2.50 – that suddenly becomes £2.75 and it’s a massive increase,” he said. 

Londis retailer Dave Hiscutt, who runs two stores in Weymouth, sold 18,803 hot drinks last year, many at a discounted rate of 80p through a loyalty scheme. Based on last year’s sales, a tax would cost his customers £4,700. 

“We compete with a Costa, a Wetherspoons, a Starbucks and a Caffè Nero and our price-point acts as a footfall driver. We already absorb cost to offer drinks at 80p, but it keeps us competitive,” he said. 

Mr Hiscutt said he would look to his manufacturer, Tchibo, to source fully recyclable cups. 

Currently, most disposable cups contain a plastic lining that many reprocessing plants can’t easily separate. While compostable cups are available, they are expensive, and others, such as those made by Frugalpac, do not yet meet the performance standards required by larger chains. 

“A 25p add-on would still make my coffee cheaper, but the onus should lie with manufacturers,” said Falkirk retailer Shabaz Ali, who sells 15 hot drinks every day at £1.25 and £1.75. “Customers and smaller retailers should not take the hit.”