Plastic bags and the supermarket industry

The era of plastic bags is nearly over, from the 1st July, supermarket retailers will no longer be allowed to provide free plastic bags to customers after the introduction of legislation by the NSW government.

Each year Australians make their way through over three billion plastic bags per year. This means that each person uses 170 plastic bags each. Easily carried by the wind, a large proportion of bags will end up in the ocean, over 8 million metric tonnes. Studies around Sydney harbour have shown that fish contain small particles of plastic that can be damaging to the fish but also to anything or anyone that eats it.

Finally, the whole of Australia will be plastic bag-free. Only around 15 years too late but the change has come. Ireland brought in a plastic bag levy in 2002 and many countries around Europe followed suit in the years after. So what effect while this have supermarket giants in Australia?

Both Coles and Woolworths have announced they will be will be selling bags for life for 15 cents. The hope is of course that less damage will be done to the environment and Plastic bags will slowly begin to disappear from waterways as consumers move to reusable bags.

Plastic bags have numerous costs attached to them. Supermarkets negotiate pricing for them only to give them away free to consumers, costing them an estimated $171 million a year. With the introduction of multi-use bags, studies have estimated that plastic bag use should decline by 80 percent. It is estimated that costs will fall to closer to $105 million for production and distribution of these bags creating a large saving for supermarket companies. With this extra revenue stream, it is thought that these changes may add up to $71 million in gross profit for Coles and Woolworths.

There is some evidence that adding a levy to plastic bags might not even help the environment that much. In Ireland, consumers had grown so accustomed to a levy that it did not prevent them from buying the bags. In 2009, the government increased the charge by 10c to try and reverse the trend.

Furthermore due to a lack of education around the product, consumers were found to throw away re-usable bags and continue to purchase single use bags too. Without profits from purchases of multi-use bags put back into environmental projects, it may only benefit the supermarkets selling the bags rather than anyone else.