Coca-Cola Challenges Proposed Plastic Tax in Kenya as Industry Panics Over Eco Levy
by Betterman Simidi Musasia
Founder and Patron, Former CEO, Clean Up Kenya
June 7, 2024

Coca-Cola, the world’s leading plastics polluter, has come out to strongly oppose the Kenyan government’s proposal to introduce a plastic tax on its products. The tax, proposed in the 2024 Finance Bill as part of an Eco Levy which also seeks to address e-waste pollution, would require those who introduce plastics into the Kenyan market to pay a fee of 150 Kenya Shillings per kilo introduced, if passed by parliament.

This week, Coca-Cola Kenyan senior managers, led by Communications and Sustainability Director John Mwendwa, voiced strong objections to the levy at a public hearing being run by the National Assembly Finance and Planning Committee. Mr. Mwendwa argued that the Eco Levy constitutes double taxation since the company already pays fees to a Producer Responsibility Organization as required by the Sustainable Waste Management Act of 2022.

Earlier in the week, the company met with the Ministry of Environment, Forestry, and Climate Change Principal Secretary, Dr. Eng. Festus Ng’eno. This meeting, seen as a lobbying attempt, prompted Dr. Ng’eno to affirm on his X (formerly Twitter) account that the government is committed to fully implementing the Sustainable Waste Management Act.

Joyce Gachuhi, the CEO of the Packaging Producer Responsibility Organization (PAKPRO), while speaking on Spice FM, stated that the plastic tax proposal came to the industry as a shock, citing past cordial cooperation with National Environment Management Authority (NEMA) on implementing Extended Producer Responsibility. Her views were echoed by James Odongo, CEO of the Kenya Producer Responsibility Organization (KEPRO), who repeatedly called the proposal “outrageous” during a public webinar for their members. The two Producer Responsibility Organizations represent about 1000 producers in the country.

The plastic tax is the government’s first attempt to price plastic pollution, following delays in publishing Extended Producer Regulations which would shed more clarity on the matter. The proposed levy of 150 Kenya Shillings per kilo is significantly higher than the current fees collected by Producer Responsibility Organizations, which range from 0.5 to 10 shillings per kilo. Drink corporations and their lobby groups argue the levy is too steep, with some suggesting it could increase commodity prices by up to 150%.

However, research indicates this may not entirely be true. For example, 32 empty 500ml plastic bottles weigh about a kilo, meaning the cost increase per bottle of beverage would be around 7 percent or 5 Kenya Shillings if the 150 shilling tax per kilo is passed on to consumers. The increase could be significantly lower for other plastic packaged products since the packaging per item are only a fraction of a kilo. So it is not true that a kilo of salt is going to rise by 150 Kenya Shillings as some producer representatives have claimed in public facing scare assertions.

It’s however important to note that Coca-Cola does more than just sell beverage drinks in Kenya – they also sell plastics to the people! They make more profits from selling beverages in plastic bottles than in glass bottles. A 500ml of Fanta, for example, in a returnable glass bottle currently retails for 50 Kenya Shillings, while the same in a plastic bottle goes for 70 Kenya Shillings, implying the empty plastic bottle is sold to the Kenyan consumers for 20 Kenya Shillings. Remember that Coca-Cola also have to incur a cost on picking up the glass bottles.

Read more at https://cleanupkenya.org/coca-cola-challenges-proposed-plastic-tax-in-kenya-as-industry-panics-over-eco-levy/

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