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Why do you subsidise Coca-Cola?

Updated: Dec 28, 2020

Coca Cola is probably not the only company many of us have been subsidising for years. There are quite a few big names which you can put in this bucket. It is very trendy to call for consumers to boycott large ‘greedy’ corporations for the sake of it, but this is not our intention here. We wanted to bring something else to your attention.

Plastic is cheap. Products made from plastic are cheap. Plastic packaging is cheap. 1kg of virgin plastic costs only about £1.20. That’s one of the reasons why so many companies prefer to use virgin (new plastic) instead of investing in recycling.

From commercial perspective, the price of a product should cover all costs of making, marketing and , cost of bringing the product to the consumer plus some profit. But what is the true cost of making a plastic product and are all costs included in the price? If not, then who is covering the actual costs of making plastic products or plastic packaging. Well, it is you. Your family. Your children.

Hence the question, why do you keep subsidising large corporations and an industry worth nearly $198 billion? Yes, you have read the number correctly. $198 billion. From your monthly salary, you keep subsiding industries worth billions though your direct tax contributions and other tax levies .

According to the World Economic Forum report plastic production is expected to quadruple by 2050. With recycling of plastic at around 15%, who do you think will pay for cleaning of the beaches, forests and oceans from plastic? As things stand at the moment, companies that use plastic are not required to take responsibility for disposal or utilisation of their products or packaging at the end of their useful life. They pass this responsibility and costs to us. Why? Because if they had to deal with the amount of plastic waste they generate they will loose quite a big chunk of their profits. Only in the UK, Coca Cola generates around 37,000 tonnes of plastic waste a year. Every year. The manufacturers of plastic packing and companies that use them cover only 10% of the costs of recycling it. You will cover the rest.

Imagine if you had a neighbor who is a builder. He makes money renovating people’s houses, however in order to bring the cost down, he does not rent a skip to dispose of the waste properly. Instead, he dumps all waste in your garden expecting you will cover the cost of disposal. How does this sound do you? The same is with companies which use plastic in their production and products but expect that you will cover the cost of their waste utilisation.

Production of plastic and use of certain chemicals in various products also leads to destruction of our natural environment and health issues. It is estimated that only in Europe, the health costs of hormone disrupting chemicals found in plastics, food containers and cosmetics are just over 150bn euros per year. That’s around 7,500 euro for every person living in Europe per year. And this is only one of many health issues caused by plastic. The costs of treating these health problems are borne by you.

Plastic may appear cheap but not when you take into account all the costs, including cleaning up, treating health issues and environmental damage. These costs are not included in the price of the products as it will make them more expensive hence less affordable or would reduce the profits companies make. Hence, year after year you keep subsidising multibillion companies by paying for all the additional costs not captured in the product price.

You may ask then what you should do? Sadly, you cannot pay stop paying taxes which go towards covering some of the costs. But you can choose products which are plastic free, you can choose to take your own water bottle and refill it, you can choose to buy drinks in glass bottles or cans which have lower environmental impact. These changes are in your hands. So next time when you are buying a bottle of coke or any other product in plastic packaging, ask yourself, do you really want to subsidise the company that made it?


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