Bottlers considering options should derogation request be denied

The two main local beverage companies are actively considering how they would package their drinks in disposable bottles should the EU refuse to give Malta a derogation and therefore lead to the introduction of soft drinks in plastic bottles.

The EU maintains that a ban on soft drinks in plastic bottles goes against the principles of free trade.

Both Farsons and General Soft Drinks Co. have maintained their preference for returnable glass bottles, and admitted that the change was a complex one which could deal a blow to business.

The two companies have pledged to do their utmost to introduce the least harmful disposable packaging on the market, and spare the environment from the damage expected to be caused by the introduction of millions of plastic or aluminium bottles.

Although environmental organisations agree that EU directives on the environment would considerably improve the situation in Malta, they have expressed concern over one particular law.

While the EU allows the packaging of most beverages in plastic bottles, the government, through Legal Notice 183 of 1994, effectively limits the bottling of non-alcoholic beverages to refillable glass bottles.

Environmental organisations have warned about the serious health hazards resulting from the burning of plastic in landfills and its high degree of non-biodegradability.

Last week, Nature Trust urged the government to keep its resolve and press ahead with its call for a derogation on plastic bottles in its negotiations with the EU.

Nature Trust said it believes that Malta's waste problems are already acute and that the country is in dire need of such a derogation to avoid having to dump an estimated 80 million bottles in landfills.

A decision on the issue is expected next month, though sources said the EU was unlikely to approve the derogation.

Farsons' deputy chief executive, Anthony Tabone said that as a bottler with a good track record of social responsibility, Farsons would have obviously preferred a derogation on the continued use of returnable glass bottles.

But should the market show a preference for one-way packaging, it would be "suicidal" for Farsons not to opt for it in order to protect its own interests, the interests of its employees and shareholders, and to meet consumer demand.

Once local protective levies on soft drinks are removed by 2003, the price of an imported soft drink in a plastic bottle (should the ban be lifted) could be cheaper than a locally produced soft drink in a glass bottle, industrial sources said.

Given the EU principle of free trade, Mr Tabone said the possibility of having to change to plastic or aluminium packaging was always an option Farsons seriously considered.

What one needed to consider, Mr Tabone said, was which system one should adopt to ensure the least possible impact on the environment.

It was too early to say what percentage of soft drinks would eventually be converted to one-way packaging, but in most markets the proportion of one-way packages to returnable glass had been very high. It was reasonable to assume that the same would happen in Malta, Mr Tabone said.

Farsons has, however, been considering a number of options.

Denmark recently introduced a system, which has been accepted by the EU, whereby a deposit is levied on all one-way packages, whether imported or produced locally.

A private company was set up to manage the return and recycling of the packages, be they PET, glass or aluminium.

The consumer receives a refund of the deposit paid when he returns the package - so the impact on the price to the consumer is neutral.

In Farsons' opinion, this system is better than an eco-tax because the former ensures that recycling takes place.

The Danish system ensures that the one-way package is returned and not disposed of indiscriminately. Another advantage of this system is that it would cater for one-way packages which are already on the market.

Given that the Maltese bottlers are not yet permitted to produce soft drinks in one-way packages, unlike their competitors elsewhere in Europe, the bottlers expect a transition period to enable them to get ready for the change.

Mr Tabone said Farsons, which bottles popular soft drinks like Pepsi and Kinnie, feels that a transition period of four to five years would not be an unreasonable demand.

"We also hope that the industry and government can work together to achieve the best possible results on collection and to study in detail the recycling options," he said.

General Soft Drinks Co Ltd managing director Brian Mizzi said his company had been a firm believer in the use of the returnable glass package for soft drinks for several years.

"We maintain that this is the most ecologically friendly and cost efficient system for the island because of our unique size and our annual soft drinks consumption, which is above 80 million containers."

Mr Mizzi said that General Soft Drinks had always maintained that Maltese consumers might initially prefer one-way packages. However, they would eventually become aware of the grave implications on the environment.

He said he was extremely surprised that the EU, renowned as a champion of the environment, did not seem to understand the logic of retaining this practice.

"We have been following the discussions with the EU on the packaging issue and believe that it will be a great loss to the island in general, both from an ecological and economic perspective, if we do not maintain the status quo."

Mr Mizzi said the General Soft Drinks management team, producers of Coca-Cola, was holding between three to four meetings a week on the issue.

"You have to remember that there are several delicate issues at stake - one of which is employment," he said.

He admitted that the company had not made up its mind, though it was "studying several alternatives". However, he would not give details.

Even though recycling of containers other than glass was possible, one had to keep in mind that there had to be a mechanism for recycling, he said.

"Remember our economies of scale are different to those of other countries. Ultimately, we have to ask whether we will be able to compete should the system be changed," Mr Mizzi said.

"We need to find a solution which will leave a profit for the company. Let us hope these new regulations will not end up harming an industry which generates so much employment in the country."