Consumers' Association warns against price hikes

The Consumers' Association has expressed fears that the eco-contribution could provide importers and retailers with the perfect opportunity to fleece consumers, as the controversial tax comes into effect today.

But the Chamber of Small and Medium Enterprise, the GRTU, has dismissed these concerns, saying it did not pay retailers to raise prices in these days of cutthroat competition.

The eco-tax, which comes into effect a month after its initial implementation target date, is being levied on a number of products ranging from beverage containers to white goods.

The aim of the eco-contribution is to encourage the producer or importer to assume responsibility for the product once this is put into the waste system. Producers and importers are being pushed to team up and organise recovery, recycling and treatment systems, in which case the product becomes exempt from the contribution.

Benny Borg Bonello, president of the Consumers' Association, is taking a sceptical stance. "I just hope this tax will not be just another windfall for the business community," he said when contacted yesterday.

The concern is that the eco-tax will be charged on existing stock, which would be against regulations. The only existing stock on which the tax will apply is refillable bottles. This means that the full effect of the tax should not be felt for days, possibly months.

Mr Borg Bonello said the association was still unaware of how the tax would be operating and at which point it would start being charged. "People are very suspicious about the way this tax is going to operate, especially in the early stages. Let's just hope the revenue from the tax will go to the government and not to the retailer."

Speaking at a news conference yesterday, GRTU director general Vince Farrugia said the days of price-watching were over. "It simply doesn't pay retailers to put up their prices because of the stiff competition. And cartels and price-fixing are a thing of the past," he told journalists.

Rather than raise the alarm, the consumer organisations should educate the people about the wide choice on offer and to opt for what is best for their pockets.

Mr Farrugia expressed his doubts as to whether the eco-tax would meet its environmental targets. "We believe the introduction of the tax was hasty and it will simply help to give eco-taxes a bad name. There is still no incentive to businesses to introduce recyclable schemes."

The volume of white goods in Malta, for example, was so small that it was not worth introducing recyclable plants. The shipping costs to recycle abroad were also very expensive, he said.

Mr Farrugia warned that retailers' stores would not become a garbage centre for people to return all their rubbish, as is currently happening in the case of beverages, at no financial incentive for the establishment owners.

The eco-tax was nothing more than a consumption tax, Mr Farrugia said, though he added that the impact on the cost of living would be minimal. He envisaged that the full impact of the tax would be felt by the start of the festive season, especially since many shops are still overstocked.

The GRTU had initially warned that the jobs of 1,200 workers were on the line if the government forged ahead with introducing the eco-tax on existing stock. He said this would have meant that a tyre garage with a stock of 6,000 tyres would have had to fork out Lm12,000.

The General Workers' Union said the eco-tax was being introduced without its blessing.

It said the government seemed to be more interested in reaching an agreement with the operators' representatives than the union, which was ultimately representing workers and pensioners.

The union maintained that the tax should be absorbed by the operators and not by consumers and that it would ultimately not solve the problem of the environment.