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Plans to impose an additional burden of 9 million lats annually on the Latvian beverages industry

On 18 March, representatives of the Latvian beverage industry presented the study commissioned by the industry to the international auditor PriceWaterhouseCoopers, in which the impact of the system of depositing disposable beverage packaging (PET & cans) on the consumer and the industry in general was compared with the presently applicable container or sorted waste collection system.

Fierce discussions concerning the most effective management of used beverage packaging have already lasted a number of years in the public domain; however, no economic estimates have thus far been made on how full beverage packaging deposit systems could affect the Latvian beverage industry, the public and the state budget.

The study asserts the concerns repeatedly expressed by Latvian beverage manufacturers that the introduction of a system for depositing disposable beverage packaging (PET & cans) will burden the industry with a load of additional costs of more than 9 million lats every year, excluding the additional initial investment in setting up the system of an additional 9 million lats.

Chairman of the Board of Joint Stock Company AS Cēsu alus, Eva Sietiņsone–Zatlere:

“Currently, with the country’s economy practically frozen, it is extremely absurd to impose any additional burdens on Latvian manufacturers that do not facilitate the growth of the economy! The total investments in the introduction of the depositing system will be 9.3 million lats. The total additional costs of the stakeholders – manufacturers, merchants and most importantly – consumers or the general public – to maintain the depositing system will be 9 million lats every year. Manufacturing industries in Latvia are presently fighting for survival and none of the industries are in a financial situation to afford such investments. Total investments in the system will considerably exceed the potential public benefits.”

Chairman of the Board of Joint Stock Company AS Aldaris, Ināra Šure:

“Beverage manufacturers are planning to submit the research to all state authorities related to this matter. We think it is important to understand that everyone will suffer from this expensive system – the manufacturers, the consumers and the State. To compensate the implementation and maintenance of the depositing system, a beverage price rise can be expected, which may result in the decrease of the industry’s sales volumes by at least 6 %. As a result, the State will lose at least 3 million lats annually from unearned taxes. We sincerely hope that after the examination of the study conducted by PriceWaterhouseCoopers, the present plans to introduce the expensive PET and can depositing system in 2012 will be changed.”

Director General of Limited Liability Company SIA Cido Grupa, Marijus Kirstukas:

“The manufacturers are aware of their responsibility for the most effective and reasonable management of used beverage packaging, thus taking care of consumer interests. We suggest that all available resources, including considerable European Union funds, are directed at the development of the present container system and the education of the population, by explaining the advantages of the container system and sorting of waste. Beverage manufacturers are proposing to introduce the depositing system only for reusable glass packaging.”

It was already reported that the Republic of Latvia Ministry of Health has prepared a draft law “Amendments to the Packaging Law”, which provides for the urgent introduction (in 2012) of the mandatory depositing system for disposable beverage packaging.

The beverage industry has extensively attempted to persuade that the implementation of the depositing system for disposable beverage packaging is inadequately expensive and economically unjustified, but until now the industry did not have a study conducted by internationally recognised auditors to confirm such a statement.

The Latvian Brewers Society represents small breweries – SIA Piebalgas alus, AS Agrofirma Tērvete, SIA Zaksi (Užavas Beer), SIA Alus nams (Brālis), SIA Bauskas alus, SIA Lido (Lido Brewery), SIA Gulbenes alus, SIA Krāslavas alus, SIA Abula (Brenguļu Beer) and SIA Brūveris.

The Latvian Brewers Association comprises AS Aldaris, AS Cēsu alus, SIA Cido grupa, Lāčplēša Brewery and SIA Lodinga uzņēmums.

The Latvian Association of Non-alcoholic Beverage Manufacturerscomprises Cido grupa, Gutta, Latvian Green Point, Tetrapak, AS Aldaris, AS Cēsu alus and SIA Coca-Cola HBC Latvia.