MADRID – The Spanish government is about to adopt new legislation on waste and plastic. This new plastic law has major implications for the food and beverage industry.
As a result, this sector will incur additional costs of €7 billion. This is according to a recent study by the Spanish consultancy Analistas Financieros Internacionales (AFI). Halving plastic disposable bottles, adapting the packaging production process, or introducing a new landfill tax will have major economic consequences. The report predicts the closure of some 2,400 businesses, the loss of 26,500 jobs, and a price hike for consumers.
Bad timing plastic law
The new waste law and the Royal Decree on packaging and packaging waste are currently being discussed in the Senate. They come “at the wrong time”, says Mauricio García de Quevedo, general manager of the Spanish Food and Beverage Industry Federation (FIAB). Inflation, energy prices, and the war in Ukraine threaten the economic recovery after the coronavirus. These factors may also lead to adverse effects in the future. “Continuing with a legislative agenda as if nothing had happened, with major consequences for business costs and employment, is not right at the moment, said García de Quevedo.
Major cost increase for companies due to plastic law
The introduction of the new waste law means a cost increase of €780 million for companies in the sector. Consequently, half of this will have an impact on the profit margin of the companies. The other half will affect food prices, explains Diego Vizcaino, partner at AFI.
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However, the impact of the Royal Decree on packaging and packaging waste is even greater. The additional costs of this amount to €6.27 billion. This is due to the new requirements for the production of reusable packaging. As a result, companies have to adapt their production processes. And also by halving the number of plastic bottles. “Not all companies can comply with this,” Vizcaino assures. About 2400 companies (7% of the sector), mainly medium and small companies in Catalonia, Andalucia and Castile and León, say they foresee problems.
Ambitious plan for Spain
“We are not questioning the circular economy,” García de Quevedo assures. Though, we regret that the Spanish proposal is “more ambitious” than the European directive and has tight deadlines.
“It is imperative that the government and industry consult to discuss the implementation of these measures. Still, without penalising companies. In particular, the SMEs in empty Spain should be taken into account. this Royal Decree not only harms the sector but also the economy as a whole,” said the director of FIAB.
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