The flat white index: How much does taking your own coffee cup save?

5 January 2018

UPDATE 9 March 2018: After considering the Committee's recommendations, the government has decided not to pursue a 'latte levy', instead favouring established industry discounts on recyclable cups.

However, chair of the Committee, Mary Creagh MP, doesn't believe the government has made the correct decision. She comments: "Evidence to our inquiry demonstrated that charges work better than discounts for reducing the use of non-recyclable materials – as was the case with the plastic bag charge. By choosing to favour voluntary discounts for reusable cups, the government is ignoring the evidence about what works."

A spokesperson from the Department for Energy and Rural Affairs (DEFRA) comments: “Industry has a crucial role to play in making more products recyclable and we are working with them to reform our packaging waste regulations so producers are incentivised to take greater responsibility for the environmental impact of their products.

“But it is wrong to say government is not taking decisive action - we have set out our commitment to the environment in our 25 year plan, published in January, and we are looking at further ways to reduce avoidable waste and recycle more as part of our resources and waste strategy."

Being something of a coffee connoisseur (read: snob!), I was somewhat stirred by the news that the House of Commons Environmental Audit Committee (EAC) has recommended a 25p tax – already dubbed the ‘latte levy’ – on all non-recyclable cups of coffee being sold.

The report cites the need to fund better recycling infrastructure as the reason for the levy, as 2.5 billion unrecyclable cups are thrown away each year.

Henry Wilson, founder of specialty coffee publication Perfect Daily Grind comments: “We believe this is a positive step forward as the coffee supply chain needs to be more sustainable, whether it's in coffee shops or on the coffee farms.

“Given the impact of cup manufacturing and waste disposal on the environment and global climate, it seems fitting that as we enjoy our daily coffees we also do our bit to support the people producing them.”

Now, while I understand the environmental benefits, this proposed tax stoked my free-market coals somewhat – surely hitting coffee drinkers with what I feel is a very disproportionate levy is unfair? After all, these people are not smokers who cost the NHS millions, but mostly workers getting a caffeine jolt before starting the daily grind or parents in need of a bit of extra energy while doing a shop.

Personally, I think this latte levy seems to be an exercise in ‘Nudge Theory’. This is a concept developed by economist Richard Thaler, who believes that sweeping changes to regulation or tax don’t alter consumer behaviour for the better, and in fact have many unintended consequences.

An oft-used example is the window tax - a tax that existed in England and Scotland for more than 150 years. Here, you were taxed depending on the size and number of windows you had in your home, but the unintended consequence was that many people simply bricked up their windows to avoid paying the levy. The same is true of newspapers of yore that were taxed based on the number of pages they printed: this is why broadsheet newspapers exist – you can fit more text on a massive page and therefore pay less tax.

With the latte levy, the unintended consequence is that people decide to stop buying coffee, which may then force independent coffee retailers out of business.

As James Hoffman, world barista champion and author of The World Atlas of Coffee commented on Twitter: “I get the desired outcome, but is there real precedent of a tax this large (relative to cup cost) being effective?

“For me it feels punitive to coffee shops first, then customers. I think MPs overestimate the health, in terms of profit margins, of this “booming” industry. While I’m not against something to drive innovation and change I’d just like to see some precedence that this is the best way to do it.”

Save money using recyclable cups

For now though, there are ways coffee lovers with recyclable cups can save money, here’s what you need to know:

Caffe Nero recyclable cup discount: Double reward stamps towards a free coffee

Caffe Nero doesn’t have a discount per se, but it will give you two loyalty stamps for each coffee you get in a reusable cup instead of the normal one per coffee.   

A spokesperson for Caffe Nero says: “The Committee’s report is an important addition to the debate on paper cups and disposable packaging as a whole.

“Caffè Nero is a signatory of the 2016 Paper Cup Manifesto, a cross industry public commitment recognised by the Department for Environment and Rural Affairs (DEFRA) to increase the sustainable recovery and recycling of paper cups. We will continue to work with fellow members of the Paper Cups Recovery & Recycling Group (PCRRG) to understand and address the current issues which prevent the widespread recycling of paper cups.”

Flat white price with a recycled cup: Buy five flat whites with a reusable cup for an overall cost of £13.50 (£2.70 each) to get your sixth free, meaning each one effectively costs £2.16 – a 54p per-cup saving.

Costa recyclable cup discount: 25p

Costa offers a 25p discount on all hot drinks if you provide your own cup. It states: “Through our nationwide in-store recycling scheme we have recovered over 12 million cups for recycling since February 2017 but understand the serious need to ensure better infrastructure is available outside of our stores.

“To encourage our customers to use reusable cups we already offer a 25p discount, which we will be further promoting this year.”

Flat white saving: £2.15 discounted from £2.40.

Department of Coffee and Social Affairs recyclable cup discount: 10%

Department of Coffee is a small chain with shops based in several major UK cities. Typically its prices are higher than those of the big chains as they serve ‘speciality coffee’ – or coffee with a higher quality grade than is typical for bigger competitors.

Flat white price with a recycled cup: £2.84 discounted from £3.15.

Pret a Manger recyclable cup discount: 50p

Pret offers a 50p discount on hot drinks for those who bring in a reusable cup. This came about after Pret’s chief executive, Clive Schlee, tweeted in November 2017: “How do we encourage customers to bring reusable coffee cups to @Pret? We’re thinking of increasing the discount for bringing your own cup from 25p to 50p. Our organic filter coffee would cost just 49p. I’d love to hear your thoughts.” Based on the feedback he got, Pret boosted its discount.

Flat white price with a recycled cup: £1.79 discounted from £2.29.

Starbucks recyclable cup discount: 25p

Way back in 1998 Starbucks introduced a 10p discount for those bring reusable cups, which was raised to 25p in 2008. In 2016 it trialled a 50p discount but a spokesperson for Starbucks says the scheme wasn’t a success: “we found that this did not move the needle in the way we thought it might. We now have 1.8% of our customers using reusable cups.”

However, on the day the Committee announced its proposals, Starbucks revealed it is beginning a trial in 20-25 London cafes where it will charge customers that don’t bring their own cups 5p, while continuing the 25p discount for those who do. The company says it will “investigate the impact of a 5p charge on a paper cup, coupled with prominent marketing of reusable cups, on customer behaviour”.

Flat white price with a recycled cup: £2.40 discounted from £2.65.