Implementation in Sejong and Jeju Areas from December 2
Excluding 25 Starbucks Stores in Jeju
Concerns Raised Over Reduced Effectiveness of Cross-Return Ban
Goal to Install 50 Unmanned Return Machines in Both Areas
Minister Han Hwa-jin of the Ministry of Environment visited a cafe in Jeju City last September that uses reusable cups, where she drank a beverage using a reusable cup and experienced the cup return process. (Photo by Ministry of Environment)
With the implementation of the disposable cup deposit system (December 2) just over a month away, the government has limited the implementation areas to Sejong and Jeju, resulting in a participation rate of only around 1%. In particular, selecting target stores mainly among large franchise outlets has raised concerns about fairness among business operators.
According to the Ministry of Environment on the 27th, as of this month, the disposable cup deposit system applies to a total of 51 brands and 626 stores in Sejong and Jeju regions. There are 191 stores in Sejong and 435 stores in Jeju. Compared to the initially targeted nationwide implementation of about 38,000 stores, the actual applied stores account for only about 1.6%.
The disposable cup deposit system is a scheme that assigns a 300 KRW deposit to disposable cups used for takeout sales at coffee shops, fast food outlets, etc. Consumers pay an additional deposit when ordering disposable cups and receive a refund upon return. The applicable targets are coffee, beverage, bakery, and fast food businesses with 100 or more stores nationwide as of the end of 2020.
With the deposit system applied to only about 1% of stores, there are criticisms that it is a half-hearted policy. Combining the two regions, Paris Baguette operated by SPC Group has 69 stores, Mom's Touch and Mega Coffee have 38 stores, Paik's Coffee and Ediya Coffee have 37 stores, Tous Les Jours has 34 stores, and Twosome Place has 33 stores, which is only about 1-3% of their total brand-owned stores.
Starbucks, the top coffee sales company in Korea, has 12 stores implementing the system, as all 25 stores in Jeju have stopped using disposable cups and are thus excluded from this system. According to the Jeju Environmental Movement Federation, out of a total of 3,331 beverage specialty stores in Jeju, only 404 stores operated by 48 franchise companies are subject to the deposit system, accounting for just 12%.
There are concerns that the prohibition of cross-brand disposable cup returns will reduce effectiveness. Deposit refunds are only possible at Sejong and Jeju stores for disposable cups with deposit labels purchased from the same brand. Refunds are not possible at other brand stores or in other regions such as Seoul, even if it is the same brand.
Government support budgets are also expected to be drastically reduced. The initial budget for the disposable cup deposit system, aimed at nationwide implementation, was about 10.2 billion KRW. This included 8.75 billion KRW for unmanned return machines and 1.44 billion KRW for carbon neutrality practice points. However, limiting the system to two regions is expected to reduce the budget for unmanned return machines to around 1 billion KRW. The average purchase cost of an unmanned return machine is about 30 million KRW, and the government plans to install a total of 50 machines in Sejong and Jeju, along with 15 'return collection centers' for face-to-face returns in Sejong, but it is uncertain whether the reduced budget will meet these targets.
Franchise business operators of brands subject to the system also face burdens. They need to prepay a large sum to the refund agency, the Resource Circulation Deposit Management Center (COSMO) under the Ministry of Environment, to cover costs such as disposable cup collection label fees and collection processing costs.
An official from the Ministry of Environment said, "We will strengthen support to minimize consumer inconvenience, such as applying carbon neutrality practice points in real time when using reusable cups instead of disposable cups."
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