Industry

Wilko donates bag charge profit to WRAP

Wilko donates bag charge profit to WRAPThe Waste & Resources Action Programme (WRAP) has been named as one of four beneficiaries of household goods retailer Wilko’s carrier bag charge profits.

The charge, introduced in England yesterday (5 October), requires retailers with over 250 employees to charge at least five pence for every carrier bag under 70 microns thick.

Retailers will pay 0.83 pence for every bag to the treasury as VAT and will then be allowed to deduct ‘reasonable costs’ to cover administration of the system. They are then encouraged to donate the remainder to good causes, though they are under no obligation to do so.

The government has estimated that the charge will raise around £730 million for good causes over the next 10 years.

Earlier today (6 October), Wilko announced that a fifth of its proceeds from the charge will go to WRAP, with the remainder being split between redistribution charity In Kind Direct, the Woodland Trust, The Prince’s Trust and a regional charity of each store’s choice.

Commenting on the announcement, WRAP CEO Liz Goodwin said: “Securing this generous new stream of funding from Wilko will be a tremendous help towards furthering WRAP’s charitable aims, helping to find new ways to move towards a more sustainable, resource efficient world.

“WRAP has an ambitious five-year plan that will help the transition towards a world where resources are used sustainably, and this development will really help maximise our impact.”

Retailers announce beneficiaries of funds

All retailers must report their carrier bag sales to the Department for Environment, Food & Rural Affairs (Defra) by 31 May every year. These and the destination of the funds will then be published publically.

Local authority inspectors will check that retailers are complying with the law and not abusing the freedom to deduct administration costs.

Other large retailers have also announced where they will be sending their proceeds from the charge.

Tesco will focus funding on local environmental projects like new ‘pocket parks, sports facilities, woodland walks and community gardens’. The Tesco funding will be administered by environmental charity Groundwork.

Asda, Iceland, Morrisons and Waitrose have all committed to help fund the construction of a new ‘world class’ dementia research centre at University College London.

The £350-million project currently has a funding shortfall of £100 million. These four estimate that they will raise up to £20 million in a year through the charge and and their heads have written a joint letter to other major retailers asking them to join the partnership.

Iceland will donate all proceeds from bag sales to the project for at least two years, while Waitrose has committed a year’s worth of funding.

Waitrose is also establishing a ‘Community and Environment Fund’, which will distribute future proceeds to local causes. The retailer has pledged to make no deduction for administrative costs.

In addition to the dementia project, Morrisons will be splitting funds between its newly-established Morrisons Foundation, which provides grants to local and national charities, and its national charity partner Sue Ryder.

Sainsbury’s has announced that each store’s profits from the fund will be donated to local charities, while Marks & Spencer will share proceeds between local charities and a selection of national groups.

Read more about the English carrier bag charge.

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