August 1, 2018 / 3:49 AM / 4 months ago

"Bag rage" prompts backdown on plastic bag levy in Australia

SYDNEY (Reuters) - Australia’s second-largest supermarket, Coles, on Wednesday halted plans to charge shoppers for plastic bags, succumbing to customer fury about a shift away from single-use plastics.

A man carries a Coles supermarket plastic bag as he walks along rocks at Dee Why Beach, located in the northern beaches suburbs of Sydney, Australia, July 31, 2018. REUTERS/David Gray

Coles, owned by Wesfarmers, and its larger rival Woolworths Group Ltd removed one-use plastic bags from stores late in June as part of a national push to reduce waste, selling reusable ones for a small fee instead.

It drew a furious response, dubbed “bag rage,” as customers angry about having to bring their own sacks or pay 15 Australian cents (11 U.S. cents) for a reusable plastic bag abused checkout staff and vented on social media.

The union representing store workers launched a public campaign on the issue and both grocers capitulated, temporarily waiving the fee.

Coles, which had initially planned to reintroduce the fee on July 12, never levied it and has now extended the waiver indefinitely.

“Some customers told us they needed more time to make the transition to reusable bags,” the company said in a statement.

“Many customers bringing bags from home are still finding themselves short a bag or two so we are offering complimentary reusable (bags) to help them complete their shopping,” it said.

The waiver was “still intended to be an interim measure,” Coles said, but gave no date for the resumption of the fee, saying only it will “assess when customers have become accustomed to bringing their own bags.”

Woolworths has levied 15c per bag since July 8.

The backflip comes while Coles is under immense pressure to lure customers, as its sales growth lags Woolworths just as Wesfarmers prepares to spin it out and list it separately.

“It’s all a part of lifting their customer satisfaction and getting more customers in the door,” said James Tao, a market analyst at stockbroker Commonwealth Securities in Sydney.

The cost of the move would probably have a negligible financial impact, he added. “It’s more about the PR side.”

However that also appeared to backfire as Coles was lampooned online.

“Coles’ colossal plastic bag fail” and “Coles caves” ran headlines on Australia’s main news sites.

Major retailers in all but two Australian states face fines if they supply single-use plastic bags.

The U.N. wants to eliminate single-use plastic by 2022 and says more than 60 countries have so far taken steps to ban or reduce plastic consumption.

Reporting by Tom Westbrook; Editing by Michael Perry

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