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Plastic Ban: The Impact on the Restaurant and Bar Industry

New Jersey is one of many states banning plastic for single use.

According to NJ.com, there are 34 municipalities and two counties that have banned the use of plastic straws and bags. In addition, there are currently 11 municipalities pending and 16 municipalities considering this ban. The impact will change the way restaurants and bars handle food service, take-out orders and drink service. This new legislation affects single-use plastic including, but not limited to, bags, straws, utensils, containers and more.

The amount of plastic used by consumers versus the amount recycled causes a major concern for the environment. Further, NJ.com conveyed that one person uses 500 single-use disposable bags per year, with less than one percent recycled. Additionally, Americans use approximately 500 million plastic straws daily; which can take up to 200 years to decompose. According to the NJ League of Conservation Voters, New Jersey uses 4.4 billion plastic bags a year. Bags and many different types of single-use plastics are polluting rivers, oceans and streams across the Garden State. NJBIZ recently reported that The New Jersey Food Council urges consumers to switch from plastic to reusable bags. The organization launched its Choose to Reuse campaign at the annual Food Council Committee for Good Government Breakfast in October 2019. The campaign aims to educate and remind consumers about sustainability options at checkout.

What can be done?

Paper straws are an alternative to plastic, but surprisingly, comes with a 400% cost increase compared to the latter. Even though the price of a paper straw is still relatively inexpensive, at approximately two and a half cents, for businesses with a large volume of straws, (i.e. restaurants and bars), costs can add up. An alternative for take-out containers is eco-friendly or foil containers, which also come at an increase in cost of 60%. With new non-plastic alternatives becoming the norm, businesses need to adjust their budgets to account for higher costs. Lastly, marketing your compliance on social media or on different forums allows consumers to be aware of recent changes to your restaurant or business.

For more information or questions on how you should comply, please contact a member of Withum’s Restaurant, Food and Beverage Group.

How does this impact my small business?

As a small business or restaurant, you should expect an increase in costs which can result in an increase in your price point. Some towns have enacted legislation that may include fines for non-compliance. You need to follow and remain up-to-date on these ordinances to be in compliance with your local laws regarding disposable items. If you are already operating in a municipality that has passed or considering this type of ban, restaurants and bars should be discussing options with vendors or suppliers for alternatives.

How can you proactively start to cut back on the use of plastics in your establishment? Try incorporating the following into your daily operations:

  • Ask customers placing a delivery order via phone, or implement a question for online delivery orders, “do you need cutlery?” Statistics show that most single-use cutlery provided with delivery orders are thrown out without being used, so when possible, eliminate providing them. A policy to include cutlery only when requested by a customer is also an alternative. This can be part of your businesses campaign to align with best practices for reducing plastic use.
  • Use biodegradable containers and paper bags for takeout or when packing leftover meals.
  • Provide beverages without straws unless a customer requests them.
  • Replace plastic wrap with reusable plastic or vinyl sheet rack covers for in house operations.
  • Replace plastic coffee stirrers with wooden or bamboo alternatives.
  • Purchase glass or aluminum cans instead of plastic bottles for stocked individual beverages.

Single-use plastic bans are on the rise across NJ and the country. Be proactive and plan from not only a compliance standpoint but from an operational perspective. Operationally, a cost-benefit analysis should be considered in areas that are most heavily affected by this new legislation. The overarching goal is to comply and maximize your profits.

Author: Jordan Ghaffari, CPA | jghaffari@withum.com

Restaurant, Food and Beverage Group

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