Coca-Cola may package more drinks in plastic as a result of President Donald Trump’s new tariff on aluminum, the company’s CEO said.
Asked during a Tuesday earnings call about the impact of Trump’s 25 percent import tax on aluminum entering the country, James Quincey said that when it comes to “ensuring affordability and ensuring consumer demand,” Coca-Cola has other package offerings “that will allow us to compete in the affordability space.”
“For example, if aluminum cans become more expensive, we can put more emphasis on PET bottles,” Quincey said, referring to polyethylene terephthalate, the plastic commonly used in single-use plastic bottles and food packaging.
Coca-Cola accounted for 11 percent of branded plastic pollution in the world, according to a study published in April, and is one of the world’s top contributors to plastic pollution.
In December, the company abandoned its plastic reduction and reuse goals, announcing that it had revised its climate goals to focus more heavily on the use of recycled materials instead of reducing virgin and single-use plastic – a move criticized not just for the potential impact on the environment and oceans bogged down by plastic pollution, but also for global health as more research emerges on the effects of microplastics on the human body.
“Any increase in Coca-Cola’s plastic bottle use will directly harm the environment – as well as the health of their customers,” said Emma Priestland, the global corporate campaigns coordinator for the advocacy group Break Free From Plastic, in an emailed statement.
Studies have linked microplastics to colon cancer, lung cancer and some reproductive problems, as well as to increased risk of heart attack or stroke. Scientists have found microplastics and nanoplastics in the liver, placenta, blood, testicles and even the brain.
Priestland said if the company was concerned about offsetting the cost of the aluminum tariff, executives should look toward investing more in reusable glass bottles instead of plastic.
“Coca-Cola operates successful reusable packaging systems around the world – this is what they should be doubling down on, not expanding plastic use,” she said.
Trump’s executive orders, signed on Monday, impose 25 percent tariffs on imported steel and aluminum in an attempt to promote greater domestic steel industry production and employment.
He imposed similar import taxes on steel and aluminum during his first term, but later amended them to permit continuing shipments from major U.S. allies such as Canada and Mexico and imposed quotas on some other countries. Announcing the new steel and aluminum tariffs on Tuesday, Trump said they would be enforced “without exceptions or exemptions.”
Though experts warn that both consumers and U.S. manufacturers will likely bear the impact of the steel tariffs – a 2018 analysis of steel tariffs during Trump’s first term, published by the nonpartisan Peterson Institute for International Economics, found that while it created jobs, it also hurt a variety of U.S. buyers – Quincey sought to assuage investors on Tuesday on the overall impact it will have on Coca-Cola’s bottom line.
An 25 percent increase in price is “not insignificant, but it’s not going to radically change a multibillion-dollar U.S. business,” he said.
“Between mitigation of supply chain, sourcing, weights of the cans, price increase of the cans at some level potentially, a switch to PET, it’s a manageable problem in the context of the total U.S. business,” he said. “It’s a cost. It will have to be managed.”