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Food and drink sectors among top spenders on environment

By Ahmed ElAmin , 11-Jul-2006

The UK's food, beverage and tobacco producers spent the mostcompared to other industries on meeting environmental protection requirements,according to new statistics released by the government.

Altogether the three industry sectors spent a collective£581m on environmental protection equipment and services in 2004, according tostatistics released last week by the Department of Environment, Food and RuralAffairs (Defra).

The report provides an insight into how the industry isreacting to the increasing amount of environmental protection laws, whicheffect operations ranging from waste disposal, to CO2 emissions and packagingchoice.

Defra groups the tobacco sector with the food and beveragesector in the statistics and does not provide a separate breakdown. There were 6,287 food, beverage and tobacco companies included in the survey.

Gross spending on environmental protection in 2004 by all ofUK industry amounted to an estimated £3.2bn, the figures show.

Food, beverages and tobacco manufacturers accounted for 18per cent of the total spend. They were followed by chemicals and chemicalproducts manufacturers, who accounted for 17 per cent of the total spend. Coke,petroleum and nuclear fuel manufacturers accounted for 12 per cent of the totalspend.

Of the £581m spent by the food, beverage and tobacco sectors in 2004, about £293.9m was spent on wastewater management. Another £160.9 was spent on enviromental protection measures dealing with solids and £64.3m went to air emmission spending.

A total of £17.2m was spent on soil and groundwater management, £6.2m on noise measures, £4.3m on nature protection. A total of £28m went to unclassified environmental protection measures.

Environmental protection spending by food, beverage andtobacco manufacturers amounted to an average of 0.1 per cent of total turnover,or about £1,274 per employee.

By comparison, the coke, petroleum and nuclear fuel production sector spent £14,900 per employee, the highest among all sectors.

In previous years food, beverages and tobacco companiesaccounted for between 12 per cent to 19 per cent of the total environmentalprotection spending in the UK, followed by the power industries, whose spendranged between 11 per cent and 17 per cent of the total.

On average about 81 per cent of the spend on environmentalprotection in 2004 was accounted for as operating expenditure. Capital expenditure make up the remainder.

On average 34 per cent of the total expenditure was spent onwastewater management, with a further 29 per cent spent on solid waste. Theremaining 37 per cent was spent on air, soil and groundwater management, andother areas.

The highest areas of capital expenditure were broadly thesame between 2000 and 2004, Defra noted.

The expenditure on improving air emissions has dominated thespending in previous years, whereas in 2004 wastewater was the highest spendingarea.

The large differences between years in the proportions ofcapital expenditure recorded in the survey is in part attributable to changesin the ways the survey questions have been asked in different years, Defranoted.

The continuing increase of capital expenditure on water islikely to be driven by legislation, primarily IPPC regulations, which imposeincreasingly stringent environmental standards for water and wastewatertreatment.

"The industry is aware of the need to reduce costs byinvesting in improvements and efficiencies in water management," Defrastated.

The total spending by all industries was offset by anestimated income of £108m from the sale of by-products. Defra estimatescompanies gained £171m in cost savings from environmental protection measuresundertaken during 2004.

In a survey, 21 per cent of companies separately identifyenvironmental protection expenditure in their management accounting system. Theuse of environmental reporting systems is more widespread amongst companieswith over 250 employees, Defra said.

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