Plastic bag charge redraws retail profits, raises policy issues
The charge for plastic shopping bags at major supermarkets, introduced as an environmental measure, is prompting growing public scrutiny over who ultimately benefits from the policy.
Since November 1, 2025, Sri Lanka’s leading retail chains have been required, under Extraordinary Gazette Notification No. 2456/41, to end the free distribution of plastic shopping bags and instead charge Rs. 3 for medium and Rs. 5 for large Linear Low-Density Polyethylene (LDPE) and Low-Density Polyethylene( LLDPE) bags.
These are the most commonly used ‘sili sili’ bags made with lightweight plastics in supermarket packaging due to their flexibility, strength and low production cost and it’s prices itemised on customer bills.
Several consumers say the change has been felt primarily “as an added line on the bill”, while retail analysts in the fast-moving consumer goods (FMCG) trade note that the policy has altered retail billing practices more visibly than shopping behaviour.
Several consumers interviewed said the policy has been felt most immediately “as an added line on the bill rather than a change in shopping habits’.
Retail analysts in the fast-moving consumer goods (FMCG) trade note that while the environmental objective is clear, the commercial outcome has been more visible.
“The rule has converted a routine operating cost into a recoverable charge,” one analyst said, adding that the impact on plastic consumption will need time and data to assess.
The notification, enforced by the Consumer Affairs Authority (CAA) in coordination with the Central Environmental Authority (CEA), does not impose a tax or a ban on plastic bags.
Instead, it prohibits free distribution at organised retail outlets and mandates transparency in pricing.
According to a senior Finance Ministry official, the measure was designed “as a behavioural nudge, not a revenue instrument”, but acknowledged that “the absence of an earmarking mechanism means proceeds remain within the retail system”.
Major supermarket chains including Cargills Food City, Keells, Laugfs, SPAR and Glomark have publicly endorsed the environmental rationale, urging customers to bring reusable bags.
Supermarket industry sources confirmed that the Rs. 3–5 charge is now a standard billable item and stressed that pricing is disclosed as required by law.
While daily transaction data are not publicly released, industry estimates provide a cautious sense of scale. Sri Lanka’s organised supermarkets of around 800 outlets nationwide serve close to one million customers daily, particularly during peak periods.
If about half purchase a single bag at a mixed average of Rs. 4, daily collections would be Rs. 2 million, accumulating to around Rs. 60 million per month across the sector. These are indicative estimates, but analysts agree the sums are material.
“No one disputes the environmental intent,” Environment Minister Dhammika Patabendi said in a recent statement, “but enforcement and consumer protection must be strengthened to ensure the spirit of the policy is honoured”.
The CAA, for its part, emphasises enforcement over revenue. “The gazette is clear: the charge must be transparent and displayed. It is not a tax; it is a regulatory mechanism to discourage single-use plastics,” said Acting CAA Director Samanthi Karunaratne, noting that inspections are ongoing.
Environmental advocates argue that gaps remain. Thicker plastic and “compostable” bags continue to be sold, and there is no provision to channel proceeds into waste management or recycling.
“Without reinvestment, the policy risks weaken public trust,” said Nishshanka De Silva, founder of the ZeroPlastic Movement.
The policy’s rollout coincided with the year-end festive season, when supermarket footfall typically rises through Christmas and New Year.
Retail analysts say elevated volumes throughout December and into early January are likely to push bag-charge collections to seasonal highs, further increasing gross inflows during the period of peak consumer spending.
As the regulation settles into routine practice, observers say its long-term credibility will depend on measurable reductions in plastic use and clearer accountability over where consumer-paid charges ultimately lead testing whether the policy best serves the planet, the public, or the balance sheet.
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