SABMiller Position Paper - Packaging and Packaging Waste Working towards vibrant packaging reuse and recycling economies

1. The issues
Packaging plays a vital role in delivering products to our consumers in a manner that preserves the integrity of the product and protects the health and safety of the consumers who drink our beverages. At the same time however, the awareness around the environmental impacts of packaging have increased considerably over the past decade for a number of reasons. From the consumer/community perspective, litter from packaging is very visible and is, in effect, branded litter. Governments have also been active in regulating packaging and packaging waste due to the amount of packaging waste that needs to be dealt with on an annual basis and also in response to consumer concerns. The EU Packaging and Packaging Waste Directive is perhaps the most vivid example of this and other countries are adopting similar measures. This is not only restricted to developed countries, but increasingly developing nations as well. Over the past few years the costs of raw materials have escalated significantly, which has had a direct impact on the costs of packaging, motivating more efficient and sustainable packaging management. The carbon footprint of packaging manufacturers can be high. An analysis of the value chain carbon footprint of our Peroni brand for example showed that as much as 44% of the footprint is attributable to packaging manufacture. These manufacturers, many based in Europe and the United States, will be impacted by carbon cap and trading schemes, the costs of which will likely be passed on. Major retailers are responding to the pressures above by imposing requirements on suppliers in terms of the packaging products are supplied in. Wal-Mart, for example, has established a comprehensive packaging score-card on which suppliers are evaluated. In line with this there is an increasing expectation being placed on companies today, including SABMiller, to take appropriate preventative action in both their pre-consumer and post consumer packaging value chains. In the case of the former, there is an expectation to ensure that packaging being sent out into the market place has been optimised at its design phase, for recycling/reuse and to have the lowest possible environmental impact in the event that it is sent to landfi ll. Equally as important, on the post-consumer side, is the need to contribute where appropriate to the establishment of vibrant packaging reuse and recycling markets to ensure our post-consumer packaging waste can be brought back into the system eliminating the need to send it to landfill sites and reducing the litter burden that is evident in a number of cities globally.

SABMiller Position Paper - Packaging and Packaging Waste

March 2009

2. SABMillers response and commitments

SABMiller response and commitment are guided by a number of factors including: our commitment to the principles of reduce, reuse and recycle in the design, selection, and specification; meeting consumer needs; ensuring our packaging is fit for purpose; and taking a holistic life cycle approach to the impacts of our packaging substrates on the environment. In order to effect sustainable packaging management, SABMiller seeks to:

Adopt a holistic approach to sustainable packaging management - using cradle to cradle environmental assessments as part of new packaging developments and upgrades - in particular consider the carbon footprint of each packaging substrate and aim to protect low carbon
packaging routes such as returnable bottles, whilst encouraging new low carbon materials

Consider the potential for packaging light weighting and/or elimination: - where feasible, and environmentally beneficial, design towards lightweight packaging in line with industry
best in class standards

- reduce the amount of secondary and tertiary packaging used Increase usage of recycled content / sustainable sourced virgin materials: - increase the use of post consumer recycled content in packaging substrates as a main priority and
industrial recycled content

- increase the use of sustainably sourced virgin materials, such as pulp and paperboard Optimise packaging for recycling and/or reuse: - move towards designing pre-consumer packaging that aids optimal recycling and/or reuse of the respective
substrates after use

- inclusion of appropriate instructive labelling on products Actively explore and implement less environmentally damaging packaging materials: - ensure the heavy metal content of all packaging substrates is below 100ppm, with the long term goal of
completely eliminating heavy metals

- consider new biodegradable or lower impact options for each aspect of our packaging Take into account post consumer packaging waste - where available obtain consumer data on primary packaging to determine the effectiveness on post
consumer waste recovery and recycling

- where consumer data is not available, consider bespoke projects in given markets - through CSI initiatives, work with community organisations - in selected areas - to introduce/improve

recycling facilities available to the community while at the same time harnessing potential job creation

This Position Paper represents aspirations rather than binding commitments as the contents are forward looking and involve certain risks and uncertainties which are difficult to predict.

SABMiller Position Paper - Packaging and Packaging Waste

March 2009