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DIY giant Bunnings is charging 10c for its plastic bags, saying the move is intended to protect the environment.
The chain, which has the motto "Lowest prices are just the beginning", says proceeds from the charge - which it calls a levy - will go to Keep New Zealand Beautiful.
And it says it aims to be plastic-bag free by the end of the year.
Bunnings said that in the last financial year its stores used 3.5 million bags.
"By implementing the levy and phasing out the use of plastic bags in our stores we can prevent millions of bags ending up in landfill or as litter on our beaches, streets and parks," general manager Brad Cranston said.
Bunnings is trumpeting the move as the first of its kind in New Zealand, but it is common in Australia.
The company introduced the 10c charge in Australia in 2003 and says its stores there have reduced plastic bag use by 99 per cent.
Other Australian retail chains such as Nandos, Accessorize, Country Road and Lush cosmetics have done away with the bags.
Many New Zealand shops have alternatives to plastic bags but Bunnings said it would be the first to phase them out completely.
Mr Cranston said public response had been overwhelmingly positive.
"We have had strong public support for the move and hope that our lead on this environmental issue will encourage other retailers to do more."
Keep New Zealand Beautiful chairman Roger McClay said the move "set a great example for other companies and individuals".
In late 2005, Bunnings introduced reusable bags, and says it has sold about 7000 in the past year. It also provides recycled cardboard boxes as an alternative to plastic bags.
Progressive Enterprises, which runs Foodtown, Woolworths and Countdown, is trying to curb the use of plastic bags. New Zealanders use about a billion of them a year.
Progressive Enterprises said the company's goal was to reduce plastic bag use by 20 per cent.
The New Zealand Packaging Accord is working with industry and central and local government to reduce packaging in landfills.
Packaging Accord signatories took 12 million bags out of circulation last year and aims to take another 130 million out in the next two years.
By last October, plastic bag volume had been reduced 2 per cent by volume and 8 per cent by weight.
