Leading supermarkets and dairy companies have been accused of abandoning plastic recyclers struggling to cope with the impact of lower oil prices.
It is claimed they are either switching from packaging with recycled content or refusing to pay more for it.
Several major retailers and manufacturers with household names have signed up under the voluntary Dairy Roadmap to use 30% of recycled materials in their products, including milk bottles. It also expects a 50% target by 2020.
But lower oil prices have resulted in a substantial fall in prices for virgin HDPE. Recycled HDPE is typically set at 90% of virgin prices or above, so reprocessors have been taking a substantial cut in the price for their recycled products, without being able to reduce their own costs, and face siginficant losses.
It is estimated that a contribution of 0.1p for each two-pint plastic bottle would bridge the gap for reprocessors.
Following a meeting of stakeholders called by Defra last week to consider the parlous state of the market, there have been claims that supermarkets and dairy companies have refused to help out in this way.
Julian Kirby, resources campaigner at Friends of the Earth, said: “Supermarkets and dairy companies were full throttle in claiming praise for signing up to the voluntary agreements for using recycled plastics in their products. Now it has come to market failure, when they have to invest a bit of effort, we need to see them honouring their side of the bargain.
“If you strike a deal to support the growth of recycling, it has to stand fair weather and foul. Now we are foul because of the price of oil, and it is unacceptable that the supermarkets and dairy companies are pocketing the profits.”
Two companies are particularly affected, Biffa Polymers (above) and Closed Loop Recycling. Chris Hanlon, commercial manager at Biffa Polymers, told MRW on 25 March that business was “incredibly challenging”. But he praised the bottle blowers in the supply chain for helping to cushion the blow: “They are taking a hit and are working with us as we see this being a blip.”
Closed Loop chief executive Chris Dow also praised the blowers, which include Nampak: “Their commitment has been superb.”
But Kirby says that if the voluntary agreement does not hold, the Government must step in.
“The UK’s fragile recycling industry is paying the price for successive Governments’ fixation with market solutions and voluntary agreements to the exclusion of necessary Government intervention – even when companies are calling for it.
“With increasingly volatile commodity prices and growing international competition for raw materials, all parties must agree to a review of the UK’s resource efficiency policies – or face putting yet more jobs and our economic security at risk.”
Andrew Opie, director of food and sustainability at the British Retail Consortium, said: “We are aware of difficulties in the plastics recycling industry and are supportive of the principles of recycled content in packaging and products.
“Our members are signed up to a number of commitments in this area and will continue to work towards them, but recognise that this is a difficult market and greater attention needs to be paid to the long term sustainability of the UK recycling industry.”