Dairy industry snubs rHDPE talks
Members of the dairy industry did not turn up to a WRAP-brokered meeting that aimed to support the plastic reprocessing industry this week, claiming that competition law prevented their attendance.
Several UK dairies, including Dairy Crest, were invited to attend talks held by the Waste & Resources Action Programme (WRAP) this week to discuss the potential of them switching back to using recycled plastic packaging in their packaging.
UK dairies have increasingly switched from using recycled plastic (rHDPE) in their bottles to virgin plastic (despite a commitment to achieve 30 per cent recycled material in HDPE milk bottles by 2015, under the Dairy Roadmap). This is largely due to the current price of oil, which has dropped to under US$60 (£40) a barrel for the first time in five years, thus making the price of virgin plastic marginally cheaper than rHDPE.
As a result of this, and ‘operational challenges and unfavourable market conditions’, one plastic reprocessor, ECO Plastics – now known as ECOPlastics Recycling – sought acquisition last year following financial difficulties, and another plastic reprocessor, Closed Loop Recycling, said it would ‘inevitably go into administration’ without government or industry support. It added that the price of rHDPE is 0.1p more expensive than virgin plastic – a price which 68 per cent of people said they would be wiling to pay if it supported the recycling industry.
To try and ‘save’ the UK’s plastic reprocessing industry, WRAP has been hosting a series of talks with the dairy and retail industries to ‘see how we can help keep the UK recycling’ and ensure that the plastic reprocessing industry in the UK will make it through these challenging circumstances.
However, Resource received confirmation today (17 April) from Dairy Crest that the dairy industry did not attend this latest meeting.
Meeting would have 'exposed dairy companies to competition law issues'
Dr Judith Bryans, Chief Executive of Dairy UK, the trade association for the British dairy supply chain (which was not invited to the event in question), commented: “It would not have been possible for dairy companies to attend Wednesday’s WRAP meeting without being exposed to competition law issues. We understand the agenda could have led to discussions on price and business plans and the industry simply cannot discuss these things collectively under competition law.
"Dairy companies are seeking to address the current issue through bilateral discussions with their suppliers and they are working hard to achieve their Dairy Roadmap targets. The dairy industry is one of several industries in the UK that use recycled plastic and is keenly aware of the current challenges.
"However, while we remain committed to meeting our targets and strongly urge all other sectors to make every effort to meet their own targets, all companies working in a commodity-based market must also look to their business model to avoid similar issues in the future.”
It is not yet known how this failure to secure a commitment from the dairy industry to switch back to rHDPE will affect Closed Loop Recycling, but its Chief Executive Chris Dow told Resource this afternoon that despite this latest turn of events, the company “remains confident that the retailers will confirm with the dairy supply chain their specification for the use of 30 per cent recycled content as agreed under the Dairy Roadmap”.
‘We need the whole supply chain to come together’
WRAP has declined to issue a comment to confirm or deny who attended its latest meeting, due to the information being ‘commercially sensitive’.
However, Dr Liz Goodwin, CEO of WRAP, has previously stated: “The contribution that a thriving and vibrant plastics recycling industry can make to both overall resource efficiency within the UK and the economy in general is considerable.
“Right now, buying virgin HDPE for milk bottles might seem the better buy, but it is not a long-term approach. Commodity prices go up and down. Recycled food-grade HDPE will be a good buy again… but if we don’t stick with it now, there won’t be any to buy in the UK and that would be a real loss for us all.
“To make this happen, we need the whole supply chain to come together, to look at where the risks lie and to look at how best to share those risks so all can benefit. Industry might need to pay a premium for high-quality food-grade recycled plastics so that it can honour the important commitments it has made. However, in the context of falling plastic prices overall, this should be affordable.”
Dairy industry absence 'hugely disappointing'
Speaking to Resource today, David Powell, Senior Campaigner on Economics and Resources at environmental campaigning body Friends of the Earth, said: "Friends of the Earth has always thought that voluntary agreements are potentially a very dangerous and false solution to massive problems like building a circular eocnomy and helping save jobs - the reason being that they seem like a good idea when times are good, but as soon as times are bad, they stop being quite so useful. The entire purpose of the Dairy Roadmap and what that was trying to do, was to ensure that through good times and bad there would be support for new industries, like Closed Loop Recycling.
"It's hugely dissappointing that the dairy industry, which has the highest stake in keeping places like Closed Loop open, didn't attend what seems like a pretty pivotal meeting. For the people of Closed Loop, this is disappointing, but also for the future of the reprocessing industry, it's very worrying."
He added that central government should be requiring companies to buy recycled plastic, rather than leaving it to voluntary agreements, to avoid "this current situation where the whole thing is crumbling".
Find out more about the problems facing the recycled plastic industry in the UK.