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Plastic Packaging Creates Concern Among Consumers

01/03/2019

In 2018, China ceased importing low-grade and single-use plastic used to package foods. This has created a break in the chain of production and disposal of plastic packaging since China was previously the end-point for 45 percent of plastic discarded by consumers. It is estimated that global production of raw plastic now exceeds 400 million tons annually with only a small fraction being recycled.

Activist investors including Aviva, Hermes and Third Point are pressuring food companies in which they hold equity to substitute alternatives to single-use plastic.

The December 31st edition of The Wall Street Journal highlights the dilemma of manufacturers of foods and consumer products including Unilever, Nestle and Proctor and Gamble. Many companies have made commitments to displace single-use plastic. Coca Cola intends converting to recyclable containers by 2025 with similar intentions by Unilever and Nestle.

At the present time, margins are impacted by higher fees for disposal of waste plastic. A possible solution lies in recycling applying innovative technology. Manufacturers of paper and fiber packaging have experienced an upsurge in demand as alternatives to plastic are introduced.