The UK Packaging and Film Association (PAFA) has warned suppliers ‘not to be surprised’ if plastic prices have risen due to the economic climate and a lack of recycled supply.
The warning follows increases in the key commodity virgin polymer types used in plastic packaging as well as a tightening supply situation in recycled polymers.
The association, which represents more than 80% of UK plastic film, flexible and rigid packaging suppliers, said plastic converters had already experienced increases of 25% and 30% in raw material costs this year.
PAFA warned that it will affect everyone from the supply chain to the consumer.
A spokesman for PAFA told FoodProductionDaily.com the price increase seemed to be a continuing trend.
“As a trade association it is our job to make the buyers of plastic packaging aware that next time they negotiate their contracts to expect a rise in price.
“We are saying don’t be surprised, as producers and converters have no alternative to pass the prices on due to inflation and we are giving an advance flagging up this is the case.”
When asked if there was a concern some of its members could go out of business, the spokesman added: “Some years ago that would have been a concern but during this time of general economic pressure across the industry it is not really a new issue.”
The issue is added to by a very tight supply on recyclate materials as the country drives towards more renewable energy, said the industry body.
The spokesman added: “The decision converters and brand owners have to make is one, on the economic benefits and two, on the environmental benefits including recycling and make a decision on their priorities.”
No quick fix
PAFA CEO, Barry Turner, said the inflationary pressures seem to be here to stay for the considerable future.
“All of this concern is further fuelled by the fact that we have very tight supply on recyclate materials and that the energy prices borne by our members will undoubtedly continue to outpace overall RPI as the country drives towards more renewable energy.
“All this throws in sharp relief the need for UK government to take a hard look at fuel and energy policy as at the moment we seem reconciled to facing high inflationary impacts from these two elements as well as having raw material and recyclate costs increasingly determined by forces outside the EC markets control.
“All these factors combine for the moment to drive an upward trend in costs for converters which will inevitably have to be passed through to customers”.