Supermarkets can cooperate in Soft Plastics Taskforce after REDcycle pauses recycling program

Major supermarket retailers will form part of a Soft Plastics Taskforce to explore solutions to address the immediate effects of REDcycle suspending its return-to-store soft plastics recovery program, following a conditional ACCC interim authorisation.

Coles, Woolworths and ALDI lodged an urgent application for interim authorisation last week.

"We have moved quickly to approve the interim application as the suspension of the REDcycle program stopped in-store collections of soft plastic, raising community concerns and an urgent need to address the environmental risk of the existing stockpile and future waste," ACCC Deputy Chair Mick Keogh said.

Under the ACCC's conditional interim authorisation, the authorised supermarkets can engage in meetings of the Soft Plastics Taskforce, which will consider, and seek to develop and implement, a short-term solution for the storage, transportation, processing, recycling and/or management of soft plastics.

"The application envisages that a longer-term solution to the issue of recycling soft plastics is needed and that the proposed conduct will not detract from or adversely affect the development of longer-term solutions," Mr Keogh said.

The ACCC may grant an authorisation for any conduct that could otherwise raise concerns under the competition provisions of the Competition and Consumer Act (CCA) when it is satisfied that the likely public benefit from the conduct outweighs any likely public detriment.

"This interim authorisation allows co-operation between the major supermarket retailers for a limited period and for the particular purpose of exploring options for the storage, transport, processing, recycling and management of soft plastics to minimise the volume that may end up in landfill, which is of great benefit to us all," Mr Keogh said.

"The ACCC expects the applicants to resolve this situation urgently and has placed a number of reporting conditions on them to ensure we are informed of their progress. This will aid us in determining our final decision on the application, as well as whether the interim authorisation should be revoked."

"Separate to the application for authorisation, the ACCC is engaging with various industry stakeholders and representative bodies to ensure clarity and transparency in communications so as to minimise the risk of consumers being misled by representations about the recycling of soft plastics," Mr Keogh said.

The interim authorisation will continue until it is revoked, the application for authorisation is withdrawn, or the date the ACCC's final determination comes into effect. A public consultation process will begin shortly.

More information is available on the ACCC's website.

Background

Since 2011, REDcycle has been the only return-to-store, soft plastics recovery program in Australia, facilitating the collection and processing of soft plastics into a variety of durable recycled plastic products. Soft plastics include food packaging, plastic bags, cling wrap and bubble wrap.

REDcycle is an industry-led program developed and implemented by the RED Group, a Melbourne-based consultation and recycling organisation. Product manufacturers and the major supermarkets partner with REDcycle to run the program. REDcycle provides some initial processing and then delivers the materials to its partner recycling facilities to process the soft plastics into new recycled plastic products, or otherwise utilise the recovered materials.

The scheme has been running in nearly 2000 supermarket outlets across the country, with collection points in Coles and Woolworths supermarkets, and more recently since July this year, ALDI.

On 9 November 2022 REDcycle announced that it was suspending its soft plastics collection program as its recycling partners had temporarily stopped accepting and processing soft plastics. The suspension of the REDcycle program has removed the only established and widespread recycling pathway for consumers and has created significant concerns about existing stockpiles and how consumers can recycle soft plastics going forward.

Following REDcycle's announcement, Coles and Woolworths each announced that they would be suspending soft plastics collections from their stores until further notice.

The Participants propose to be part of a taskforce, to be initially chaired by the Department of Climate Change, Energy, the Environment and Water. The Participants anticipate that the Australian Packaging Covenant Organisation and other relevant industry bodies may also provide support to the Soft Plastics Taskforce as required.

Section 91 of the CCA allows the ACCC to grant interim authorisation when it considers it is appropriate. This allows the parties to engage in the proposed conduct while the ACCC is considering the merits of the substantive application.

The ACCC may review a decision on interim authorisation at any time, including in response to feedback raised following interim authorisation.

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