Pafa has warned of a growing inflationary pressure on converted plastic packs in the retail supply chain
The warning follows increases of all the key commodity virgin polymer types used in plastic packaging as well as a tightening supply situation in recycled polymers which are increasingly used in plastic packaging.
The trade association, whose members represent more than 80% of the UK industry, said that most plastic converters have already experienced increases of between 25% and 30% in their raw material costs this year and this trend appears to be continuing.
It added that fuel costs have also hit the level previously forecast as a peak that was to be realised in October this year.
‘Inflationary pressures here to stay’
Pafa chief executive Barry Turner said: “For the moment these inflationary pressures seem to be here to stay. It is also alarming to see that diesel prices have powered through the peak reached last May. This means the UK now has the second highest diesel price in Europe – second only to Norway.
“More needs to be done to reposition our fuel tax system in the UK. 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.”
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