Packaging company boss blames bag levy for administration

By Sarah Cosgrove, Thursday 03 March 2016

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A Lancashire bag manufacturer has gone into administration blaming the introduction of the plastic bag levy in England last year.


40 redundancies at Nelson Packaging. Image: Google Maps

Administrators Leonard Curtis Business Rescue and Recovery were appointed to Nelson Packaging last Wednesday and 40 workers were made redundant.

Managing director of the packaging firm Michael Flynn said the administration was primarily a result "of the English bag legislation and the corresponding impact on customer and retailer demand for plastic carrier bags".

“Added to aggressive overseas competition this ultimately proved too devastating for the ongoing viability of the business, despite the continued efforts of the loyal workforce.”

However one worker told BBC Radio Lancashire they believed the legislation had a "slight but not a massive impact" on the business, which marked 40 years trading last year and was acquired by Cheshire-based packaging firm Intelipac in 2013.

England was the last country in the UK to introduce a levy on plastic bags, on 5 October last year. It requires retailers with more than 250 staff to charge shoppers 5p for each ‘single-use’ plastic carrier bag thinner than 70 microns.

Similar laws in Wales, Northern Ireland and Scotland were already in place and had a marked effect. Residents of Wales reduced plastic bag use by 71% when a 5p fee was introduced in 2011 to 2015, for example.

Campaigners argue that plastic bags blight streets, spoil the countryside and damage wildlife, seas and coastlines.

Not all businesses have suffered from the bag charge, which does not apply to paper bags in England. Papermaker Arjowiggins Graphic saw a three-fold rise in enquiries about paper suitable for making paper bags in the run-up to the introduction of the charge. 

Lucy Larkman of Nottingham bag manufacturer and printer Burgass, said she thought it was too early to say what effect the levy would have but that diversification into paper bags had been good for her company.

"It’s a quiet time of year for the industry in general but our turnover is comparable with last year," she said. 

Leonard Curtis was not available for comment at the time of writing.

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