Metro plastic bags to cost 67% more in China

04 August 2008 10:16  [Source: ICIS news]

SHANGHAI (ICIS news)--Major international retail chain Metro Group has increased the prices of its plastic shopping bags in China by 67-100% since 3 August to meet rising costs of feedstock polyethylene (PE), a source from the company’s Beijing office said on Monday.

Metro had previously charged customers yuan (CNY) 0.3 for a medium-sized plastic bag and CNY 0.5 for a large one and after the new rates come into effect, medium and large-sized bags would be priced at around CNY0.5 and CNY1 respectively, the source said.

The cost of PE for plastic bag production had increased by 53% to above CNY 13,800/tonne ($2,017/tonne) from CNY 9,000/tonne two months ago, a bag supplier in Xiongxian city, Hebei province said.

"In striking a balance between the high costs and decreasing consumption of the bags, there is little we can do other than increase prices. We have discussed with our supplier for a long term agreement since we received the notice on the increase in prices from the supplier two months ago," added the source.

The consumption of plastic shopping bags had dropped substantially in June and July across Metro department stores in China, with consumption of large-sized bags falling by 25% during April-May, or a drop of 30% year on year.

Managers of some supermarkets said that they may be forced to raise prices of plastic bags if PE prices continued to rise.

($1=CNY6.84)

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By: Dolly Wu
+65 6780 4359



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