M&S dumps free plastic bags

China’s move last month to charge for plastic bags has now been followed by the iconic UK retailer, Marks & Spencer.

Whilst the environmental angle is clearly important, the move also represents a reaction to higher oil prices. Plastic bags are not ‘free’ to retailers, and their cost is now escalating. Restricting this cost, whilst also gaining ‘green’ credentials, is a ‘win-win’ for them. Similarly, its a ‘lose-lose’ for polymer producers. They have to pay the higher feedstock cost, and will now have lower volumes, so unit costs will increase.

Even worse, it probably marks the start of a more general movement to restrict ‘non-essential’ uses of crude oil. Gordon Brown, UK premier, has now said the UK government will force all supermarkets to charge within a year. Other governments will no doubt follow. The benefits of plastics are not well understood by the general public, and represent a soft target. Operating rates for producers and converters will suffer as a result.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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