PAFA, the UK plastics film and flexible packaging industry trade association, has issued a price warning following increases of up to 50% in low and high point price differentials over the last 12 months for principal packaging polymers such as LDPE, LLDPE and PET.
It says these increases are a direct result of global economic factors including oil price rises and have severely eroded margins for plastics packaging producers.
CEO designate of PAFA Barry Turner explains: “Our member companies supply the bulk of UK flexible packaging to the retail sector and other users and have already absorbed significant cost increases, but this cannot continue. In 2009, for example, we saw a 50.33% cost increase in LDPE with a consequent burden on our members which has now become intolerable.
“Regrettably, our customers will see significant price increases being passed through to them with immediate effect.”
The situation is further exacerbated by additional transport and allied materials costs – all of which have left the Industry with no option but to pass the increases through the supply chain. Mr Turner says that if the industry is to maintain a strong and innovative supporting role to its UK customers, it has to be realistic about prices.
“We are recognised and respected for our continuous innovation in providing packaging solutions which in turn contribute to high levels of resource efficiency and wastage reduction in retailing. But we also have to ensure that our prices properly reflect the current global economy and its impacts on operating and supply chain costs.”
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