The unexpected and immediate pause of the popular ‘REDcycle’ soft plastics recycling program on 9 November 2022 has left many businesses wondering what to do about the recycling labelling on their packaging, which now contains inaccurate and arguably false information.
What is REDCycle?
The REDcycle Program was first implemented and developed in 2011 by Melbourne-based recycling organisation RED Group (RED) as a way for post-consumer soft plastics to be kept out of landfill.
The Program allowed consumers to return flexible or ‘soft’ plastics to Coles and Woolworths for it to be collected and initially processed at RED’s facility, before being sent to RED’s Australian manufacturing partners to transform into various recycled plastic products including Polyrok concrete, Coles shopping trolleys, or even furniture.
Temporary pause of the REDcycle Program
On 9 December 2022, RED unexpectedly announced it would be pausing the REDcycle Program with immediate effect for reasons including a ‘lack of demand from processing partners and the unpredictably high rates of consumer participation’. This was partly due to a significant fire earlier in that year which destroyed the factory of one of RED’s main Australian manufacturing partners (Close the Loop).
Whilst RED has maintained the pause is temporary and that it is working with retailers, peak bodies and government agencies to re-establish the Program, there is yet to be any clear timeframe for the Program to recommence.
Not only has this pause created great distress among consumers who now have no option but to send their soft plastics to landfill, but it has also been a significant concern for food businesses which have the REDcycle logo or ‘return to store’ labelling on their packaging.
Challenges facing businesses which have REDcycle or ‘return to store’ recycling instructions on their packaging
In 2018, the Australasian Recycling Label (ARL) Program was launched as an on-pack labelling scheme to help consumers recycle correctly. Since its launch, more than 750 organisations have joined the program and agreed to carry Australian Recycling Labels on their packaging. Unfortunately, REDcycle’s pause has now left many of these organisations in the lurch about the use of the REDcycle logo and the Australian Recycling Label commonly found on flexible packaging informing consumers that it can be ‘Return(ed) To Store’. Since REDcycle’s ‘pause’, this information is no longer accurate and these organisations are now at risk of breaching the Australian Consumer Law (ACL) for misleading or deceptive conduct.
For many businesses, large and small, there are typically significant lead times involved with changing packaging, not to mention significant costs. Therefore, these businesses have been put in a very difficult position having to decide between:
- Making immediate moves to change their packaging, which would incur significant costs and lead times. Furthermore, having to dispose of existing packaging would further contribute to the soft plastics crisis already facing Australia. This decision is made more unpalatable given the REDcycle pause is only intended to be temporary.
OR
- Continuing to use their existing packaging and facing the risk that the ACCC could take action for misleading or deceptive conduct in respect of labelling that is no longer accurate.
What is the ACCC’s position?
The ACCC has given a conditional interim authorisation for major supermarket retailers including Coles, Woolworths and Aldi to work together as a Soft Plastics Taskforce to explore solutions to address the immediate effects of the REDcycle Program pause. However, this interim authorisation is only for the purpose of ‘exploring options for the storage, transport, processing, recycling and management of soft plastics to minimise the volume that may end up in landfill’ and does not apply to any contraventions of the ACL, including in relation to any misleading or deceptive conduct relating to product packaging or consumer communications.
The ACCC has also announced that it is engaging with various industry stakeholders and representative bodies to ‘ensure clarity and transparency in communications so as to minimise the risk of consumers being misled by representations about the recycling of soft plastics’.
Unfortunately, the ACCC is yet to provide any explicit guidance on what organisations whose packaging is affected should do whilst the Program is paused, and more importantly what their liability is in this situation in respect of misleading or deceptive conduct.
So, what should organisations do?
We encourage any business whose on-pack labelling is impacted by the REDcycle pause to inform their relevant industry associations, such as the Australian Food and Grocery Council. In doing so, businesses should explain the costs and lead times involved if required to change packaging before the REDcycle program resumes, and the likely amount of waste or environmental impact that would be caused by the disposal of existing packaging.
We are aware that some food industry bodies as well as the Australian Packaging Covenant Organisation (APCO) have been consulting with the ACCC on this issue. Ultimately, the more businesses that share their concerns with these bodies, the more extensive and compelling information they will have to pass on to responsible regulators.
REDcycle’s pause has brought to the forefront the significant issues facing Australia’s approach to soft plastics recycling, which will require a collective effort from the food industry, recycling industry, the ACCC and relevant government regulators to find an appropriate solution.
However, until the ACCC releases further guidance, we recommend that any affected businesses take appropriate steps to ensure consumers are receiving up-to-date information on how to dispose of their packaging, for example through their company website.
If you would like further information or advice on food/packaging labelling or your obligations under the Australian Consumer Law, please contact Charles Fisher or David Robbins.
This article was written by Shannan Welsh (Paralegal), Charles Fisher (Principal Solicitor) and David Robbins (Principal Solicitor).
