5p charge sends plastic bag firm into administration

A plastic bag packaging firm has gone into administration, blaming the introduction of the 5p charge for plastic bags in England and ‘aggressive’ competition from overseas.

Nelson Packaging, based in Lancashire for more than 30 years, has now ceased production at its factory and made 40 workers redundant. The distressed business has not said who will be appointed as the administrator.

Michael Flynn, managing director of Nelson Packaging, blamed “the English bag legislation and corresponding impact on customer and retailer demand”, but also cited “aggressive overseas competition” as another factor in the firm’s demise.

The 5p charge for plastic bags in supermarkets and other retailers was introduced in England in October 2015, and has since seen a significant drop in their use. For example, Tesco said that it has seen 30 million fewer bags being used each week — a reduction of around 80 per cent. The legislation had already been introduced in Wales, Northern Ireland and Scotland, each resulting in a similar reduction in plastic bag use.

The packaging company had been producing carrier bags and other recycled materials using water-based ink since 1975. Three years ago, it was taken over by Cheshire-based rival Intelipac.

View the latest UK businesses in administration.

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