The ACCC is proposing to grant authorisation with conditions to the major supermarkets Coles Group, Woolworths Group and ALDI Stores, to continue their collaboration to recycle stockpiled soft plastics and continue with the pilot in-store collection program until 31 July 2026.

The ACCC is currently seeking feedback on this proposed further authorisation.

The ACCC first authorised this collaboration on 30 June 2023, following the collapse of REDcycle, which operated a soft plastics collection and recycling program. In July 2024, the ACCC granted interim authorisation that allowed the supermarkets to continue to collaborate through the Soft Plastics Taskforce as the previously authorised conduct was due to expire.

“It is very concerning that the vast majority of the stockpiles left over from REDcycle have not been processed almost two years later. While some limited progress has been made on reducing the stockpiles, the rate of progress is still significantly limited by the available processing capacity of soft plastic processors,” ACCC Deputy Chair Mick Keogh said.

“We understand the outlook for processing a larger share of the soft plastics stockpile is improving as more processors are due to come online in 2025, and we propose to grant authorisation to enable continued joint management of the stockpile without further delays.”

The proposed authorisation will also allow the soft plastics instore collection pilot program to continue operating in Victoria and New South Wales and expand to other areas.

“The pilot program has expanded under the authorisation previously granted by the ACCC, and whilst recognising that it needs to expand in line with available processing capacity, the ACCC expects that the supermarkets will continue with some urgency to expand these operations,” Mr Keogh said.

The ACCC is proposing the same reporting conditions as the previous authorisation, requiring the major supermarkets to provide the ACCC with quarterly progress reports and minutes of each meeting of the  Soft Plastics Taskforce. It is also a condition that all arrangements must immediately stop when the authorisation expires or is revoked.

“Given the level of consumer concern it is important that there is continued transparency about what progress the supermarkets are making in their processing of the soft plastic stockpiles and the progress towards recommencing instore collections,” Mr Keogh said.  

The ACCC is also proposing a new condition to prevent the major supermarkets from restricting recycling or logistic providers from supplying services to another customer. The ACCC understands that any long-term soft plastics solution, whether in the form of an industry-led stewardship scheme or otherwise, is likely to be the subject of a separate, future application for authorisation. The proposed authorisation does not include authorisation for any conduct of the supermarkets and their program partners with respect to any proposed stewardship scheme.

Submissions on the ACCC’s draft determination are due by 24 January 2025.

More information about the application and how to make a submission is available here on  the ACCC’s website.

Note to editors

ACCC authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act (CCA).

Section 91 of the CCA allows the ACCC to grant interim authorisation when it considers it is appropriate and in the public benefit. This allows the parties to engage in proposed conduct while the ACCC is considering the merits of the substantive CCA authorisation application.

The ACCC may review a decision on interim authorisation at any time, including in response to feedback raised following interim authorisation.

Background

REDcycle was an industry-led return-to-store soft plastics collection and recycling program developed and operated by RG Programs and Services Pty Ltd. The major supermarkets partnered with REDcycle to provide collection points for consumers to return their soft plastics instore for collection by REDcycle for processing into durable recycled plastic products.

On 8 November 2022, REDcycle announced the indefinite suspension of its soft plastics collection program as its recycling partners had temporarily stopped accepting and processing soft plastics. Following REDcycle’s announcement, Coles and Woolworths each announced the suspension of soft plastic collections from their stores until further notice.

The Participants sought authorisation from the ACCC in November 2022 to enable them to collaborate to consider and develop solutions for the recycling of soft plastics. The ACCC’s interim authorisation on 25 November 2022, led to the establishment of the Soft Plastics Taskforce, chaired by the Department of Climate Change, Energy, the Environment and Water.

On 26 February 2023, the supermarkets assumed responsibility for the REDcycle stockpiles. It was later reported that approximately 11,000 tonnes of soft plastics had been stockpiled in over 44 locations. REDcycle’s parent company was declared insolvent on 27 February 2023 with a liquidator appointed.

The ACCC granted authorisation on 30 June 2023 for a period of 12 months to allow the supermarkets to collaborate with the Soft Plastics Task force to process the soft plastic stockpiles. 

On 18 July 2024, the ACCC granted interim authorisation for substantially the same conduct authorised on 30 June 2023 while the ACCC considered the merits of the substantive application.

As part of the authorisation the Participants must submit a quarterly progress report to the ACCC. The 22 October 2024 Progress Report details the level of stockpiles remaining in each state and territory:

  • Victoria current stockpiles are approximately 2,360 tonnes
  • NSW current stockpiles are approximately 3,120 tonnes
  • South Australia current stockpiles are approximately 3,953 tonnes
  • WA current stockpiles are approximately 66 pallets.

As at 4 October 2024, 36 tonnes of soft plastics have been collected through the instore collection pilot program, which is now operating in 43 stores across New South Wales and Victoria.