INSIDE FOODSERVICE | Tougher Australian packaging regulations set to impact foodservice sector
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Major change is on the way to Australia’s packaging regulations – and this is set to impact both food suppliers and foodservice end-users. The Federal Government is coordinating an effort to bring in new legislation across Australia’s states and territories: in place of voluntary codes of practice, recycling of plastic and removal of certain chemicals from the packaging supply chain is to become mandated by law.
Australia’s national packaging targets set back in 2018 covered four key areas: that 100 per cent of all packaging be reusable, recyclable or compostable (currently this sits at 85 per cent); that 70 per cent of plastic packaging be recycled or composted (currently at 19 per cent); that there be an average 50 per cent of recycled content in packaging (currently at 44 per cent); and that problematic and single use packaging be phased out (currently reduced by 40 per cent). These targets were originally set for implementation by the end of 2025.
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A key player in this landscape is APCO, which is responsible for managing and administering the Australian Packaging Covenant – a national regulatory framework under Australia’s National Environment Protection Measure (NEPM). We spoke to APCO’s CEO Chris Foley to gain insights into how the looming changes are likely to impact the foodservice sector.
“The fact that state and territory government environment ministers have now committed to mandating national standards is a real breakthrough,” Chris says. “At the moment, many in the foodservice sector and/or industry in general have found it really challenging trying to navigate state and territory laws because packaging and waste recycling sits under the auspices of the various states and territories, but if you’re a nationwide foodservice business or brand owner you need to be working with one approach nationally.”
CHRIS FOLEY
“ Essentially compliance is going to be no longer discretionary but mandatory”
A lot of work was done last year, led by the Federal Government around developing national standards - there will mandates on recycled content, so you will need to have that in your packaging, and we’re expecting there will also be some mandates in and around packaging labelling to confirm compliance. We’re also expecting changes in and around the mandatory nature of aligning with these national recycling targets.
“From our point of view these changes are long overdue – business wants certainty, transparency and equity, and if everyone’s in the same boat and it’s really clear what the expectations are, then we can all align around achieving those. Essentially compliance is going to be no longer discretionary but mandatory – so our advice to businesses in foodservice is don’t get caught waiting but look at your packaging now, because once these new mandates go live it’s game on so the better prepared you are, the smoother the transition.”
“Once these new mandates go live it’s game on so the better prepared you are, the smoother the transition”
Chris says there are a number of things that foodservice businesses can do now – such as reviewing your packaging to see whether it aligns with the sustainable packaging guidelines already in place. “Do you know where your packaging comes from, have you started engaging with your packaging supply chain to ask them about how their packaging formats align with the new national standards? These are conversations that are best had before the regulations come into effect, and you can then start to make considered business decisions. Do you need to change and what is that going to look like? How will you bring in recycled content and where will it come from? There are lots of resources available and for APCO members we’re really keen to help on this journey.”
APCO members can access materials working groups
He emphasises “This is a crunch year and you can't ignore it. Regulatory reform is coming, it will be non-negotiable and there are processes at play to hold industry accountable. The good news is we’re already seeing some alignment within industry sectors – such as the collaborative work the FSAA has been doing with us around polypropylene pails. Thousands of these get pushed into the market through foodservice but where do they go? That’s actually a resource which if recovered can be recycled, it’s a question of how best to achieve that. Through our collaborations such as the FSAA initiative, good things can happen – in some instances when you work with others the economies of scale can deliver outcomes that are bigger than any one of us.”
APCO has set up materials working groups which its members can access to help get up to speed with tailored workplans addressing critical issues relevant to particular materials streams. Chris says, “We’re looking to turn complexity into bite-sized work programs – we have representation across the whole system, from businesses designing and making packaging to those using the formats, as well as downstream which could be a local gov waste contractor or a collector from a materials recovery facilities. This gives us a whole system view of the problems and what the solutions might look like.”
Leading foodservice suppliers such as Bega Foodservice are signatories to APCO, exemplifying their commitment to making a meaningful contribution to the national sustainable packaging targets. A Bega Foodservice spokesperson emphasises the business undertakes continuous review of its packaging to find opportunities to improve recyclability, add recycled content and phase out problematic plastics. Recent examples include reducing the amount of problematic polystyrene packaging by over 900 tonnes in 2023, largely by phasing out polystyrene in its yoghurt pots and tubs; introducing 100 per cent rPET (recycled PET plastic) in its milk-based beverage bottles, introducing clear caps on white milk and yoghurt pouches, and introducing rHDPE (recycled high density polyethylene) for some white milk and juice bottles.
As with many major suppliers, such initiatives are undertaken in line with a broader sustainability strategy; in Bega’s case, its ‘Better Future’ strategy which is set to be refreshed this year.
Packaging prices set to rise significantly
For a further perspective on what the regulatory changes will mean to foodservice, we spoke to Gary Kennedy, a food scientist and managing director of Sydney-based food safety consultancy Correct Food Systems.
Gary argues packaging prices are set to rise significantly. “Everything from plastic takeaway food containers to coffee cups, disposable plates and paper napkins is going to have to meet the new recycling targets under the proposed standards, and some of that involves limiting the use of virgin material, some of it is around packaging needing to be recycled or compostable, meaning it needs to go into the yellow or green bin and not in the red bin. All of those changes means the cost of packaging is going to go up by at least 50 per cent – and that doesn’t include disposal costs which may come into this as well.”
“Small foodservice businesses simply won’t be able to absorb these increased costs, particularly those who do a lot of takeaway”
GARY KENNEDY
He says these price rises will have to be passed on to consumers in the form of higher meal costs – “small foodservice businesses simply won’t be able to absorb these increased costs, particularly those who do a lot of takeaway. Whereas restaurants using crockery and cutlery won’t see as big a cost rise. But because suppliers like Nestle, Unilever and Coca-Cola will now have to supply recycled and compostable package, the cost of ingredients and readymade products is set to rise as well.”
As for support from industry associations, Gary says “in many cases I don’t think they really know this is coming. I work with the IHHC and there are also associations like Restaurant & Catering Australia and the Australian Hotels Association, and when these standards become mandatory certainly they will help their members by producing guidelines, running training courses and offering advice – but at the moment because they’re not mandatory, people aren’t interested in implementing them because it’s a cost to their business.”
“When this comes in there’s likely to be a five year phase-in and a two year stock in trade period”
This means there will likely be a big rush to conformance at the end – “when this comes in there’s likely to be a five year phase-in and a two year stock in trade period, a bit like when they said let’s get rid of plastic spoons and gave a timeframe, then said any you have left in stock by this date you can still sell until you get rid of them.”
Gary emphasises many people don’t yet realise how far-reaching these changes will be - “it’s all packaging, down to the pallet stretch wrap, the outer box your meat arrives in – if the new law says 75 per cent of plastics must be recycled, how are you going to do that if you’re a meatworks and most of your plastic is covered in blood? There are some really tricky elements to putting this in place.”
“If you had to pick the gold standard you’d look to the EU”
Asked whether any other countries have got it right yet, Gary says “if you had to pick the gold standard you’d look to the EU. Germany and Sweden are by far the most advanced – in Germany the manufacturer is responsible for their packaging. In Sweden there are mandatory recycling targets. Europe is also ahead of us in removing certain chemicals from packaging which make current forms non-recyclable. And I think one of the strong arguments for mandating these changes is that currently there is a lot of dodgy packaging sitting in warehouses around the world that can’t be sold to the EU because of their laws – and if we don’t regulate, all that dangerous, non-recyclable, potentially toxic packaging is likely to be sold into Australia because we’re such an affluent market.
“So I agree with APCO – I hope by the end of the year the environment ministers have come to an agreement and there’s a set of goals with measurable and realistic dates and targets, and what are currently guidelines or codes become mandatory standards. Until that happens, organisations are going to sit back and not really do much because they’re not required to.”
Further reading on the subject:
APCO has considered the EU’s position on packaging and costs around moving to more sustainable packaging as covered in its 2030 Strategic Plan.
Concerns around recycling labels on packaging and proposed changes to these are covered in the ARL program (the only evidence-based recycling label available in Australia and New Zealand, with clear instructions on how to dispose of packaging).
