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Est. 1989

Plastic Bag Company Heads into Administration Blaming Introduction of 5p Charges

Reviewed: 2nd March 2016

A packaging business based in Lancashire has entered administration after demand for its products dropped considerably in recent months.

Nelson Packaging’s managing director Michael Flynn has cited last year’s introduction of a 5p charge on plastic bags in supermarkets and other high street stores around England as the key reason for its financial problems. 

Legislation that insists shopping outlets throughout England charge 5p for every plastic bag used by their customers has been somewhat controversial but has succeeded in reducing the number of bags being used nationwide.

The rules on bag charges came into effect across England in October 2015, with equivalent rules already in place across Scotland, Wales and Northern Ireland.

Mr Flynn blamed “the English bag legislation and the corresponding impact on customer and retailer demand” as a major contributing factor in his company being forced into administration.

Although he also noted that Nelson Packaging’s margins have been squeezed of late by “aggressive overseas competition”.  

The company has been operating from its Lancashire factory since 1975 but was acquired by the Cheshire-based packaging business Intelipac in 2013.

A total of 40 employees of Nelson Packaging were told in recent days that they were all to be made redundant as administrators were called in and the process of winding down its operations began.

Robert Copeland, a union representative and former employee of the Lancashire company said its entire workforce were told to leave immediately after the decision was taken to put the business into administration.

Having just lost his job of 30 years, Mr Copeland said: “It’s daunting as I have no interview skills. I’m 49 years old and I’ve got to now go into a new working environment and start again. It is scary.”

“I was 19 when I started and you were seeing the children of people you have been working with for 30 years starting to come through so you had parents and children at the factory.”

Proponents of 5 pence charges on plastic bags argue that the packaging products spoil natural environments and pose a threat to wildlife.

Figures show that Wales and Scotland both saw massive drops in the frequency with which plastic bags were being used just once and then thrown away after their 5p charges were introduced in 2011 and 2014 respectively.

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