Australia's A$80 million (US$62 million) market for expanded polystyrene foam produce boxes has been cut in half, following a decision by the country's largest grocer, Woolworths Ltd., to ban the boxes from its stores.
Sydney-based Woolworths, which has more than 500 supermarkets throughout Australia, stopped buying fresh produce in EPS boxes Jan. 1, although an exception was made for some products, such as brussels sprouts, sweet corn and beans, because no alternative is available.
Dimi Pesudovs, national division manager of Australia's Plastics & Chemical Industries Association, said Woolworths' ban is based on concerns about high disposal costs for EPS boxes.
The ban has had a major effect, with January sales for Australia's EPS box industry down 50 percent compared with last year, he said.
Melbourne-based RMAX, a division of Pacific Dunlop Ltd. of Melbourne, is Australia's largest EPS converter and manufacturer of EPS boxes. Robert Zahara, RMAX general manager and chairman of PACIA's EPS industry group, said the Woolworths ban is ``catastrophic.''
Two smaller EPS box manufacturers in Victoria have closed and many others, including RMAX's Bundaberg, Australia, plant, are struggling, he said.
The majority of EPS boxes are not recycled, but end up in landfills, despite the national collection and recycling program implemented for retailers last year by Australia's EPS industry, Pesudovs said. Woolworths had rejected the program.
Zahara said negotiations regarding the recycling program are continuing with Australia's second-largest grocery retailer, Melbourne-based Coles Supermarkets, a division of Coles Myer Ltd. of Melbourne. Sydney-based Franklins Ltd., Australia's third-largest grocery retailer, already has committed to the program.
Kathryn Fisher, executive officer of the Queensland Fruit & Vegetable Growers Association in Brisbane, said growers believe EPS provides the best cooling and protection for their produce. The Woolworths' ban ultimately will affect the quality of product available to consumers, she said.
She said she does not expect other retailers to impose similar bans.
``The others see the quality is still there with foam, particularly in summer,'' she said.