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July 11, 2022 08:30 AM

Kickstart: Inflation, negotiations and PET

Rhoda Miel
Managing Editor
Plastics News Staff
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    Inflation, negotiations and PET

    Rising costs for materials, production and transportation are hitting companies throughout every supply chain. Manufacturers caught in the middle are having to weigh whether they can win price increases from customers to help offset their higher costs.

    Most small and midsize companies have little leverage in those negotiations, but what happens when both buyer and seller are market heavyweights?

    That scenario has played out in the United Kingdom where the country's largest grocery chain, Tesco, allowed some shelves to go empty after rejecting price increases from major suppliers.

    At the end of June, Kraft Heinz Co. stopped deliveries of some major products — ketchup, baked beans and tomato soup — after Tesco said the new prices were not reasonable.

    "We will not pass on unjustifiable price increases to our customers," BBC news reported.

    Mars Inc. also halted deliveries of Whiskas-brand cat food to Tesco shops when the grocer objected to rising prices for that product.

    On July 8, Tesco and Kraft said they'd settled their dispute and that Kraft products would be returning to shelves, but neither company would say if prices will go up as part of the agreement.

    Inflation in the U.K. is currently at 9.1 percent, its highest in more than 40 years.

    The dispute doesn't directly involve packaging costs, although obviously it will impact suppliers to Kraft Heinz and Mars. It'll be interesting to see how the standoff plays out in the long term.

     

    An expensive vintage

    Inflation also is playing a part in a decision by Japanese beverage distributor Kirin Holdings Co. to provide this year's French beaujolais nouveau wines in PET bottles rather than glass.

    As Reuters reports, the move to switch packaging is being made to cut costs, along with moves by Kirin to reduce the number of varieties available for sale while also doubling prices.

    Japan is the top importer of beaujolais nouveau, a variety of wine that is produced soon after the harvest.

     

    Plastic flood protection

    Homeowners who live in neighborhoods of New York City that could be prone to flooding will get a vinyl inflatable flood barrier as part of the city's $2.5 million Rainfall Ready NYC program.

    "Climate change is the city's biggest environmental threat, and while we continue to invest in resiliency and infrastructure projects to protect us for generations to come, the Rainfall Ready NYC action plan will help every New Yorker to protect themselves, their families and their homes,” Mayor Eric Adams said in a statement. 

    The flood barriers and sandbags will be distributed by companies that are typically associated with food deliveries, such as Uber Eats, GrubHub and DoorDash.

    The plan announced July 7 did not specify which flood barriers it will hand out, but companies such as Floodworx produce flexible dams that can be filled with water via a garden hose that will help hold back floodwaters and can be reused multiple times.

     

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