A Lancashire-based plastic carrier bag manufacturer has said that the introduction of the five-pence carrier bag charge has forced it into administration.

Nelson Packaging, which has manufactured carrier bags for more than 30 years, specialising in products made from recycled materials and water-based ink, entered administration last week, with a reported loss of 40 jobs.

The company’s Managing Director, Michael Flynn, told local paper Pendle Today: “We had thought we were ready for the bag tax, but it has been far, far more challenging than we expected.”

England became the last country in the UK to introduce a bag charge in October, imposing a five-pence charge on all single-use carrier bags from retailers with more than 250 employees.

According to Tesco, the supermarket’s stores around England are using 30 million fewer bags every week, a reduction of almost 80 per cent. This would be consistent with reductions elsewhere in the UK following the introduction of charges, with Wales reporting a 78 per cent drop between 2011 and 2012 (270 million to 60 million) and Northern Ireland recording 68 per cent fall in use between 2012 and 2013 (190 million to 60 million).

Bag tax and overseas competition

An 80 per cent decrease in England would see use of carrier bags drop by around six billion a year. Resources Minister Rory Stewart suggested that this drop would reduce litter and reduce the threat of plastic waste to wildlife. However, it has also had an impact on producers.

Flynn said: “The decision was taken due to the bag tax coupled with aggressive overseas competition. We wanted to bring the manufacturing back to Britain and we wanted to generate support of British retailers to jump on board with that.

“While the Co-op, Asda and Pets at Home did that, for many others, it is still all about price, and I’m afraid we just couldn’t compete with overseas imports.”

More information about the English carrier bag charge can be found in Resource’s article.