By Raphael Geminder
Executive Chair – Pact Group

Escalating fuel prices and supply chain disruptions caused by the Middle East conflict are again exposing Australia’s over reliance on imported goods and the urgent need to focus on our sovereign capability.

Nowhere is this more evident than the impact on plastic packaging – essential for food, groceries, household products and medicines.

The availability of virgin plastic resins used to manufacture much of Australia’s packaging is deteriorating and prices are rising daily, driven by the Middle East oil crisis.

It is critical that we safeguard Australia’s plastic packaging supply chain from current and future shocks by reducing the use of imported virgin resins sourced from fossil fuels.

Australian industry, supported by government funding, has invested heavily in new plastic recycling infrastructure while packaging manufacturers like Pact Group have upgraded plants to make packaging using recycled plastic resins. This infrastructure is largely under-utilised because of the heavy reliance on cheap imported plastic resins.

Integrating domestically made recycled resins into packaging products manufactured onshore is the most practical and commercially viable solution to materially reduce Australia’s exposure to global supply chain disruptions and sudden oil price spikes.

The volatility caused by the Iran conflict is not a one off. Over the past five years, COVID pandemic shutdowns, geopolitical conflict, inflationary shocks, and systemic logistics failures have exposed a structural weakness in our supply chains.

Brand owners and producers that continue to rely solely on imported virgin resin for their packaging remain fully exposed.
To insulate Australia’s plastic packaging supply chain from global disruptions and price shocks, the government must regulate to prioritise the use of locally processed recycled plastic in packaging made in Australia.

Packaging reform currently under consideration by the Albanese government must be fast-tracked to mandate minimum recycled content requirements for plastic packaging.

Using more Australian recycled plastic resin is not just a core risk management strategy for the packaging and consumer goods sectors. It can also deliver significant economic and sustainability benefits for the nation in the form of job creation and a reduction in CO2 emissions. This is a strategic necessity to safeguard Australia’s future.