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Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.

 

Plastic ban creates corporate headache for Amazon, Pepsi

Tuesday, July 03, 2018 > 11:56:52
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Dive Brief:




  • Global companies like Amazon and H&M are fighting to soften a ban on single-use plastics that went into effect in the Indian state of Maharashtra last week, Reuters reported.

  • The ban could cost up to $2.2 billion annually and almost 300,000 jobs, the local plastics industry claims. Violators of the plastic ban in Maharashtra face fines or imprisonment.

  • Plastic bags, utensils, packaging, and bottles are banned, but exemptions include food-grade plastic and plastic used for some medicines and manufacturing, according to FirstPost.



Dive Insight:

India's latest attack on a chronic environmental hazard has companies of all sizes scrambling for cost-effective responses. 

E-commerce companies like Amazon face the challenge of packaging materials with cardboard, which costs 30% more than plastic materials, according to Economic Times. 

McDonald's outlets in Maharashtra had started to implement wooden utensils, corn-starch straws and paper cups in the wake of the ban but had not found alternatives for plastic lids, a spokesperson told CNN Money. The company requested an exemption for delivery and take-out orders. Restaurants, which store plastic-packaged foods, will have to stomach huge costs from the ban, and some have suspended deliveries, reported Economic Times.

The laws are changing logistics, too, as e-commerce companies move to store inventory in states that don't have the ban. The ban also affects e-commerce orders from other states into Maharashtra, according to the Times.

Some companies want more clarity about the ban's specifications and more time to adjust. Amazon and others requested an extension, Pepsi and Coca-Cola wanted exemptions and H&M asked for clarification, Reuters reported.

"Our demand to the government is: give the industry seven years to come up with alternatives," Neemit Punamiya, general secretary of the Plastic Bags Manufacturers Association of India, told Reuters. "It cannot happen overnight — we’ve got investments, we’ve got loans to pay and people to manage."

This isn't the first ban of its kind. India has established some type of plastic-bag ban in more than half of its states, according to Reuters. Indian Prime Minister Narendra Modi is moving forward with a separate plan to eliminate single-use plastic all over in India by 2022. 


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