{"id":128006,"date":"2022-06-27T09:23:40","date_gmt":"2022-06-27T09:23:40","guid":{"rendered":"https:\/\/fin2me.com\/?p=128006"},"modified":"2022-06-27T09:23:40","modified_gmt":"2022-06-27T09:23:40","slug":"plastic-straws-cause-fmcg-firms-indigestion","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/plastic-straws-cause-fmcg-firms-indigestion\/","title":{"rendered":"Plastic straws cause FMCG firms indigestion"},"content":{"rendered":"
The industry may account for just 0.05 per cent of the total volume of single-use plastics in the country.<\/p>\n
<\/p>\n
And the product it uses is just one among the 22 — including spoons, forks, plates, knives and trays — that will be banned across the country from July 1 by government order.<\/p>\n
Yet, it is the plastic straw that is at the centre of public focus as fast-moving consumer goods (FMCG) companies make a last-ditch effort to get the government to extend the deadline.<\/p>\n
Specifically, it’s the plastic straws used in small tetra packs between 75 ml and 250 ml for juices, beverages, milk and even chaas.<\/p>\n
That’s because the companies that are impacted most are the big ones — such as Amul, Parle Agro, Dabur and PepsiCo.<\/p>\n
With a collective turnover of Rs 6,000 crore, these companies have more heft in relation to their contribution to the use of single-use plastic.<\/p>\n
Together, they consume about six billion straws every year.<\/p>\n
Their problem is that these straws have to be replaced by expensive paper straws that India does not produce at present.<\/p>\n
But with a serious supply shortage of paper straws around the world, at least one leading player, Parle Agro, makers of the hot-selling Frooti and Appy, says that the industry might have to close factory operations if the deadline is not extended.<\/p>\n
“India has high demand, but none of the suppliers in China and Southeast Asia have the capacity to supply us immediately.<\/p>\n
“They will take three months and the problem of containers not reaching will continue.<\/p>\n
“If paper straw arrivals are delayed the plants may stop working,” said Schauna Chauhan, Parle Agro managing director.<\/p>\n
The public outcry against the plastic straws ban is a global trend.<\/p>\n
Even in the US, plastic straws account for 0.025 per cent of the plastics that settle on ocean beds each year.<\/p>\n
But Lonely Whale, a seven-year-old activist group that campaigns against plastics entering the ocean, has clarified that the plastic straw is not the sole focus of its activism.<\/p>\n
It wants to make people aware of “how single-use plastics are prevalent in our lives, putting up a mirror to hold us accountable”.<\/p>\n
Banning plastic straws is a simple way of building awareness among consumers on plastic waste and pollution and also the fact that it is a matter of choice and not necessity, since you don’t really need a straw to drink juice.<\/p>\n
In India, too, plastic straws have all the ingredients for an awareness campaign — big companies, both global and local, and a large middle-class consumer base that consumes these products, many of which are targeted at younger peoples and even children.<\/p>\n
Banning plastic forks or plates manufactured by the small-scale sector does not create an equivalent degree of hype.<\/p>\n
But why are FMCG companies, which were well aware of the government’s insistence on this ban, so unprepared and failing to place sufficient import orders?<\/p>\n
And why are they looking at the last moment?<\/p>\n
The industry has been divided. Many multinationals, sensing that a programme under Prime Minister Narendra Modi’s leadership would not get extension, decided to place orders for paper straw imports many months ago.<\/p>\n
So, they have no problem with the transition.<\/p>\n
The Ministry of Environment, Forest and Climate Change notified the ban in August 2021 under the Plastic Waste Management Amendment Rules, giving all companies sufficient time for action.<\/p>\n
But it was only in April 2022 that the Action Alliance for Recycling Beverage Cartons (AARC) decided to petition the government that there is no alternative to integrated plastic straws.<\/p>\n
They argued that there are problems when paper straws touch a cold surface (they become soggy) and asked for a 12-18-month extension to find viable alternatives.<\/p>\n
But in May, AARC changed its stance and told the government that it would replace plastic straws with paper but would still require an extension of 18 months.<\/p>\n
It chalked out a three-pronged strategy — import straws, import machines to make straws in India, and try out compostable plastics for straws that don’t have harmful effects.<\/p>\n
But the government did not respond.<\/p>\n
“Many companies thought that just as the food standards authority grants extensions on various issues, the same thing would happen this time. But it did not.<\/p>\n
“Considering there are 22 other products, it would have been suicidal to grant just one product extension in a market in which big players operate,” said an industry source aware of the developments.<\/p>\n
He said FMCG players also tried to get the Amul cooperative to convince the government for an extension.<\/p>\n
Meanwhile, a debate has arisen on whether paper straws are really environment-friendly.<\/p>\n
Experts agree that it is a better option than plastic, but point out that many paper straws in the market are not compostable or recyclable.<\/p>\n
They also require cutting trees to produce, and paper products generate more greenhouse gases than plastic because they consume four times more energy to manufacture.<\/p>\n
Yet, the stark reality is that plastic straws take up to 200 years to decompose, and they break into smaller plastics and can be ingested in marine life.<\/p>\n
In contrast, paper straws decompose within two to six weeks.<\/p>\n
But it might be a while before paper straws come to India — manufacturers worldwide will be able to deliver only 50 per cent of global paper straw demand, which is rising as more and more countries and cities go for a ban.<\/p>\n
The CEO of AARC, Praveen Aggarwal, estimates that only 25 per cent of the country’s demand will be met by this year’s end.<\/p>\n
And for those importing machines to make in India, it is a one-year wait.<\/p>\n
But there is some good news.<\/p>\n
An Indian packaging company is planning to set up a unit in the country that will be able to meet the demand of paper straws by the peak season.<\/p>\n
But until then, the only hope is if the government chooses to heed the last-minute lobbying by FMCG players.<\/p>\n