How Australia’s largest soft plastics recycler that provided essential service to Woolies and Coles was actually just storing waste in dozens of ‘secret’ warehouses before it went bankrupt and owed millions of dollars
- Collapsed recycler REDcycle owes $5 million
- $5 million owed despite receiving $20 million
- Supermarket bags secretly stashed away
The recycler that stashed Coles and Woolworths’ plastic bags in warehouses collapsed thanks to $5 million creditors, documents show.
Despite receiving $20 million from the two supermarket giants for nearly a decade to recycle plastic bags and other items, REDcycle instead stored a mountain of trash in at least 44 locations.
When it collapsed in November 2020, the Melbourne-based company was Australia’s largest soft plastic collection scheme, but hadn’t been able to operate normally since June last year after a fire destroyed the Melbourne factory.
Owned by the RG Programs and Services company and founded in 2011, REDcycle quietly began stockpiling the plastics it was supposed to recycle.
Coles and Woolworths deny knowing that REDcycle stored the plastic in warehouses, which have so far been found in NSW, Victoria, Tasmania, South Australia and Tasmania.
Recycler REDcycle, which worked with supermarkets Coles and Woolworths, went bankrupt in November last year
Financial documents viewed by the The Sydney Morning Herald show that REDcycle went into liquidation with $62,000 owed to employees and $411,000 to the IRS.
The largest debt, $1.6 million, is owed to another recycler iQRenew, with which REDcycle announced a merger at the end of 2021.
In February, Woolworths and Coles said they would take responsibility for the plastics stored.
“We are reviewing logistics and storage arrangements for each stock on a case-by-case basis as we continue to discuss recycling options with several reputable processors abroad,” a spokesperson for the supermarkets told 9News.
“At the same time, we are working through the Soft Plastics Taskforce to develop a new in-store recycling program to close the gap left by the collapse of REDcycle.”
The NSW Environment Protection Authority has given permission for the plastics to be stored in that state for a year and if no recycling option can be found during that period, they will go to landfill.
REDcycle started secretly storing plastic bags and other items from the supermarkets after the factory caught fire in June 2020
Massive stockpiles of plastic waste claimed by REDcycle to be recycled came to light in November 2020
RG Programs and Services Pty faces legal action next month from Victoria’s Environment Protection Authority in Melbourne Magistrates’ Court where it could be fined more than $165,000.
REDcycle charged its ‘partners’ fees to put their recycling brand on soft plastic packaging and promotional materials.
Those partners included some of the country’s biggest corporate names, such as Nestle, Johnson & Johnson, Procter & Gamble, HB Hi-Fi, 7-Eleven, Kimberly-Clark, Bird’s Eye, Blackmores and Kellogg’s.
When the secret warehouses came to light, Liz Kasell, CEO of REDcycle, said the company had been unable to keep up with the rising demand for plastics recycling.