Woolworths has quietly abandoned a plan to make all of its paper bags in Australia and will continue outsourcing some of the production to China and Vietnam, Crikey can reveal.
The grocery giant set the goal of making all of its paper bags in Australia in 2021 in response to customer backlash.
The previous year, when the supermarket chain began offering paper bags at checkout, some customers expressed disappointment the bags were made overseas. The backlash was amplified in numerous news stories at the time and Woolworths then announced it had signed a deal with Australian manufacturer Detpak.
Parent company Woolworths Group bragged in a media release in April 2021: “The supermarket has been working with Detpak to plan and grow local capacity since early 2020 to produce the paper bags at scale in Australia and support a transition to a 100% Australian-made line nationally.”
But by the middle of 2022 it had become clear internally that Woolworths wasn’t going to be able to keep that promise, Crikey understands.
That’s when Woolworths and its discount department store sister chain Big W announced they would begin phasing out plastic shopping bags nationwide, in a move timed with World Environment Day and aimed at “[removing] 9000 tonnes of plastic” annually.
Scrapping the plastic bags meant there would be a huge increase in demand for paper bags, and the chain realised it wouldn’t be able to produce the required amount in Australia.
Unlike the multimillion-dollar deal with Detpak, which was announced in a media release and written up in news reports, the decision to abandon the goal of making all the bags in Australia was not communicated to the public at all.
Woolworths Group confirmed this week it would continue to make bags abroad, but refused to say what percentage was being made in Australia, saying that detail was “commercial in confidence”.
“The production capacity in Australia is currently limited and we’re working with two Australian manufacturers to source as many locally made paper bags as possible,” a spokesperson told Crikey.
The spokesperson said Woolworths had wanted to make the paper bags in Australia from the start, and that the desire to work with local manufacturers was not prompted by customer feedback.
The other Australian paper bag manufacturer that has gone into business with Woolworths is Opal, based in Victoria.
The partnership with Opal created 30 Australian jobs, Woolworths said, while the deal with South Australia-based Detpak created 24 jobs.
The paper for the Australian-made bags is being manufactured in the Maryvale mill in regional Victoria.
The phasing out of plastic bags had proceeded according to plan, Woolworths said, and 15-cent plastic bags have now been removed from “all stores nationwide”.
Competitors Aldi and Coles have also said they will stop offering soft plastic bags.
Lightweight plastic bags less than 36 microns thick have been banned in every Australian state and territory, according to the National Retail Association.
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