Chinese government pushes regulations on excessive packaging
The Chinese government has realised the negative impact of excessive packaging, which relates to the unnecessary use of packaging, mainly secondary packaging. The main effects of excessive packaging are on the environment and inflated prices for end-consumers. The issue of excessive packaging originally arose in relation to, amongst other things, the packaging of moon cakes, which are a traditional Chinese food that are popular as gifts during the festive season. As a result, regulations were proposed to avoid excessive packaging and reduce wastage. This soon expanded to other categories, including Chinese wine, chocolate and other products that are popular gifts, prior to being extended to various other packaged goods. The Chinese government is working towards the issuance of new regulations, aimed at reducing the incidence of over-packaging and unnecessary waste. This will directly impact gift packaging across all categories and also impact the usage of secondary packaging and unnecessary primary packaging.
Small pack sizes see growing popularity
Small pack sizes benefitted from further segmentation of both products and distribution channels. In China, especially in urban areas, consumers increasingly looked for more diverse choice in terms of functionality and price, as well as quality of packaging. Small packs were favoured in some categories, such as baby food and beverages, where maintaining product freshness is of particular importance. As a result, small pack sizes became increasingly popular at the expense of bulk packaging. Furthermore, over the review period, Chinese consumers ate on-the-go more frequently, due to busier lifestyles. Consumers increasingly demanded small and convenient-to-carry food and beverage products, which contributed to the growing usage of small packs. Furthermore, companies developed small packs to better fit fast turnover distribution channels, such as convenience stores. At the end of the review period, small packs were a common sight on retail shelves and at checkout counters in China.
Clouding agent scandal reshapes China’s packaging regulatory environment
The clouding agent scandal hit Taiwan in early 2011 and soon spread to other Asian countries, including China. The scandal raised concerns about food administration and the regulatory environment in China. The scandal mainly related to plastic products, including plastic packaging. In response, the Chinese government revamped the necessary regulations, especially those relating to plastic packaging and labelling. Over the review period, the government faced allegations of having inadequate food safety and packaging standards. While this resulted in the issuance of new regulations and improved enforcement, more needs to be done to avoid a repeat of such serious incidents.
Inflation hits Chinese packagers and product manufacturers
Chinese packagers and consumer goods manufacturers were affected to a certain extent by the global economic downturn, as well as increasing raw material prices. In response, companies typically either raised their retail prices or reduced pack sizes. This trend impacted both domestic and foreign companies. Consumers also raised concerns over the quality of companies that neither reduced the pack size of their products nor raised their prices. Companies continued to evaluate various strategies for handling this challenge and packaging costs came to be increasingly seen as central to addressing the issue. This is likely to lead to a further reduction in packaging raw material usage, through a shift to using lighter packaging of the same material or a migration from one pack type to another.
The environment is among the leading concerns of the Chinese government
The Chinese government is often criticised for having inadequate measures in place to address the adverse impact of packaging on the environment. However, over the review period, the government made efforts to address the situation through the issuance of a series of regulations relating to the entire packaging value chain, encompassing packaging materials, the regulation of packagers, the country’s return system and consumer education. At the end of the review period, China continued to see rapid development, which is expected to continue over the forecast period. As such, it is likely that the Chinese government will continue to come under pressure, particularly from abroad, to put stricter regulations in place, in order to reduce the environmental impact of packaging.
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