REDcycle collapsed with $5m in debts as more plastic stockpiles are found

Secret stockpiles of plastic bags continue to be found around Australia following the collapse of plastic recycler REDcycle, with more than a dozen new dumpsites located across six states in the past month.

Liquidators, environmental regulators and supermarket giants have been investigating the circumstances of the company’s failure and attempting to manage thousands of tonnes of plastic abandoned by REDcycle, which ran Coles and Woolworths’ signature soft plastic recycling program.

Stockpiles of soft plastic collected by REDcycle continue to be found around Australia.

The revelation comes as recently released financial records show REDcycle owes debts of more than $5 million to creditors – including staff and the Tax Office – despite earning more than $20 million in fees from the decade-old program.

REDcycle ceded control of 32 stockpiles of plastic in Victoria, NSW and South Australia to the supermarkets just one day before the company was declared insolvent by the NSW Supreme Court in late February.

But since the handover, stockpiles of plastic have been identified in 14 locations, including several stashes for the first time in Tasmania, Queensland and Western Australia.

“To date, we have identified a total of 44 sites where REDcycle had been stockpiling soft plastics without our knowledge,” a spokeswoman for Coles and Woolworths told The Age and The Sydney Morning Herald.

“We have contacted the operators of every site to develop an action plan to ensure this material is stored safely.

“With new information continuing to come in, we’re navigating a complex range of sites and challenges, and we know this process will take time.”

The supermarkets say the total weight of REDcycle’s stockpiled plastics is 1400 tonnes lower than initially estimated – 11,000 tonnes rather than the original 12,400 tonnes. The figure was revised down – even after the discovery of the 14 new sites – when detailed site inspections were conducted.

Coles and Woolworths are scrambling to find a viable mass recycling option after the NSW Environment Protection Authority set a one-year deadline, which allowed the temporary storage of the plastics rather than forcing them to be immediately dumped in landfill.

The Soft Plastics Taskforce – which includes Coles, Woolworths and Aldi – estimates it could take Australia’s domestic recycling industry more than a year to process the backlog, even given the total size of the stockpile is lower than first thought.

The recovery plan warns that the fully fledged return of a nationwide in-store recycling program, such as the one formerly run by REDcycle, could take until 2025.

Documents filed in the liquidation of REDcycle by its former director, Elizabeth Kasell, show the company collapsed with debts of more than $5 million.

This includes $411,000 in unpaid taxes and more than $62,000 owed in entitlements to former employees.

Coles and Woolworths have previously reported paying $20 million to REDcycle for using its services over the past decade.

The company also collected fees from scores of “partners” that were licensed to use REDcycle branding on soft plastics packaging and promotional materials. The participants were some of the biggest manufacturers, retailers and brands in the country, including Nestle, Johnson & Johnson, 7-Eleven, Kimberly-Clark, Bird’s Eye, Blackmores and Kellogg’s.

It is not known how much revenue these agreements generated for REDcycle. However, according to Kasell’s report to the liquidator, at the time of the company’s collapse it was still owed $24,000 from Procter & Gamble, $34,000 from Johnson & Johnson and $27,500 from JB Hi-Fi.

REDcycle’s single largest creditor is recycler iQRenew, which is owed $1.6 million. REDcycle and iQRenew announced a merger in late 2021, but it is unclear whether it was completed before the former collapsed.

iQRenew chief executive Danial Gallagher did not respond to a request for comment.

The corporate entity behind REDcycle, RG Programs and Services Pty Ltd, is due to face Melbourne Magistrates’ Court next month on charges of failing to disclose information to Victoria’s Environment Protection Authority.

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