REDcycle declared insolvent, but plastic stockpiles under control of supermarket giants

The company behind the Coles and Woolworths soft plastics recycling program has been declared insolvent after failing to pay storage fees for the thousands of tonnes of plastics it secretly stockpiled around the country.

RG Programs and Services Pty, which trades under the name REDcycle, was wound up by order of the New South Wales Supreme Court on Monday morning and a liquidator has been appointed to take control of the failed business.

REDcycle bins were placed inside nearly 2000 Coles and Woolworths supermarkets before the program collapsed.

But the financial collapse of REDcycle will not affect the rescue plan launched last week by the supermarket giants to take control of the 124,000 tonnes of plastics found inside 32 warehouses in NSW, Victoria and South Australia since late last year.

A joint spokesperson for Coles and Woolworths said the company had signed an agreement with REDcycle, allowing them to assume control of the materials on the weekend, just ahead of Monday’s court appearance.

The supermarkets are now formulating a plan for the “short-term” consolidation and safe storage of the scattered stockpiles, which could involve packing the plastics inside up to 1000 shipping containers at a licensed facility. They would be stored until a process can be found to recycle the materials.

The rescue plan does not include paying for any of REDcycle’s past debts or acquiring the company itself. It only relates to the future management of the stockpiles.

The application to wind up REDcycle was launched by NSW transport firm, BTG Logistics, over an unpaid $200,000 debt for storing about 600 tonnes of plastics on behalf of REDcycle.

Another firm, Melbourne-based Topline Logistics, also joined the action in the Supreme Court. The amount that company is owed is unknown.

Soft plastics have been stockpiled after the collapse of the REDcycle scheme.

The winding-up order is likely the death knell for the decade-old REDcycle operation, which has claimed to have recycled more than 5.4 billion soft plastic items collected from its signature bins inside nearly 2000 supermarkets nationwide.

REDcycle has been contacted for comment about the court order and demise of its business.

In November, REDcycle and the supermarket giants halted the high-profile program after The Age and the Herald revealed the soft plastics that were being collected had been secretly diverted to storage instead of being recycled.

The mastheads later revealed the program began to fail in 2018 as it struggled to meet a massive surge in demand after it was rolled out nationwide, but the public was never informed about the problems.

After the program’s suspension, REDcycle issued strident public denials it had been engaged in large-scale, long-term stockpiling, or misleading the public about its operations.

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