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The apparent UK market for glass packaging
containers is valued at an estimated £581m in 1994, which represents
around 6 percent of the total packaging market (comprising paper and board, plastics,
metal cans, glass and wood) whose sales are estimated at £9.6bn in 1994.
Demand, by value, has increased significantly over the past few years, helped
mainly by growth in sales of non-returnable beer bottles and partly by recovery
from the recession.
Over the past decade, the industry was consolidated
into a small number of large manufacturing groups, which brought many benefits
to the competitiveness of the industry against other packaging materials.
Access to greater financial resources has enabled the leading companies to
invest heavily in the latest design and production technologies, and to
radically re-organise the various businesses so they are more efficient units
and able to respond quickly to new opportunities.
Various developments
in the 1990s are tending to favour demand for glass packaging, but this will
not necessarily make much impact on its current market share in the UK. These
developments revolve around environmental issues and the cost of materials
where glass has certain advantages. Recovery of waste packaging and recycling
is accelerating under the stimulus of a combination of EU Directive,
legislation and voluntary efforts. Glass is easy to recycle and cullet (waste
glass) is a desirable and relatively cheap raw material for the industry. Its
ready availability helps to contain the prices of virgin raw materials --
silica sand, potash, etc., which are plentiful and comparatively cheap. This
contrasts sharply with the rapidly rising cost of paper and board, plastic raw
materials and metals. These factors are helpful in stabilising demand for glass
and in preventing the further erosion of market share, even though there is
very little possibility of this share increasing because of the narrow band of
activities where glass is predominant.
Prospects for the remaining
years of the decade are unexceptional despite the more favourable environment
for glass packaging. It is anticipated that growth, in value terms, will
average approximately 1 percent per annum, reaching a total UK market value in 1999,
of £680m compared with an estimated £608m in 1995, at constant 1994
prices.
The whole packaging industry will be affected by increasingly
severe environmental legislation and taxation of packaging in order to force a
reduction in consumption and, unless more value can somehow be added to the
packaging materials, it seems inconceivable that the UK market will grow
significantly. Customers have already shown that they are unwilling to absorb
the present steep increases in packaging costs and, with the concentration of
buying power among fewer large retail companies, this resistance will become
even stronger.
Text © 1995 Key Note
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Last updated by Duncan Nottage 5th March 1999