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S&P: Large consumer brands to shoulder cost of plastic phaseout

S&P Global Ratings on Sept. 19 said major global consumer brands rather than consumers will shoulder most of the costs involved in the transition to eco-friendly packaging.

Large consumer goods companies will likely lead the plastic phaseout in response to growing customer scrutiny and stricter environmental laws worldwide, S&P Global Ratings credit analyst Rachel Gerrish said.

Although phasing out plastic packaging "will test [the companies'] strategic and financial policy choices," the agency said it would have no immediate ratings impact as they have sufficient profit margins to handle the shift.

Packaging producers will have more difficulty complying with new norms as falling plastic demand will force them to redesign products and manufacturing procedures, which could weigh on ratings over the next five to 10 years. New materials and changing polymer mixes will push up costs, though it should have no issuer credit rating impact, Gerrish said.