Danone, the producer of Evian and Volvic, is tackling critics from environmental groups, as well as falling sales, with a plan to recycle as many plastic water bottles as it uses in the UK, The Times has learnt.

The French company, whose bottles are made with 25 per cent recycled plastic from France and Germany, is to buy up to 12,000 tonnes of plastic a year from Greenstar, a Buckingham-based recycling operation.

The aim is to increase use of recycled PET (plastic used in water bottles) from 10,000 to 40,000 tonnes by 2012. Danone wants its bottles to be made from 50 per cent recycled plastic - or more if technical difficulties can be overcome - within the next few years.

Bottled water companies have come under fire from environmentalists for their use of plastic to sell a product that people in the UK can drink free straight from the tap. Some local authorities in the UK and US have banned plastic bottle dispensers from their offices amid claims that 16 million gallons of oil were consumed to make such bottles last year.

The furore is estimated to have led to a 9 per cent fall in sales of bottled water last year from a peak in 2006. In the previous 30 years, sales had risen one-hundredfold to 2,000 million litres a year.

According to Nielsen, the market research group, sales of Danone's bottled mineral water fell 12.5 per cent in the 12 weeks to mid-November last year as they were also hit by the economic downturn.

Danone will buy 5,000 tonnes of plastic from Greenstar this year and increase that to 12,000 tonnes by 2011. Using the British recycled plastic will save the company £250,000 this year.

Nick Krzyzaniak, chief executive of Danone Waters in the UK and Ireland, said: “For every Evian and Volvic bottle sold here in the UK, one bottle will be recycled and the plastic reused.” Danone is hoping to roll the idea out to markets beyond the UK.

The government-backed Waste & Resources Action Programme (Wrap) welcomed the deal, saying that another regular buyer of recycled PET would give local authorities more confidence that there were customers ready to buy the material and so increase its collection.

Some councils are having difficulties in selling recycled materials after prices collapsed when Asia temporarily stopped buying. The price of PET bottles sorted into bales has dropped from £150 a tonne last summer to about £80 a tonne.

Richard Swannell, Wrap's director of retail and organics, said: “The Danone Waters PET bottle recycling initiative demonstrates that there is a robust market for good-quality UK recycled materials, and that major brands recognise the role they can play in encouraging recycling of their packaging.”

But Chris Dow, managing director of Closed Loop Recycling, a company that processes PET bottles for use by manufacturers, questioned the viability of Danone's plan to ship used plastic bottles to its reprocessing partner in Dijon, France. Both Closed Loop and Greenstar have British facilities to turn the bottles into clean plastic chips, which would be much less expensive and more environmentally friendly. “They should be doing that in the UK - it beggars belief,” he said.

Danone, which is listed in France, reports its annual results today.

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