Cripps Nubake is set to become the first large scale bakery in Australia to remove micro-plastic tags from their bread product range from December 7, replacing them with a recyclable cardboard option.
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Chief executive Paul Gadomski said the environmentally friendly move was "a long time coming".
"We've been working on this for five years now," Mr Gadomski said.
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"It all came about from a conversation with Greg Irons from Bonorong about how we could remove the tags, and involved investigating potential options and meeting with suppliers overseas.
Cripps produces around 12 million loaves of bread annually, with the decision set to remove more than 13 cubic metres of plastic waste from landfill every year.
Mr Gadomski said it would also help reduce environmental impacts.
"What we know is that people will often pick up a loaf of bread when they're going to barbecues or going camping," he said.
"Bread tags are small, they often fall to the ground and aren't picked up because they can be hard to find.
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"This leads to them staying out in the environment where they don't break down, and they can be extremely hazardous to wildlife if ingested."
Mr Gadomski said the move will not lead to a price rise for their products.
"The cardboard option is comparable in price to the old tag, it won't be a burden on our customers," he said.
"It's a simple product, changing a bread tag, but to put something to the market that is more environmentally sustainable and sensitive is exciting, and we hope the Tasmanian public will love it."
Cripps is investigating more environmentally conscious options for their bread bags that suits both product and consumer needs. Mr Gadomski said he hoped to be able to offer that within the next three to five years.