South-west environmentalists are urging residents to limit their plastic use after the collapse of recycler REDcycle.
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Customers were able to deposit soft plastics that could not go in recycling bins at Coles and Woolworths stores.
However last year it was revealed secret stockpiles of plastic items had been found around Australia and weren't being recycled.
The company owes more than $5 million to creditors and is now being investigated for its failure to manage thousands of tonnes of plastic.
Warrnambool environmentalist Lou Hollis said it was likely the company was overwhelmed with the demand.
"They had more soft plastic than they could recycle," she said.
Ms Hollis said supermarkets' overuse of soft plastic was partially to blame.
"You only need to go to the supermarket to find items that are wrapped in three layers of plastic," she said.
In the months since REDcycle was dropped from Coles and Woolworths' stores, neither company has introduced a replacement.
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Beach Patrol's Colleen Hughson said there wasn't an effective way to dispose of soft plastic.
"Stockpiling isn't the solution, that can lead to toxic factory fires," she said.
"The only real answer is to stop producing in the first place."
Ms Hughson said clean up group Beach Patrol had removed 694 kilograms of rubbish between Warrnambool and Port Fairy this year alone.
"That's equivalent to 323 shopping bags worth of waste," she said.
While Ms Hughson said hard plastics were more common on ocean beaches, the community group had collected 4440 pieces of soft plastic this year.
"It's problematic and the thing with soft plastics is they can suffocate animals that get wrapped up in it," she said.
"Plastic never breaks down, it just breaks up into smaller pieces."
Ms Hughson said the responsibility of plastic management fell on supermarkets and plastic producers.
"They don't have an answer for it, they just continue to make the stuff without thinking about the impact," she said.
"They're not in line with what the public wants, they're just thinking about how they can make more money out of this while they can."
Ms Hollis said customers should look for alternatives to items that used plastic.
"The first step is to reduce how much of it we purchase," she said.
"We've done it with cotton buds going from plastic to paper stems. It's not impossible."
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