The firm hopes Recycled MG Brown and Recycled MG Bleached will be another weapon in the fight against low-cost foreign rivals, said the general manager of packaging, Paul Allen.

"We're a little Australian company trying to survive… and we're getting differentiation through this product. The humble paper bag is getting a little bit sexy," he told ProPrint.

"This is vital for manufacturing in this country that we have sustainability as a differentiator from all the imports that come here."

[Related: AP joins carbon neutral program]

Allen said 50 tonnes had been sold since the product launched in November with another 70 tonnes on order. One tonne equates to about 200,000 bags.

The product is manufactured at Australian Paper's Maryvale mill and distributed by BJ Ball. Pharmacy supplier Stirling Fildes was the first customer to come on board.

Allen said there was less demand for carbon neutral paper in packaging than printing, but that the response had been strong since the product hit the market.

Stirling Fildes managing director Adrian Willoughby said the firm would gain a commercial advantage from being the first in its sector to use carbon neutral paper bags.

[LinkedIn: Do your clients really care about the environment?]

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