Post-consumer packaging challenge: Lessons from Vinamilk

Vinamilk’s experience shows how a proactive approach can transform regulatory pressure into economic efficiency and a sustainable competitive advantage: A colorful set of tables and chairs sits in the playground of a kindergarten in Hanoi. At first glance, few people would realize that the primary material used to make the furniture is recycled milk cartons.

This seemingly small story reflects a major global trend. Instead of ending up in landfills, post-consumer packaging is being given a “second life,” transformed into useful products that serve communities. In Viet Nam, that trend is entering a new phase as regulations begin to strengthen corporate responsibility.

From encouragement to obligation

On May 25, 2026, Decree No. 110/2026/ND-CP officially took effect, detailing Extended Producer Responsibility (EPR) requirements. Under the decree, manufacturers and importers of designated products and packaging must recycle them according to mandatory standards and recovery rates once they are placed on the Vietnamese market. These rates will be adjusted every three years, with increases of up to 10%, beginning in 2029.

The decree is considered a significant step in completing the implementation framework, transforming post-consumer packaging management from a voluntary activity into a legal obligation. Beyond reducing waste and limiting the exploitation of natural resources, EPR is also expected to strengthen corporate competitiveness, particularly as export markets impose increasingly strict environmental standards.

Companies subject to the decree may choose one of two options: organize packaging collection and recycling themselves, or make financial contributions to the Viet Nam Environment Protection Fund to support recycling activities. Contributing to the fund is the faster option, but it is essentially a “transfer of responsibility.”

“Companies committed to sustainable development and possessing practical implementation capacity should organize packaging collection and recycling themselves, or collaborate with specialized recycling partners. The government should provide clearer recognition and incentives for businesses that choose the more challenging path. This is the solution that can truly create a sustainable recycling system for Viet Nam,” said Le Trung Thong, CEO and Founder of Lagom Viet Nam, an environmental services company.

Vinamilk turns EPR into an advantage

In the current context, several practical models have emerged as noteworthy case studies for the market, and Vinamilk is frequently cited as a leading example. Rather than choosing the easier option of making financial contributions, the company proactively organized collection and recycling activities for most of its packaging portfolio.

In 2025, the company partnered with licensed recycling operators to collect and recycle six categories of packaging, contributing to the fund only for one specific category. The total recycled volume exceeded 12,800 tons, surpassing the mandatory requirements.

As for this year, Vinamilk further increases recycling volumes to over 13,200 tons of packaging materials. Contrary to concerns that organizing collection and recycling would be more expensive than paying into the fund, the company reported savings of up to one-third of the cost.

However, the story is not only about cost savings. Organizing recycling enables the company to control the entire packaging life cycle, from design and collection to the final use of recycled materials. Rather than simply paying to transfer responsibility, Vinamilk can track exactly how its packaging is processed and what value is created from it. This also provides a foundation for greenhouse gas accounting and supports the company’s roadmap toward achieving net-zero emissions by 2050.

According to Huynh Thanh Trung, Chairman of Leanwares JSC, a company specializing in supporting factories through green and sustainable transformation, many packaging materials, particularly plastics, can remain in landfills for hundreds of years while generating methane - a greenhouse gas with a global warming potential 24 times greater than carbon dioxide.

“With packaging volumes reaching tens of thousands of tons annually, shifting from landfill disposal to recycling technologies such as pyrolysis could reduce hundreds of thousands of tons of CO₂ equivalent emissions each year. This is a scale large enough to qualify for international carbon credit registration,” Trung said.

Managing the packaging life cycle using comprehensive EPR approaches

Vinamilk does not view EPR merely as a waste-management issue. The company is among the few businesses in Viet Nam that began managing the full packaging life cycle - from design and use to post-consumer recycling - at an early stage. In 2025 alone, replacing traditional caps and plastic straws with a “tethered cap” design that allows consumers to drink directly from the package helped eliminate more than 4.5 million straws, equivalent to 1.7 tons of plastic.

At the same time, optimizing the design of Probi drinking yogurt bottles and plastic straws in the domestic market reduced an additional 48 tons of virgin plastic consumption. Besides lowering dependence on natural resources, these initiatives helped cut approximately 135 tons of CO₂ equivalent emissions. Today, 99% of Vinamilk’s paper cartons use water-based inks instead of oil-based inks that are more difficult to decompose.

“Rather than simply complying with regulations, leading companies in the fast-moving consumer goods sector, such as Vinamilk, act as catalysts for the broader circular economy ecosystem. Given its scale, Vinamilk has the ability to drive transformation throughout the supply chain, contribute to policy development, and help change consumer behavior in environmental protection,” Huynh Thanh Trung affirmed.

Vietnam’s waste sorting and collection infrastructure remains fragmented, creating challenges for recycling efforts. According to the Ministry of Agriculture and Environment, the country generates approximately 25.3 million tons of household waste annually, with around 60% disposed of through landfilling. As a result, implementing EPR is not merely a compliance exercise but a test of corporate capability and vision.