this invention relates to method and apparatus for producing a composite container having a body label or tubular sleeve mounted temporarily thereon adapted to be shrunken into final surface covering position . the tubular sleeve is preformed of thin flexible plastic material and flat - folded until ready for use when it is fully opened and arcuately conveyed in axial registry with a container therebeneath . the sleeve preform of heat - shrinkable plastic material is telescopically assembled onto the container while the latter is conveyed through a coincidental arcuate path . the container preferably consists of a one or two - component lightweight hollow plastic container with the tubular preform made slightly larger in diameter to surround a body portion of the container . the tubular sleeve preform is engaged and fully opened by a juxtaposed pair of vacuum heads which are pivotally partible and arcuately conveyed by such heads , and then transported downwardly in telescopic relation when in axial alignment with the container . the opened sleeve and upright container are continuously moved in synchronism in a coincident arcuate path for such sleeve mounting in temporary relation on the container body where it is adapted to subsequent heat - shrinking in place in permanent conforming arrangement .