this invention relates to method and apparatus for producing a composite container having a neck label or tubular sleeve mounted temporarily thereon adapted to be shrunken into final surface covering position . the tubular sleeve is preformed of relatively - stiff material and flat - folded until ready for use when it is partially opened and conveyed into axial registry with a container therebeneath . the sleeve preform of heat - shrinkable plastic material is telescopically assembled onto the container while the latter is firmly retained at an upper region . the retention device for the container serves to both fully open the sleeve preform and align the preform and container into axial arrangement . a reciprocatable head contacts the preform while so retained and telescopes the preform at least partially over the container . after the retention device releases the container , a second reciprocatable head contacts the preform to more fully telescope the preform over the container to a finally - aligned position where it is then adapted to subsequent heat - shrinking in place in permanent conforming arrangement .