<p>The increasing use of multilayer polymer films in food packaging presents a significant challenge for mechanical recycling, as immiscible co-extruded layers (e.g., polyethylene (PE)/ethylene vinyl alcohol (EVOH)) commonly yield blends with poor mechanical properties. Here we present a solvent- and compatibilizer-free mechanical upcycling route that converts post-consumer PE/EVOH milk pouches into in-situ microfibrillar composites (MFCs) via a three-step sequence: melt blending, controlled filament drawing, and final molding. Processing was optimized by varying roller temperature and draw ratio; the best-performing condition produced an approximately tenfold increase in fracture toughness relative to the unstretched reference, while uniaxial tensile properties remained statistically indistinguishable across formulations. Microstructural examination by cryo-fracture SEM confirms the transition from globular dispersed domains to elongated EVOH microfibrils as draw ratio increases, with an optimal fibrillation window beyond which fiber breakage reduces performance. A techno-economic appraisal indicates that microfibrillation requires a modest incremental capital expenditure while changes in operation expenses are negligible. Together, these results demonstrate that controlled microfibrillation of post-consumer multilayer films is an effective and economically plausible route to upcycle otherwise hard-to-recycle packaging into higher-value, tougher materials, aligning with circular-economy objectives.</p> Graphical abstract <p></p>