A lidding system for heat sealing a lidding web onto open-topped plastic containers includes a heat sealing head including heat sealing dies and a number of carrier plates for supporting a queue of containers. The carrier plates are displaced past the sealing head and define transverse slots between them. The system includes an optical sensor for sensing the a position of labels on the lidding web, and further includes a pair of pleating bars movable in a vertical direction and extending transversely relative to the direction of travel of the carrier plates. The system includes a PLC linked to the optical sensor for actuating displacement of the pleating bars into lowered positions wherein the bars are received in the slots to form pleats in the lidding web, thereby adjusting the position of the labels relative to the containers, in response to the labels not being sufficiently aligned with the containers.