UK firms are raising alarms over a new packaging tax expected to increase product costs.
- The extended producer responsibility (EPR) scheme will shift recycling costs to businesses.
- Items like soft drinks, beer, and kitchenware are anticipated to see price hikes.
- Defra provided initial estimates for fees, especially impacting glass production costs.
- Industry leaders express concern over financial burdens and potential profit losses.
UK companies are voicing concerns regarding the forthcoming implementation of a packaging tax that may lead to higher costs for essential goods. The extended producer responsibility (EPR) scheme is set to reassign the expenses associated with recycling from local councils to the businesses using the packaging. This move, reported by The Guardian, is anticipated to result in increased prices for various everyday items, including soft drinks, beer, and small kitchen appliances like toasters and kettles.
Last month, the Department for Environment, Food and Rural Affairs (Defra) disclosed its preliminary estimates for the tax rates that will be imposed on each tonne of material. Of particular note, the rates for glass are projected to range from £130 to £330 per tonne. Defra described the scheme as a ‘vital first step in cracking down on waste as we move towards a circular economy,’ while emphasising that the current fees are only initial estimates. The department continues to engage with the glass industry on devising more feasible cost calculations.
Belvoir Farm’s Managing Director, Pev Manners, highlighted the significant financial impacts expected from the EPR, citing an estimated £850,000 cost for the business in the coming year. He noted, ‘At retail we think the EPR will put between 18p and 25p on a 750ml bottle because the grocers will just see it as part of the cost, add their profit margin and then put VAT on top.’ The financial ramifications are stark, equating to the total profits of the business.
A coalition of industry associations, including the British Beer and Pub Association and the Society of Independent Brewers, projected that the tax could add between 3p and 7p to each of the 3.2 billion beer bottles sold annually in the UK. These organisations, together with others, continue to voice their apprehensions about the economic strain these changes might impose.
The upcoming EPR scheme presents significant challenges for UK firms, highlighting industry concerns over increasing costs and economic sustainability.
