Industry Warns New Levy Will Burden Consumers and Fail to Improve RecyclingA new packaging tax set to come into effect next month has sparked concerns among retailers, food producers, and online sellers, who warn that the cost will largely be passed on to consumers without delivering promised improvements to recycling services.The tax, known as Extended Producer Responsibility (EPR), will require businesses to pay fees based on the weight of packaging used in their products. This could result in an additional 12p charge per glass bottle or jar and up to 6p for plastic containers, while Amazon and other e-commerce retailers could face packaging costs exceeding £200 per tonne of cardboard.
Industry Concerns Over Cost and Impact
Retail leaders have criticized the scheme, arguing that it will increase financial pressure on businesses already struggling with rising costs from national insurance contributions and minimum wage hikes. According to government estimates, at least 85% of the new tax will ultimately be passed on to consumers, adding as much as £56 to annual household expenses.Jim Bligh, director of packaging at the Food and Drink Federation, warned that the system could lead to unintended consequences:“There is a significant risk that producers will switch to using virgin plastic because it is lighter and cheaper than recyclable materials like glass or cardboard,” he said. “Without dedicated investment in recycling facilities, lightweight plastics will continue to be sent abroad for incineration rather than being processed domestically.”
Lack of Ring-Fencing for Recycling Improvements
One of the most contentious aspects of the EPR scheme is that funds raised will not be directly allocated to recycling initiatives. Instead, the money will go to local councils, raising concerns that it will be used to plug budget shortfalls rather than improve waste management infrastructure.Andrew Opie, director of food and sustainability at the British Retail Consortium, said:“Retailers and suppliers are already under immense cost pressures. This tax is being framed as an environmental initiative, but without clear commitments from councils, there is a real risk that these funds won’t be used to drive the recycling improvements that businesses and consumers were promised.”
Government Defends the Policy
The Department for Environment, Food & Rural Affairs (Defra) has defended the tax, arguing that it will drive long-term investment in the UK’s recycling infrastructure and create new jobs.“We have been clear that all councils will use this funding to improve waste collection services for their communities,” a Defra spokesperson said. “This policy will help stimulate over £10 billion in recycling investment and create 21,000 jobs over the next decade.”However, industry experts remain skeptical, urging greater transparency on how the funds will be spent and calling for measures to prevent businesses from shifting to environmentally harmful packaging alternatives.As the tax comes into effect, suppliers and retailers will need to assess their packaging strategies carefully to navigate the new costs while maintaining sustainability commitments. Businesses are advised to review supply chains and explore innovative packaging solutions that balance cost efficiency with environmental responsibility.
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