Packaging EPR tax to “push up prices” for consumers

The British Retail Consortium (BRC) is calling on the UK government to provide “great clarity” on how consumers and the environment will benefit from the new Extended Producer Responsibility (EPR) scheme.

New figures from the BRC reveal that more than 80 percent of the costs of the new packaging tax, which came into effect at the start of the month, are likely to be passed on to already hard-pressed consumers and could “push up prices”.

The BRC adds that the new EPR tax, which aims to raise funds to invest back into recycling infrastructure, will cost the retail industry “billions,” adding another pressure to retailers, who were hit with 5 billion pounds in extra employment costs in last year’s budget due to higher employer National Insurance and rising National Living Wages.

The new packaging tax is levied on any company which produces packaging bought and disposed of by households, including retailers and brands. The fees are based on the materials and amounts used.

The BRC research adds that 85 percent of retailers said the administrative and compliance burden they face has increased significantly as a result of EPR. Firms are now required to report extensive information on the composition and amounts of packaging they are putting on the market. A move that the BRC states is creating further pressure on businesses already grappling with rising costs and a heavy regulatory burden.

The findings also found that 85 percent of retailers intend to increase the proportion of sustainable packaging placed on the market, and almost four in five retailers (78 percent) intend to reduce the total volume of packaging they place on the market.

In a statement, the BRC said: “With prices set to increase as a result of the new tax, the BRC are calling on government to put in place legal restrictions (ringfencing) to ensure the money raised from EPR can only be used by local councils to collect and operate local recycling, as well as fund improvements to local recycling systems.”