Over 80% of Extended Producer Responsibility costs are likely to be passed onto customers, new figures from the British Retail Consortium show.
Retail industry leaders claim that Extended Producer Responsibility (EPR) fees are likely to place a ‘significant financial burden’ on UK retailers and households.
As part of the UK’s EPR scheme for packaging, businesses must register and report data about the packaging they supply or import, and cover the costs of managing household packaging waste. The first fees for packaging placed on the market in 2024 are being invoiced this month.
The British Retail Consortium (BRC) says the industry has been left with ‘little room to absorb additional costs’ following last year’s Budget.
The survey found that 85% of retailers intend to increase the proportion of sustainable packaging placed on the market. While 78% plan to reduce the total volume of packaging they put on the market.
Andrew Opie, Director of Food & Sustainability at the BRC, said that retailers support the polluter pays principle and are making ‘significant changes’ to reduce and improve their packaging.
However, he criticised EPR for packaging as a ‘multi-billion pound levy’ that will be ‘paid by consumers during a cost-of-living crisis’.
The BRC are calling on the government to ringfence the money raised from EPR so it can only be used by local councils to collect and operate local recycling, as well as fund improvements to local recycling systems.
“They (consumers) will ask: what are we getting for higher prices?” Opie continued. “Unless funds are spent transparently and effectively, EPR threatens to just be another burden on an already overtaxed industry with no tangible benefits for customers or the environment.”
Industry has a choice about whether to reduce packaging, absorb the cost or pass it on to consumers.
Environment spokesperson for the Local Government Association (LGA), which represents councils in England and Wales, Cllr Arooj Shah, said the retail industry has a choice about whether to reduce packaging, absorb the cost or pass it on to consumers.
Shah also said councils reject the calls to ring-fence EPR fees to only fund waste collections, claiming that, in practice, it amounts to a call for industry control of council waste services.
“Every place is different, and democratically elected councils must be free to invest where it helps residents most,” Shah said.
“Councils have worked hard to provide recycling services that residents are satisfied with, and it is long overdue that producers of packaging pay for the disposal of the waste they create.”
Bank of England predicts EPR will increase food prices
The BRC said EPR will add ‘another inflationary pressure’ at a time when food prices are already rising.
The Bank of England projected food price inflation to rise to around 5% in the third quarter of 2025, driven partly by higher global commodity prices but also by labour costs and EPR.
Bank of England staff estimate that EPR could add a little over ½% to the level of food prices if costs were fully passed on to consumers.
85% of retailers also reported that the administrative and compliance burden they face has ‘increased significantly’ as a result of EPR.