“Fundamentally flawed”: Food industry calls for EPR implementation extension

14 Jun 2023 --- With economic and social headwinds driving up the UK’s cost of living, food manufacturers and retailers are lobbying the government to delay the country’s recycling reform, which would implement an “extended producer responsibility” (EPR) scheme from April 2024.

The British Retail Consortium (BRC) tells Packaging Insights that the current proposals are “unambitious.” Meanwhile, Ecosurety flags that the UK is not ready to implement the full system of EPR.

“The government must extend its timelines for EPR to ensure the necessary time to improve the UK’s abysmal recycling rates and create the world-leading recycling reforms we were promised,” says Helen Dickinson, chief executive of the BRC.

“The current proposals are unambitious and would see money wasted, as retailers – and their customers – pay for the recycling of materials that local authorities are not yet equipped to handle.”

Representing over 200 major retailers in the UK, the BRC wants the government to go “back to the drawing board” as it highlights little confidence in Defra’s current EPR proposals.

Furthermore, the Food and Drink Federation (FDF) took the Food and Drink Summit in Downing Street last month as a critical opportunity to underscore the need for the government and industry to join forces on driving down food and drink price inflation.

Chief executive of the FDF Karen Betts says: “The number 10 summit is timely. The food and drink sector has been under considerable pressure over the two-three years as we’ve grappled with the COVID-19 pandemic, Brexit, the war in Ukraine and the stark cost rises that have flowed from these.”

“We want the summit to forge a better partnership between the government and our sector, not least to address the highest food and drink price inflation in 45 years. There’s work to be done to unlock the huge potential of our sector to invest in technology, innovation, sustainability and future skills across the UK, which would enhance our global competitiveness, grow our businesses and deepen our resilience.”

The UK food and drink price inflation is at its highest in 45 years.Who foots the bills?
BRC argues that at an annual cost of at least £1.7 billion (US$2.14 billion) companies want a “world-class” new EPR scheme that significantly increases the use of recycled materials in new packaging as they try to meet their sustainability goals.

“To ensure the new system delivers better recycling performance, costs will likely be even higher than predicted,” Ecosurety’s innovation and policy director Robbie Staniforth tells us.

“If the UK wants to improve systems for recycling packaging, it is all but inevitable that more funding needs to go into the system. As it stands, producer funding will replace funds provided by taxation, which won’t lead to better performance.”

The FDF pinpoints three main areas of concern for businesses. Firstly, it says the “complex but much-needed” EPR recycling reforms will pile additional financial burdens on the industry, hindering its ability to maintain affordable consumer prices.

On labeling, the industry wants to see burdensome labeling changes scaled back, as these go beyond the requirements set out in the Windsor Framework. These “excessive” and costly changes will place undue strain on manufacturers and ultimately lead to higher prices.

Furthermore, FDF demands the reduction of post-Brexit frictions at UK borders to ensure a smooth flow of goods and ingredients. 

“The government must focus on how regulation is contributing to food and drink price inflation. Some regulation is inflating costs, not driving them down, where the same outcomes could be delivered in more effective and less costly ways,” states Betts.

“A lack of join-up between government departments and clarity in government teams developing regulation and post-Brexit trading rules, is forcing cost and complexity onto our businesses.”

EPR no-confidenceEcosurety stresses that packaging producers have no way to budget for 2024.
According to the BRC, the UK EPR scheme is fundamentally flawed. Without significant investment in recycling infrastructure in Britain, households in the UK could be footing the bill for EPR without any meaningful improvements to UK recycling rates – a prospect that has been absent in campaigning ahead of next month’s local elections, it states.

“The government’s haste to introduce a new system is undermining the system itself,” stresses Dickinson.

Furthermore, Ecosurety’s Staniforth says due to serial delays within the government, the UK is not ready to implement the full system of EPR. 

“The EPR reporting regulations have become UK law so producers will need to report the packaging they have placed onto the UK market in the first half of this calendar year by October 1. However, the system for calculating the fees associated with placing this packaging onto the market has not been published.” 

“Therefore, packaging producers have no way to budget for 2024. Furthermore, the government has not yet been clear about the service changes required within local authorities in line with the new system. Given the magnitude of operational changes that some councils may have to go through, it seems unlikely to think they will happen by next year.”

Staniforth adds that most other EU nations have already implemented EPR systems that have comparable costs to those predicted in the new UK system so ultimately things will settle down. High inflation levels mean that the timing of these new costs is suboptimal as it is most likely that increased costs are passed on to consumers, rather than absorbed by businesses.

“Critical changes must be made to plans for EPR, so it prompts vital reforms to drive up the UK’s low recycling rates. Defra’s plans are simply to tax businesses more without assurances on what this extra money will achieve,” concludes Betts.

By Radhika Sikaria