Never off the agenda these days, packaging has suddenly risen back to the top of the priority action list with DEFRA publication (15th August) of the first set of illustrative fees for upcoming packaging Extended Producer Responsibility (EPR) scheme which will be imposed on packaging producers from next year.
The scheme was first mooted by the previous Government a few years ago and BHETA and its membership campaigned vociferously against its inequity until it was finally ‘kicked into the long grass’ by the Conservatives as being too controversial and unpopular with UK suppliers and retailers. But now with this latest DEFRA announcement, it seems EPR is back on the table, and it is therefore imperative that suppliers and retailers understand the implications and prepare themselves, while also gearing up for another BHETA lobbying campaign against the proposals.
In essence, the new EPR scheme is an additional tax, which targets product suppliers as well as retailers of own label goods. It represents a huge shift in financial responsibility for the treatment of household waste and waste packaging throughout its lifecycle, moving it 100% to suppliers of branded goods and retailers of own brand items. To date, the costs of kerbside recycling / disposal of packaging is split roughly as follows: 10% by producers through PRNs; 10% by retailers; 80% by the taxpayer through Councils. Under EPR, this will change to the whole cost of collection and disposal met by producers through modified PRNs. Producers affected and required to provide packaging data fall into the following categories:
- an individual business, subsidiary, or group – but not a charity
- with an annual turnover of £1m or more
- and are responsible for over 25 tonnes of packaging in a calendar year.
Organisations covered by the EPR will be required to report on the amount of packaging they put onto the market by 1 April 2025, beyond which fees will be calculated by the scheme administrator based on the amount of packaging brought into circulation during the previous calendar year. This will be the most significant change to Packaging Regulations, indeed the whole PRN system, for a generation. At BHETA we believe that the impact of the new EPR packaging taxes will be significant for UK producers – with anywhere up to a 30 or 40 times multiplier on existing Packaging PRN rates. Indeed, one BHETA member, a Small Domestic Electricals distributor has concluded that it is looking at £1.1m of additional costs.
BHETA’s plan of action on EPR – lobbying
BHETA has worked with Wastepack, who manages the Packaging Compliance scheme we recommend, to analyse the potential impact on suppliers, and encourages all suppliers and retailers to understand their EPR liability.
BHETA has used the results in its own lobbying campaign, targeting DEFRA and the DBT. In addition, all BHETA members are urged to contact both DEFRA and their local MP if they feel the impact of the new tax merits so doing. It is also providing an advisory pack to members to facilitate what is hoped to be a collective industry campaign for a more workable solution.
BHETA’s lobbying will be asking the Government to unpick the proposed legislation as it stands in favour of something more equitable, more practical, and more motivational for everyone involved. The current proposal seems to assume that producers make all the packaging decisions, ignoring the reality that they are often specified, so joint responsibility would be welcome and more progressive. EPR also suggests that only producers benefit from packaging, whereas the benefit is shared throughout the supply chain, from manufacturers to retailers to the consumer, through safe and secure transportation of goods, minimized waste due to breakage, clear communication of features and benefits, instructions on how to use products safely and efficiently, and so on.
BHETA’s plan of action on EPR – information and advice
BHETA has a series of webinars scheduled to advise members on the proposed legislation and packaging issues in general from different perspectives. These are:
- Tesco webinar – 4th September – retailer plans – green, amber, red update – and viewpoint going forward.
- Root webinar – 9th September – practical advice re packaging compliance and packaging development for the future including sustainability leadership.
- Wastepack webinar – 22nd October – EPR implications for compliance, reporting and potential cost.
The reality is that producers will be unable to absorb these additional costs on their own and as such they will be passed up the supply chain to retailers and ultimately to the consumer, adding to pressure on inflation.
In BHETA’s view, it is not only is it vital that suppliers begin to prepare now for both the rules and the new reporting, as well as looking to lobbying. BHETA’s campaign is not about denying the need for change – just achieving an equitable spread of the responsibility and cost.
Any supplier who would like more information on the BHETA campaign please contact Steve Richardson, Marketing Director, BHETA at sr@bheta.co.uk.