The tax hike could cause shopping bills to skyrocket and alcohol prices could rise by 18p per bottle. Billion recycling collections that tax organizations to supply or import into the UK are expected to cost around £2 billion in the sector and pass on to consumers.
Food and Drink Federation estimates that the EPR (Extended Producer Responsibility) tax adds 12p to wine bottles, 6p to beer bottles, and 18p per bottle of spirits. EPR intends to reduce the amount of unsustainable packages. However, supermarkets say it could coincide with hiking in national insurance contributions without improving the use of sustainable packaging. Because collection taxes products based on weight, if there are few sustainable plastic packaging despite the low base rate of glass, you can actually face the lowest costs.
The Bank of England Economic Health Check said many companies “hopefully expect the impact of EPR to be similar to the impact of an increase in employer NICs.”
The UK Retail Consortium (BRC) estimates that it will add £2 billion of costs across the sector compared to an estimated £2.33 billion with an increase in national insurance contributions.
Marks and Spencer is projecting an EPR bill of £40 million. Its CEO, Stuart Machine, last month claimed that “it's 20 times the current amount, and it will go straight to the Treasury as a general taxation, and there will be no improvements in recycling.”
A supermarket boss said, “Current proposals treat it as a way of fundraising, many of which have completely inadequate facilities to handle waste packaging.”
BRC's Andrew Opie has concerns that taxes will not be spent on improving recycling.
He states: “This money is not surrounded by local government budgets, meaning when the government hands this money from a retailer to a local government, you don't have to sit on a budget that says it needs to be used for recycling.
“It's perfectly feasible to think of knowing where your budget is at the moment as spending this on something other than recycling.”
In November 2024, retailers called on Rachel Reeves to push back the EPR, and the previous 2024 launch date was already one time behind.
