Retailers Warn That pEPR Costs Will Fall on Customers
Rising Costs Under the pEPR Scheme
The British Retail Consortium (BRC) has warned that as much as 80% of the costs from the Extended Producer Responsibility (pEPR) scheme for packaging will ultimately be passed on to customers.
Retailers already face significant financial pressures, with last year alone seeing an additional £5 billion increase in employment costs due to higher employer National Insurance contributions and the National Living Wage. With pEPR expected to add billions more in annual costs, the BRC says retailers have “little choice” but to transfer much of the financial burden to shoppers.
Compliance Pressures Increasing
It isn’t just the financial impact. A BRC survey found that 85% of retailers expect a sharp rise in compliance and administrative work under the new system. This includes detailed reporting on the composition and quantities of packaging placed on the market, adding another layer of complexity to already stretched businesses.
Andrew Opie, Director of Food and Sustainability at the BRC, noted:
“Retailers support the polluter pays principle and are making big changes to improve packaging. But the packaging tax is essentially a multi-billion pound levy being paid by consumers during a cost-of-living crisis. Unless funds are spent transparently and effectively, EPR risks becoming another burden on businesses without real benefits for customers or the environment.”
Will Customers Pay the Price?
According to Ecosurety’s Partnerships Director, Jon Brookes, how much cost reaches consumers will depend on brand owners’ pricing strategies. He suggested that EPR fees could also incentivise better packaging choices as companies seek to reduce liabilities.
At the same time, the Bank of England has identified pEPR as a likely inflationary pressure. Its modelling suggested that if retailers fully pass costs through, food inflation could increase by just over 1.5%.
Invoicing and Payments Begin This Autumn
Obligated producers, including retailers and brand owners, are now preparing to make their first payments. Defra will publish the final fee levels in October 2025, with invoices issued by PackUK, the scheme administrator.
Payments are due in November 2025 and are expected to total millions, with revenues allocated to local authorities across England, Scotland, Wales and Northern Ireland.
Calls for Ringfenced Spending
The BRC has urged the government to guarantee that pEPR revenues are legally ringfenced for use in household recycling collections and infrastructure. Without this safeguard, they argue, shoppers will be paying higher prices without seeing improvements in waste management.
The government has said that funding should indeed be ringfenced, with PackUK able to reduce future allocations if local authorities are found to misuse funds.
Brookes commented:
“EPR funds should be used to strengthen recycling systems, particularly collection, sorting, and reprocessing. The efficiency and effectiveness reviews planned by PackUK are a step in the right direction.”
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