The Food and Drink Federation (FDF) has highlighted that costs proposed by government, in its second consultation on a new Extended Producer Responsibility system for packaging waste, have risen “drastically” to £2.7 billion.
The FDF “is the voice” of small and large businesses in the UK food and drink industry which it notes is the largest manufacturing sector in the country.
The £2.7 billion figure comes in the Department of the Environment, Food and Rural Affairs’ consultation document on a new EPR system for packaging waste which will replace the existing PRN system. Last autumn, Defra was suggesting that the costs would only be in the order of £1.5 billion, the FDF has noted.
Food and drink businesses are concerned at the costs of the proposed EPR system (picture: Shutterstock)
Now, Defra says: “Our revised estimates indicate that the annual packaging waste management costs that producers will be required to pay will be in the region of £2.7bn in the first full year of implementation, with £1bn of this related to packaging waste collected from households, £1.5bn for packaging waste collected from businesses, and £200m for the management of bin and ground packaging litter.”
Inflationary
David Bellamy, Senior Environment Policy Manager, Food and Drink Federation said: “While FDF and its members have long called for much needed reform to the EPR system, we have warned government that any changes to the system would need to be achieved in a manner that would not result in inflationary costs for businesses or consumers.
“Previously, the estimated cost to industry was £1.5 billion, which has now increased drastically to £2.7billion. The revised figures outlined in the impact assessment place the burden of this financial responsibility firmly on food and drink manufacturers along with other brand owners.
“Food and drink manufacturers want to be accountable for the packaging they place on the market and an effective and cost-efficient system has the potential to be an enabler for increased investment in recycling infrastructure.”
“This level of cost will have a wholly prohibitive impact on driving forward the investments needed”
And, Mr Bellamy warned that the cost of £2.7 billion could be detrimental to work on improving packaging design and recyclability.
He cautioned: “This level of cost will have a wholly prohibitive impact on driving forward the investments needed in packaging design and innovation to increase recyclability and lead to other improved environmental outcomes. It is clear a greater level of collaboration between government and industry stakeholders is needed in order to highlight the complexities involved in wider packaging reforms and to protect the financial sustainability of business.”
Defra stance
Defra has recognised there will be additional costs faced by producers although it has recently shied away from some of its original comments.
2019: “Much more expensive for producers”
2021: “Additional costs”
In 2019, the Department in its first Impact Assessment (page 54) directly conceded that the proposed new EPR system would be “much more expensive for producers”. It said that one of the system-wide benefits to the producer responsibility system included that “the reformed system will be much more expensive for producers as they will have to cover the full net costs of managing the packaging they place on the market once it becomes waste” with the benefit that this will encourage less packaging to be used.
Now, in its March 2021 Impact Assessment (page 54), Defra has toned down its wording, removing the reference to “much more expensive” and instead spoken of “additional costs on producers”.
SAVE THE DATE:
The Resources & Waste Strategy Revisited Conference is taking place online on 12 May 2021. This full day conference will explore responses to the consultations bringing local authorities and all aspects of industry together for essential information sessions, networking and discussions.
Find out more HERE.
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Source: letsrecycle.com Packaging
