UK households face new 'packaging tax' on four everyday items

A new packaging tax will apply to soft drinks and beer, with the cost of everything from drinks to home appliances likely to increase.
-Credit: (Image: Reach Publishing Services Limited)


A packaging tax will raise the price of many everyday items, UK companies and firms have said. A new packaging tax will apply to soft drinks and beer, with the cost of everything from drinks to home appliances likely to increase.

The Department for Environment, Food and Rural Affairs said it was in talks with the glass industry to discuss ‘workable approaches’. Pev Manners, the managing director of the cordial maker Belvoir Farm, said the preliminary cost for glass in the extended producer responsibility (EPR) for packaging was “nuts”.

The EPR, which comes into effect next year, shifts the cost of household recycling from councils back on to the companies using the packaging. Based on the highest cost scenario covering the fees would add 25p – the equivalent of a 10% price increase – to a bottle of its elderflower cordial.

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“Last year, we turned over £21m and made £900,000 profit,” he said. “My finance director estimates this tax will cost us £850,000 next year, so 100% of our profits.” Defra said the EPR was a “vital first step in cracking down on waste as we move towards a circular economy, and we have always been clear these fees are our initial estimates … We are continuing to meet with the glass industry to discuss more workable approaches, including for how we calculate the cost of glass.”

“At retail we think the EPR will put between 18p and 25p on a 750ml bottle because the grocers will just see it as part of the cost, add their profit margin and then put VAT on top,” Manners said. The British Home Enhancement Trade Association, which represents DIY, garden, housewares and small electricals suppliers, said the “EPR tax will lead to price hikes across all manner of consumer goods”.

Will Jones, its chief operating officer, said: “Producers will be unable to absorb these costs and will either have to pass them up the supply chain to retailers and ultimately consumers, adding to pressure on inflation, or implement damaging cost cutting measures in their business potentially leading to job losses.”

A full list of goods impacted includes soft drinks, beer, kitchenware and small appliances.