UK retailers to raise concerns over new recycling scheme with ministers

British retailers and food producers will meet ministers on Thursday to raise concerns over a new recycling scheme costing £1.7bn a year, which they warn will lead to higher costs for consumers without benefiting the environment as intended.

Companies including Unilever, Marks and Spencer and PepsiCo have been invited to the meeting with environment secretary Thérèse Coffey, alongside trade groups such as the British Retail Consortium, the Food and Drink Federation and Industry Council for Packaging and the Environment.

Consumer groups’ executives have said the extended producer responsibility for packaging (EPR) scheme, which is due to take effect in 2024, is badly designed and will lead to higher costs without the desired environmental benefits.

As set out, the EPR scheme will apply to companies that supply packaged goods to the UK market under their own brand, import products in packaging, or sell non-UK made plastic products via an online marketplace.

Companies that fall under the EPR will be obliged to collect and publish data on the packaging supplied or imported and pay various costs before collecting official “notes” from reprocessors to confirm that packaging waste has been recycled.

The costs will include a waste management fee based on the weight of packaging, and a charge payable to the environmental regulator.

According to the environment department, the cost of handling household packaging waste — including collection, sorting, recycling and disposal — will be about £1.7bn a year. The FDF estimates that the charge, if passed on by producers, could add up to £60 a year to household bills.

In a recent letter seen by the Financial Times, the BRC and FDF urged Prime Minister Rishi Sunak to reconsider the plans. They told him the scheme would “significantly increase the costs of packaging, which, in the current economic climate, will increase prices for consumers, without seeing the desired increase in recycling”. The letter had broad support from retail and consumer goods groups such as Aldi, M&S and Wm Morrison.

Industry executives are concerned about the structure of the scheme, under which payments will be made to a publicly run scheme administrator, before being passed to local authorities to collect plastic waste and handle the recycling of packaging.

Retailers say the administrator should be run by the private sector, as in other countries, citing concerns over cost controls and investment in national recycling infrastructure, for which they say there is no guarantee that funds will be ringfenced.

The BRC said: “The current EPR proposals will lead to higher costs for households but will fail to deliver improvements in recycling that they should expect to see, and which retailers are committed to achieving.”

M&S called for the EPR charges to be tied explicitly to waste infrastructure improvements so that they did not push up food prices by becoming “another tax”.

“The current sequencing and implementation plans . . . are poorly thought through, add cost to businesses and customers and make no tangible difference,” the supermarket added.

The environment department said it had been “engaging closely with waste and packaging companies, manufacturers, national retailers, environmental organisations and local government to outline what could be required for future packaging reforms”.

The dispute follows concerns raised by industry over a separate bottle recycling programme to take effect in England, Wales and Northern Ireland in 2025, seven years after it was first announced.

The Scottish government has defended the rollout of its own “deposit return scheme” — which will enable consumers to redeem a deposit if they return plastic bottles to designated points — from August this year. But trade bodies have warned that the initiative will cut choice and disrupt trade.