The new UK packaging tax on food and drink, introduced under the extended producer responsibility (EPR) scheme, is being blamed by manufacturers for adding pence to the price of everyday goods and intensifying pressure on already high food inflation.
The levy, which sits alongside the plastic packaging tax, shifts most of the cost of managing household packaging waste from local councils to the companies that place packaging on the market.
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Industry groups say the measure has come at a difficult time, with input costs for ingredients, energy, transport and wages still elevated.
Environmental organisations and the UK government argue the reform is essential to tackle waste, increase recycling rates and accelerate a shift towards a circular economy.
How the UK packaging tax works
The EPR scheme applies to most consumer packaging placed on the UK market, including plastic, glass, aluminium, steel, paper and cardboard. Producers pay fees based on material type and the weight of packaging linked to their products.
The government expects the measure to raise more than £1bn annually to fund the collection and recycling of household packaging waste.
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By GlobalDataThe charge comes on top of the plastic packaging tax, which applies to plastic packaging with less than 30% recycled content.
Combined, the two policies require brands and retailers to balance recycled-content targets, material selection and the long-term recyclability of their packaging.
Food brands warn of rising costs and difficult choices
Several UK food and drink companies say their first EPR invoices are large enough that they must pass some of the cost on to shoppers. Sausage producer Heck reports an annual bill that equates to a few pence added to each pack.
Dessert brand Gü says the impact of the tax is significant for its glass ramekins and warns that weight-based fees could force a shift towards lighter materials.
Belvoir Farm, a drinks maker, estimates that the new charges have added around 25p to the shelf price of a 750ml bottle of cordial.
Retailers also expect substantial cost pressures. The British Retail Consortium has warned that the EPR scheme may cost businesses around £2bn a year, most of which is likely to be passed down the supply chain.
The Bank of England has noted that the system could add a measurable amount to overall food prices if companies pass on full costs.
For global packaging suppliers, these developments mean UK customers are now scrutinising pack formats more closely. Lightweight plastics, recycled PET, paper-based alternatives and refillable systems are receiving greater attention, although food safety and shelf-life requirements continue to limit rapid material changes.
Debate over inflation, recycling goals and scheme design
Environmental groups maintain that households have long carried the cost of packaging waste through council tax and say shifting responsibility to producers is necessary to drive better design, higher recycling rates and reduced use of virgin materials.
The scheme will evolve further, with recyclability-based “modulation” fees set to be introduced next year. Packaging that is easier to recycle will attract lower charges, while difficult-to-recycle materials will face higher fees.
Some industry voices warn that the focus on weight may produce unintended outcomes. Glass and metals typically carry higher per-tonne fees than lightweight plastics despite being widely recyclable, raising concerns that firms may switch to plastics to limit their tax exposure.
For international readers in the global packaging sector, the UK’s approach offers an early look at how extended producer responsibility and packaging taxes can shape inflation, supply chains and material choices.
Many markets considering similar reforms are watching closely to see how the balance between cost pressures and environmental objectives plays out in practice.
