Ministers confirmed the £2 billion packaging levy will remain in place, keeping the Extended Producer Responsibility (EPR) scheme active. EPR requires food manufacturers and online sellers to pay fees based on the packaging materials used. Around 80% of these costs are passed to shoppers through supermarket receipts. Industry estimates indicate the typical UK household pays an extra £50 each year due to the scheme. The Bank of England warned EPR adds roughly 0.5 percentage points to food inflation. Food inflation could rise further, with overall inflation forecast to reach 6.2% by early 2027 and food prices potentially increasing by up to 7%. Packaging charges are also set to rise later this year, including average 19% increases for coffee cups, soup containers, and juice cartons, and 15% increases for plastic packaging. EPR revenue goes to local councils for general services rather than being required for recycling programmes.
"The Extended Producer Responsibility scheme, known as EPR, requires food manufacturers and online sellers to pay fees on all packaging materials used in their products. Shoppers bear the brunt of these charges, with around 80 per cent of the costs ending up on till receipts. The typical UK household is now paying an extra £50 each year as a direct result of the scheme, according to industry estimates."
"The Bank of England has warned that EPR is adding roughly 0.5 percentage points to food inflation on its own. With the central bank forecasting that overall inflation could climb to 6.2 per cent by early 2027, and food prices potentially surging as high as seven per cent, the timing of the government's decision to retain the levy is particularly difficult for struggling households."
"Further price rises are on the horizon as packaging charges are set to increase later this year. Levies on coffee cups, soup containers and juice cartons will jump by an average of 19 per cent, while fees on plastic packaging are due to climb by 15 per cent."
"The revenue collected through EPR goes to local councils, which can spend it on general services such as social care, planning and education rather than being required to direct it towards recycling programmes. Beyond the immediate impact of the packaging tax, households face lasting pressure on their weekly shop from global forces that show no sign of easing."
#uk-food-inflation #packaging-levy-epr #household-cost-of-living #supermarket-prices #local-council-funding
Read at London Business News | Londonlovesbusiness.com
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