Will Burnham fix the ‘alphabet soup’ of packaging policies?

With all eyes on the first Andy Burnham budget next month, pressure is mounting on the PM to order a major overhaul of the UK’s packaging regulations, amid growing anger over the huge financial burden on food and drink companies.

Less than a year after the first invoices of the extended producer responsibility (EPR) regime, critics claim it’s time for ministers to axe the “confusing” bombardment of different taxes and fees contributing to crippling industry costs. The Grocer revealed that Defra, as well as the devolved governments, were considering taking “mitigating action” over a shortage in supply of Packaging Recovery Notes (PRNs) and soaring fees caused by changes earlier this year to how companies report tonnages of reprocessed and exported packaging.

The spiralling fees have ratcheted up calls for the system to be scrapped.

Within days of those revelations, new figures showed the plastic packaging tax (PPT) was failing to reduce levels of single-use plastic, despite raking in £250m for the Treasury.

So is it time for Burnham to create a simpler system, or are there dark tactics at play from industry-vested interests?

Under UK packaging waste laws, all producers with a turnover above £2m that handle more than 50 tonnes of packaging a year must buy plastic PRNs – certificates that verify the waste has been recycled or reprocessed in proportion to the amount of plastic packaging they put on the market.

But changes this year which saw reporting switched to a monthly basis rather than quarterly, and stricter requirements on accreditation and compliance intended to counter concerns over transparency and risk of fraud, have seen associated costs more than treble in some cases.

BRC analysis shows the average price per tonne for plastic PRNs has doubled from £180 in 2025 to over £370 in 2026.

Retailers and suppliers are calling for the “outdated” system to be scrapped and rolled in with EPR.

The BRC claims retail faces a £100m rise in PRN bills this year. It also says the PRN market has been “plagued by a lack of transparency and extreme price volatility” since its introduction in the 1990s.

Andrew Opie, BRC director of food and sustainability, describes the system as “outdated, inefficient, and completely unnecessary”.

“Rather than charging retailers – and ultimately consumers – three separate times on the packaging they use, government should streamline this process and run recycling through its flagship EPR scheme,” he says.

“Furthermore, if they want to make a real difference to UK recycling rates, EPR funds must be ringfenced, guaranteeing money raised is used by local councils to create and operate a world-class recycling system.”

The FDF is also demanding changes. “With EPR, DRS, PRNs, and PPT, we’ve ended up with an alphabet soup of complex and expensive packaging policies, which all require significant cost and resource,” Balwinder Dhoot, FDF director of growth and sustainability, tells The Grocer.

Kathryn Partridge, Carlsberg Britvic VP of corporate affairs and sustainability, says: “The current situation is untenable. It essentially comprises multiple overlapping policies, not all of which have remained fit for purpose, and simply doesn’t deliver – for business or for consumers.

“As the drinks industry focuses on preparing for the UK-wide deposit return scheme next year, it’s incumbent on this government to take a fresh look as soon as possible.

“We need a holistic review of all the packaging legislation UK businesses face, leading to an integrated system that works.”

The PRN crisis follows last year’s bailout of the EPR system by the Treasury after the fees collected in its first year by administrator PackUK fell short of the government’s estimated target by tens of millions.

It also comes with Defra and devolved governments set to launch a new consultation later this year on recycling obligations, including what should happen with the PRN system.

The system has been at the centre of extraordinary rows. In May this year, a newsletter sent out by a founding member of UK Packaging PRO, the FDF producer-led body charged with helping the government run EPR, declared 2026 would be the last year of PRNs.

The newsletter was sent by the Industry Council for Packaging & the environment (Incpen) and subsequently withdrawn, but not before infuriating compliance schemes and the Recycling Association.

Yet one sustainability insider tells The Grocer vested interests are at work in the chaos, and claims the remit of the looming consultation has been deliberately misinterpreted by those who want fees scrapped.

“Replacement of the PRN system is not in scope and it’s not the case that Defra has decided to consult to see if it’s still needed, despite what the lobbying is saying,” says the source.

“Some are deliberately misinterpreting Defra’s words to make it seem like a big policy change is being considered, when it simply isn’t.”

To add to the maelstrom, as one row rages, another key element of packaging regulation faces further criticism.

The latest HMRC figures show that more than five years after it was introduced to drive down the amount of single-use plastic, the effectiveness of the government’s plastic packaging tax (PPT) is “stagnating”.

Of the plastic packaging manufactured in and imported into the UK in 2025/26, more than a third (37% ) failed to contain at least 30% of recycled plastic, making it liable for the tax, with the figure down just one percentage point from last year.

This has sparked renewed calls for the government to rip up PPT as well.

Talks were held with the Treasury earlier this year over pausing the tax amid war in the Middle East, but industry hopes of such a move waned as a forecasted impact on shop prices was recalculated downwards.

Industry at loggerheads

And with every push from one quarter of industry, there is pushback from another. While bodies like the BRC and FDF want the “triple whammy” of regulations to be scrapped, others want ministers to ramp up elements of the taxes to speed up progress on plastic.

Waste services giant Biffa has made calls for ministers to introduce an escalator so the tax would rise to cover any items that contained less than 50% of recycled plastic, arguing it could generate £100m a year in extra tax revenues.

David Gudgeon, head of external affairs at circular economy specialist Reconomy, is also among those calling for a tightening of the tax screw, arguing for targets of between 75% and 100%.

“We would urge the government to follow the EU’s lead by introducing mandatory minimum recycled-content requirements for plastic packaging,” he says. “This would create more predictable demand for recycled material, providing certainty for recyclers and processors.”

For a plastics system that works, one point many would agree on is the need for investment in reprocessing facilities. But there is increased concern this will be hit following Westminster’s delay in July to the start of mandatory kerbside collection of soft plastics in England until 2030, three years later than previously scheduled.

Amid such a tangle, there seems slim chance of Burnham unravelling the mess in the budget, and slimmer still of his achieving anything like consensus in doing so.