As early Christmas presents go, the announcement that the industry’s EPR bills are set to rise by more than double the rate of inflation next year is a bit of a shocker.

With many companies still reeling from the first set of invoices, which landed in October, the last thing they wanted to hear was that the tab will be substantially higher next time around. But that’s the grim message industry leaders had delivered to them from Defra and PackUK bosses in briefings yesterday afternoon, as The Grocer exclusively revealed today.

A more charitable way of looking at things (it’s that time of year, after all) is that it’s something of a miracle for Defra to give companies 10 months’ notice to plan for extra costs coming down the track. And of course, if this second year of indicative fees are anything like the first year’s, they could also have a few more iterations to come.

But there are limits to how this can be dressed up in any way other than yet another painful pill for the industry to swallow. And that’s in a year dominated by the spectre of inflation and unwelcome regulatory costs.

Falling inflation rates

The irony of the timing will not be lost on the industry, with the government at last celebrating some good news thanks to today’s better-than-expected figure from the ONS, showing the UK’s inflation rate has fallen to 3.2% for the period covering the 12 months to November.

Against that, yesterday’s EPR estimates look even more eye-watering, with fees set to rise sharply next year across most categories. Those for rigid and flexible plastics are forecast to increase from £423 to £455 per tonne (up 7.5%) with glass rising from £192 to £205 (nearly 7%). Paper and card (7%), steel (11%) and fibre-based composites (14%) are other streams facing big hikes.

The other good news Defra and PackUK are understood to have given industry sources is that figures appear to show levels of packaging coming down as the impact of EPR makes its mark – suggesting it’s been more effective than the plastic packaging tax that preceded it.

If Defra can show EPR is already reducing the environmental impact of materials such as plastic, it will certainly be harder for the strategy’s critics to pipe up. But industry anger and a sense of unfairness won’t truly go away until the government can demonstrate that the money raised from EPR is being put to good use.

Next year is set to herald a shift towards greater industry sway in the running of the scheme. That means we can expect plenty of calls for further ringfencing measures, along with warnings that using the industry as a cash cow will inevitably come back to bite the consumer in the form of higher prices.

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