Food industry bosses have united to launch a new appeal for the government to postpone the introduction of the extended producer responsibility ‘packaging tax’. EPR risked driving inflation for supermarket shoppers and producers, which would wreck the government’s growth agenda, they claimed.
With food inflation hitting its highest level in a year in May, the BRC warned EPR meant shoppers would be hit with another surge in inflation.
“It is no surprise that inflation is rearing its head once again,” said chief executive Helen Dickinson. Later this year, retailers face £2bn in costs from the new packaging tax, and there are further employment costs on the horizon from the implementation of the Employment Rights Bill.
“If statutory costs continue to rise for retailers, households will have to brace themselves for more difficult times ahead as prices rise faster.”
Meanwhile, a coalition of hospitality and drinks bosses has written to the prime minister and the Chancellor urging them to intervene to tackle the economic impact of the tax, with EPR bills due to land in October.
They have written to Keir Starmer and Rachel Reeves accusing Defra of overlooking the massive financial impact of he tax on pubs, restaurants and other hospitality businesses.
The coalition includes UKHospitality, the British Beer & Pub Association, British Institute of Innkeeping, Campaign for Real Ale, Society of Independent Brewers, The Wine & Spirit Trade Association, Independent Family Brewers of Britain, Federation of Wholesale Distributors, Cider UK and British Glass.
The letter said: “The sector and its supply chain is deeply concerned at the introduction of extended producer responsibility in its current form.
“There is a widespread belief that this legislation is being introduced far too quickly, and the financial burdens placed on businesses and their impact on growth, are not being acknowledged by Defra.
“While Defra has engaged with businesses and their representatives, the concerns of the sector have not been taken on board by Defra and as such, we are now raising these concerns with Treasury and Business & Trade, in the hope that you are able to listen to business concerns.
“EPR comes at a time when there are cumulative issues affecting the sector, including changes to employer National Insurance contributions.
“We do not believe that due regard has been considered to the full economic impact of this policy measure on investment and growth in the UK, and therefore efforts to alleviate them have been deprioritised.”
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