As exclusively revealed by The Grocer on Wednesday, the govenment has announced a bailout for restaurants, pubs and hospitality businesses falling under its controversial EPR packaging tax.
Packaging tax fees for glass are set to be slashed by up to 40% in a controversial government bailout of its under fire Extended Producer Responsibility (EPR) system revealed today.
The changes also mean glass drinks containers being sold directly from producers to pubs, restaurants, and other licensed hospitality venues will no longer be liable for EPR fees from April 2027.
Here is how the industry has been reacting to the news.
Nick Kirk, executive director of British Glass:
“Today’s announcement is a welcome sign that government has listened to the concerns of UK glass manufacturers and recognises the importance of maintaining a strong domestic glass industry.
“The proposed changes begin to address some of the unintended consequences of EPR and better recognise the environmental benefits of glass. The planned update to the glass material value, the proposed acceleration of modulation factors and the commitment to review future fee structures all move the system in a fairer direction.
“We also welcome measures to address the treatment of glass packaging supplied to the hospitality sector. While we need to understand the full impact of the proposed exemption, it is encouraging to see government recognising the challenges facing hospitality businesses and taking steps to avoid unnecessary costs.
“We particularly welcome the forthcoming calls for evidence on modulation and reuse. We hope this marks the beginning of a broader shift towards a packaging system that rewards circularity and real recycling outcomes.
“Today’s announcement is a positive step not only for glass, but also for other highly recyclable materials such as metal and paper packaging that play an important role in supporting a more sustainable UK packaging system.
“However, this must be the start rather than the end of the process. Glass manufacturers are making decisions on investment, production and jobs now. Alongside these reforms, further action is needed on industrial energy costs, decarbonisation funding, fair trade and wider packaging policy to ensure UK manufacturers can compete and grow with confidence.”
Balwinder Dhoot, FDF director of sustainability and industry growth:
“These proposed changes will help bring down the cost of glass, which will be welcome to manufacturers that have invested in glass packaging as a more sustainable choice.
“However, the very nature of the scheme means this change will simply push costs elsewhere. Fee modulation may lower charges for glass, but it won’t reduce the total cost to producers – it simply redistributes those costs to different packaging materials and at very short notice to businesses that hadn’t prepared for this extra fee. For manufacturers that use flexible plastic this is a further blow on top of Defra’s decision to delay kerbside collection of those materials for recycling. They will face higher EPR fees for infrastructure failings outside of their control.
“Our sector is investing billions in this scheme, in exchange for greater investment in recycling infrastructure to drive a circular economy for packaging. Government must focus on a stable EPR scheme and ensure industry’s investment drives actual improvements in recycling and brings the overall cost of the scheme down.”
Miles Beale, chief executive, Wine and Spirit Trade Association:
“At last. We welcome that a Burnham-led government has listened to UK businesses and to WSTA campaigning over the last two years. A reduction of up to 40% in glass fees over two years is a late, but welcome correction – and brings the UK scheme more in line with similar ones in other countries.
“This is not a controversial announcement. It simply rights the wrong-headed approach of the last two years. Our members have been increasingly concerned over mounting costs, which could have put people out of business if the fees were not brought down.
“The U-turn is also a much-needed win for pubs, bars and restaurants, who will no longer have to pay glass fees for purchases directly from producers. This is good news for the wine and spirit sector, which accounts for 50% of all glass drinks containers on the market.
“Well done and thank you to the WSTA’s Freddie Joosten who, with other dedicated colleagues in British Glass and others, have got this win over the line.”
Andy Bagnall, director general, British Soft Drinks Association:
“Tackling double-charging for drinks containers supplied directly to hospitality is a significant first step towards addressing the unfair packaging costs our industry has faced for several years under Extended Producer Responsibility.
“Soft drinks businesses take the responsibility for recycling the packaging they place on the market seriously, and a successful EPR scheme can increase recycling rates and reduce waste, but unfair allocation of costs undermines its effectiveness. We look forward to working closely with Defra on a solution for indirect supply that builds on the ratio-based approach announced today.”
Naomi Brandon-Bravo, head of sustainability and supply chain, British Retail Consortium:
“Today’s announcement will frustrate retailers, who have spent years planning for a gradual change to fees under eco-modulation. It is unacceptable for government to keep shifting the goalposts on EPR. First, it paused kerbside collections of flexible plastics, and now it is increasing fees faster than planned, with little improvement in UK recycling rates, despite billions being invested.
“If government wants to reduce packaging and increase recycling, it must ringfence EPR funds for improving the recycling system and provide businesses with the certainty they need to plan and invest.”
Emma McClarkin, chief executive, British Beer and Pub Association:
“Across the beer and pub sector there will be much relief that the government will reduce the costs of glass packaging fees and is also seeking to end the pernicious double-charging that has been unfairly affecting Britain’s cherished pubs.
“The direction of travel will be warmly welcomed, but it is essential that the long-term cumulative impact of the UK’s packaging policies is taken into consideration if we are to have a prosperous beer and pub sector in every postcode.
“These measures could reduce cost pressures on Britain’s brewers by tens of millions. However, it is vital that the 12,000 publicans that run leased and tenanted pubs as SMEs are also included, as otherwise over a quarter of Britain’s pubs will not benefit equally from this important change.
“We look forward to working closely with government in building on these important changes, which are a clear signal of intent to reduce the costs of doing business for the brewers and pubs that sit at the heart of local communities throughout the country.”
Charlotte Harrington, CEO, Belu Water:
“We welcome the government’s changes to EPR and its willingness to listen to the concerns raised by the glass and hospitality sectors. This is an important step, and one we have been calling for since the scheme was introduced. We hope today’s announcement marks the beginning of a wider rethink, rather than the end of the conversation.
“While these changes help address some of the scheme’s unintended consequences going forward, they do not undo the costs already incurred by businesses. For Belu, we face £1.1m in EPR-related costs over two years. That is money that would otherwise go directly to WaterAid to support clean water, sanitation and hygiene programmes around the world.
“There is an obvious contradiction in exempting charities from EPR disposal fees while imposing these costs on social enterprises whose profits exist to fund those same charitable outcomes. Belu gives 100% of its net profits to WaterAid, yet the scheme makes no distinction between our social purpose and that of a conventional commercial business.
“Today’s announcement shows that the government is willing to address unintended consequences in the scheme. We’re asking it to do the same for social enterprises, so that businesses like Belu are not unfairly penalised for putting purpose at the heart of their business.”
Jason Galley, director and chief executive, Metal Packaging Manufacturers Association:
“Nobody should be paying twice, but there is a further consequence of Defra’s decision that MPMA has repeatedly raised with policy officials. Removing EPR costs from glass packaging does not make those costs disappear, instead they will simply be redistributed across other packaging materials.
“Because steel is denser and heavier, the steel food can will shoulder a disproportionate share of that additional burden. This will widen the already perverse EPR fee differential between steel food cans and competing plastic and fibre-based composite packaging formats, putting steel at an even greater disadvantage.
“The consequences extend beyond packaging competitiveness. This decision will have a damaging impact on the role the steel food can is able to play in supporting UK food security, national resilience and emergency preparedness, including the government’s own ‘Be Ready’ campaign.
“It’s another spectacular own goal by Defra at a time when sovereign resilience is the focal point of government intent.”
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