Supermarket bosses today claimed the government’s emergency package of concessions over its controversial extended producer responsibility (EPR) strategy “falls well short” of what is needed to salvage the scheme.
A day after ministers published a host of changes to the scheme – including proposals for a producer-led organisation to take over running of the system from next year – retail bosses accused Defra of failing to come up with a proper plan to tackle concerns, including ringfencing the £2bn that will be raised from retailers.
Defra’s compromise
Yesterday, after months of frantic talks with food and drink sector leaders, Defra, alongside the devolved governments, unveiled a package of measures which it claimed showed ministers had “listened and responded” to feedback from across the packaging value chain.
As revealed by The Grocer, the compromise measures include PackUK launching a process to appoint a producer responsibility organisation (PRO) to run the scheme in October, announcing exemptions from EPR fees for “closed loop” recycling schemes, and bringing forward plans to allow mass balance accounting from 2029 to April 2027.
PackUK had already last week rushed out a revised version of the controversial new traffic light system, which will dictate how much producers are charged for different types of household packaging from next year.
While the moves were warmly welcomed by the FDF, which is spearheading a bid to run the PRO, they were blasted by the BRC as inadequate today.
“After seven years of development, today’s amendment still falls short of fixing the fundamental flaws in the extended producer responsibility (EPR) scheme,” said Andrew Opie, director of food and sustainability at the consortium.
Opie said that while Defra had promised to look at ways the four nations could support and strengthen the UK’s recycling infrastructure, there was still “no plan” in place to ensure the money raised from the tax was ringfenced.
“Without ringfencing, it remains a tax with no clear link between fees paid and improvements in recycling,” he told The Grocer. “We welcome progress on simplifying the Recyclability Assessment Methodology (RAM) and are supportive of a PRO to ensure businesses footing the bill have a real say in shaping an efficient and effective recycling system.
“However, with EPR set to cost retailers £2bn, we need to see further adjustments made to the scheme to ensure it delivers the improvement to recycling rates that businesses and consumers expect to see.”
Another retail source said: “After all this time Defra still failed to come up with a proper proposals for EPR.
“Local authorities will face no repercussions for providing an inefficient and ineffective service until 2028, and even then they still receive at least 80% of funding.
“More needs to be done and we welcome a proposal to address this fundamental issue with the scheme.”
EPR rethink
Stu Macdonald, founder of peanut butter brand ManiLife, who is leading a campaign for a rethink on EPR, also accused the government of failing to listen to concerns ahead of the introduction of EPR fees in October.
“After meeting with government a few times, whilst still hopeful a deal can be done the overarching feeling is frustration,” he said.
“It feels like blinkers are on and they are either blindly bludgeoning through or knowingly laying down the entire UK glass industry and hundreds of small businesses as sacrificial lambs, in pursuit of an EPR scheme – and ultimately money that they can’t raise from the big three taxes.
“There is no valid explanation for why UK glass EPR fees are in some cases 10 times their European counterparts, and the levers to bring down the fees, beyond vague nods to modulation next year, are unclear.
“Recent concessions enabling a route to business running the scheme instead of government is hopeful for the long term, but businesses need to survive the first phase. There seems little to no appreciation of the commercial realities of running a small business and the fact that most businesses do not have a few £100k spare to pay a tax they weren’t expecting and were told not to plan for.”
However, announcing its package of measures yesterday, Defra and the devolved governments claimed they had engaged heavily with industry before announcing the changes.
“We have engaged with and listened to stakeholders [whose] feedback has been instrumental in shaping these changes to deliver a more effective and efficient scheme,” said a letter to industry bodies setting out the changes.
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