Consumers face an avalanche of price increases being passed on from supermarkets with the arrival of the first invoices for extended producer responsibility, a major new survey of retailers has shown.
Figures released today by the BRC say that more than 80% of he costs of the new packaging tax are likely to be passed on to consumers.
The new tax came into effect today and the BRC surveyed members to ask if they intended to pass the costs on, despite consumers already being hit by rising food inflation.
The survey found as well as the financial impact in prices, 85% of retailers said the administrative and compliance burden they faced had increased significantly as a result of EPR.
It said with firms now required to report extensive information on the composition and amounts of packaging they are putting on the market, it had created further pressure on businesses already grappling with rising costs and a heavy regulatory burden.
However, there was also evidence in the survey that EPR is already having a major impact on the amount of single-use packaging. Some 85% of retailers who responded said they intended to increase the proportion of sustainable packaging placed on the market, while almost 80% intended to reduce the total volume of packaging.
The new packaging tax is levied on any company that produces packaging bought and disposed of by households, including retailers and brands.
Supermarket bosses and manufacturers are calling for Chancellor Rachel Reeves to includes measures in her budget in November to mitigate the impact of the costs of EPR and other regulation and taxes brought in under Labour.
“With EPR set to cost industry billions, this new tax will be yet another inflationary pressure, at a time when food prices are already rising fast, with The Bank of England estimating that the policy alone will add 0.5% to food inflation,” said BRC director of food & sustainability Andrew Opie.
“Retailers support the polluter pays principle and are making significant changes to reduce and improve their packaging. But the packaging tax is also a multibillion-pound levy being paid by consumers during a cost of living crisis. They will ask: what are we getting for higher prices?
“Unless funds are spent transparently and effectively, EPR threatens to just be another burden on an already overtaxed industry with no tangible benefits for customers or the environment.”
No comments yet