Talking to a number of our customers of varying sizes, it is clear there is a lack of awareness of two new pieces of packaging legislation coming into force in the next few years.
The UK is committed to advancing a circular economy which will see society keeping resources in use as long as possible, extracting maximum value from them, minimizing waste and promoting resource efficiency. These principles are wholly supported by industry. To achieve these goals, two major packaging waste policies are being introduced:
- Extended Producer Responsibility (EPR)
- Deposit Return Scheme – DRS
Note, packaging waste is either in-scope for EPR or DRS but not both.
We hope the following provides some key insights to raise awareness of the new regulations.
Extended Producer Responsibility (EPR)
Administered by DEFRA (Department of Environment, Food and Rural Affairs), EPR seeks to reduce landfill waste by holding brand owners financially responsible for the collection, sorting, and disposal of the packaging they place on the market.
It affects all products in all sectors; essentially anything with packaging.
It is intended to drive brand owners and producers to adopt more sustainable materials and to reduce packaging weight and volume, ultimately minimizing overall waste.
Most businesses will be liable for EPR:
- Businesses with a turnover over £1m and placing more than 25mt of waste on the market must be registered with DEFRA and report their packaging data but have no charges to pay.
- Businesses whose turnover exceeds £2m and who place more than 50mt of packaging waste on the market will incur fees.
EPR fees are weight-based by material type, e.g. glass, plastic, cardboard, paper etc. The funds raised will be paid to local authorities to fund household and public bin collections and municipal recycling centres.
Whilst pricing is yet to be finalized by DEFRA, the quoted range of EPR costs is significant and is expected to raise more than £2b annually. Many SME brand owners will not be able to absorb these extra costs and will have to pass them on in the form of higher prices.
Timescales are as follows:
- Eligible businesses should have been reporting data since 2023.
- Charges begin on 1 April 2025 with the charges based on the packaging waste placed on the market in 2024.
- Final fees are not expected to be published until June 2025, i.e. at least 2 months after the policy is due to come into force. This makes it impossible for businesses to plan or set confirmed pricing.
EPR is intended to cover the cost of waste collections from kerbside, municipal waste recycling centres and public bins. These waste streams are defined as household waste in the legislation. Trade waste is meant to be out of scope. However, to qualify as trade waste:
- Products must be supplied directly from producer to point of service
- Products must be designed specifically for trade use only
On point 1, DEFRA deems products sold through wholesalers to have lost custody of who the product has been supplied to. Therefore, virtually all products being supplied to out of home markets will unfortunately be deemed household waste. One solution would be to have wholesalers provide accurate sales out data; however current GDPR legislation prevents this. Many industry trade associations from across many sectors, together with DEFRA officials, are working hard to find an acceptable solution to this issue. However, even if a solution is reached, any changes to the scope will only affect charges from April 2026.
On point 2, DEFRA’s quoted examples are:
- A bottle of spirits labelled and served from an optic is deemed trade only. Spirits labelled normally will be deemed household waste.
- Kegs and bag-in-box products will be deemed trade waste and therefore exempt from EPR.
We would counter argue back to DEFRA, “when was the last time you went to a bar to order a gin & tonic and took the tonic bottle home?”.
Deposit Return Scheme (DRS)
DRS covers only aluminum and plastic drinks containers with a capacity from 150ml to 3ltr and is set to be implemented from 1st October 2027.
Brand owners/producers will charge a deposit on these containers, which will be passed along the supply chain and ultimately charged to the consumer. The consumer can redeem the deposit upon returning the container to a suitable return point via a reverse vending machine. (Could insert an infographic here?)
Any products that fall within the scope of DRS that end up in household or municipal bins will not be liable for EPR fees.
The scheme is to be set up and funded entirely by the drinks industry, set to cost hundreds of millions of pounds. Ongoing operating costs will be funded by producers being charged a ‘producer handling fee’ per unit. It is therefore likely that this will ultimately result in price increases for consumers.
Frobishers fully supports moving towards a circular economy and accepts there is never a good time to impose any new environmental policies that attract taxes on businesses. However, the introduction of EPR feels poorly timed given the challenges endured by the hospitality industry over recent years.
Businesses can adapt to new legislation, but success depends on clear, detailed communication—particularly on costs—well ahead of implementation. The lack of clarity, exemplified by DEFRA’s inability to confirm pricing until two months after EPR commences, makes it impossible for us to plan with our customers.
EPR represents a significant financial shift, reallocating the cost of household waste services to industry to increase local authority income. Unfortunately, this change is unlikely to result in reduced council tax bills for households.
While there is still great uncertainty about the details, this summary aims to provide a better understanding of both the policies, as well as the challenges all brands are facing when navigating a rapidly evolving regulatory landscape. Frobishers will share updates as soon as more information, particularly on costs, becomes available.