BHETA column

The problem with packaging

Will Jones, chief operating officer of BHETA warns supplier costs could rise tenfold due to proposed EPR legislation. He tells Tableware International more…

Supplier costs could rise tenfold thanks to EPR. This is a rallying cry not just to BHETA members but to all suppliers of tableware and kitchenware. Unless we are to bear additional costs – potentially up to ten times our current exposure – we all need to act now in relation to the UK government’s proposed Extended Producer Responsibility (EPR) (packaging sustainability) legislation. Not only is it vital that suppliers begin to prepare for the new rules and new reporting that will enable those rules, but it is also important we do what we can collectively to explore improvements to the legislative draft as it stands. This is why BHETA is not only advising members on the essential steps that every company needs to undertake as soon as possible, but it has also launched its latest lobbying campaign in November to address what I believe is inherent unfairness in the concept of EPR.

Unless we can collectively make our feelings as suppliers known, then we could be facing a few potential outcomes:

A) the proposed legislations stays as is and supplier cost for recycling increases tenfold.

B) suppliers attempt to share the burden with retail partners and deal with the resulting tough negotiations.

Set to be launched in the UK in 2024, Extended Producer Responsibility (EPR) is proposed legislation which will shift the burden of paying for recycling for the packaging of branded products from general taxation, retailers and suppliers predominantly to suppliers. This will be the most significant change to packaging regulations, indeed the whole PRN (packaging waste recovery notes) system, for a generation.

The principle underpinning EPR is that there will be a huge shift in financial responsibility for the treatment of waste packaging throughout its lifecycle, with producers picking up 100 per cent of the bill.

Currently, the costs for kerbside recycling / disposal of packaging from branded products is split roughly as follows: ■ 10 per cent by producers through PRNs ■ 10 per cent by retailers ■ 80 per cent by the taxpayer through councils

Under EPR in 2023, for payment in 2024, this will change to 100 per cent of the cost of collection and disposal met by producers through modified PRNs, something which is forecast to increase packaging PRN costs for suppliers between eight and ten times compared to 2021. EPR is currently set to be charged in the UK from 2024 based on levels of 2023 packaging.

Now, no one can deny the importance of packaging changes in the interests of sustainability and

What is EPR?

Set to be launched in the UK in 2024, Extended Producer Responsibility (EPR) is proposed legislation which will shift the burden of paying for recycling for the packaging of branded products from general taxation, retailers and suppliers predominantly to suppliers.

About BHETA

The British Home Enhancement Trade Association (BHETA) is the voice of authority on everything home improvement and home enhancement, including DIY, housewares, garden, small domestic appliances and home decor. It represents £5 billion at retail and 9,000 employees and brings together manufacturers, suppliers, retailers and opinion formers to drive growth at home and abroad. For more information about retailer and supplier co-operation, contact BHETA on 0121 237 1130, or email wj@bheta.co.uk, or visit the website at www.bheta.co.uk

No one can deny the importance of packaging changes in the interests of sustainability and the planet – it is simply the proposed methodology that is at issue

the planet – it is simply the proposed methodology that is an issue. For example, it is likely that in 2025 a modulated fee system is expected to be introduced to provide discounts depending on the environmental impact of the packaging placed on the market. Packaging that can be easily recycled will attract lower EPR fees compared to hard to recycle packaging. This will, therefore, provide financial incentives for producers to use more sustainable materials in their packaging. This seems like a positive, but we all need to bear in mind that for this to work, it is likely that more detail in the reporting of packaging will be required in 2024, in itself creating additional cost. Moreover, with reporting criteria set to be enhanced – possibly from 1 January 2023 - the minimum thresholds of turnover and packaging volume for small companies will be halved, so more small companies will have to pay.

Bearing this is mind, BHETA is advising members to review all packaging and carefully consider every bag, box and item to see if there is a way to remove, reduce or make it from more recycled and recyclable material. BHETA is also advising that as all suppliers will at some point be legally required to get a more detailed breakdown of the materials used in packaging, potentially in 2024. If a company is not already part of a compliance scheme, I urge you to calculate the volume of packaging your business currently deals with, as the minimum threshold for being required to pay under EPR is likely to half to 25 tonnes. BHETA’s own business service provider on this subject is Wastepack and for more information about joining a compliance scheme, contact paul.vandanzig@wastepack. co.uk.

In the meantime, BHETA is questioning the whole way in which the forthcoming legislation is drafted for suppliers and retailers. The question for the UK’s new environment minister is whether it would be sensible to review the overly complex draft guidance around Extended Producer Responsibility, in particular the huge cost burden this will place on suppliers.

This campaign and the advisory package that goes with it is not about denying the need for change. A more equitable spread of the inevitable cost and an achievable timescale is all BHETA is asking for.