Small businesses 'will go bust' if current EPR scheme goes ahead

Premium soft drinks maker Fentimans has warned that it might have to close down its operations if current government proposals for extended producer responsibility (EPR) go ahead.

Under EPR legislation, packaging producers will have to pay the full cost of dealing with their packaging when it becomes household waste. At first, fees will be based on material type and weight. In the future, they will also consider the recyclability of the materials, with higher rates for unrecyclable or hard-to-recycle packaging.

The proposed tax has sparked a backlash from brewers and soft drinks manufacturers, who argue that the additional costs will place an undue burden on the industry.

Last month, the Department for Environment, Food and Rural Affairs (DEFRA) published estimates for the cost of recycling of glass under the scheme at up to £300 per tonne.

Fentimans CEO Ian Bray said, “As a SME in the soft drinks sector that relies heavily on glass packaging, I know I’m not alone in being deeply concerned about the soon-to-be-introduced Extended Producer Responsibility (EPR) scheme, and what this will mean for other British businesses like us.

“Fentimans will always support sustainable practices and the principles behind the EPR scheme. However, in its current form, the EPR proposals unfairly impact glass when compared to other packaging materials such as plastic and aluminium, and we believe urgent intervention is needed.

“The current indicative EPR base fees, calculated based on the weight of packaging materials, place a disproportionate burden on the glass industry compared to other materials. These fees are much higher than we expected, and implementation without revision will be devastating for our business and will lead to investment being diverted outside the UK.

“Plastic and aluminium are due to be part of the incoming DRS (Deposit Return Scheme) in October 2027 but will not be subject to EPR fees in the meantime, meaning they benefit from an additional two years without waste policy costs which will further incentivise material switching.

“To avoid the decimation of soft drinks in glass, the Government must delay the introduction of EPR to keep it in line with the introduction of DRS as originally intended, as this will restore some cost parity between glass and other beverage packaging materials. We are urging DEFRA to adopt a units-based approach to avoid jeopardising the glass industry; EPR in this current form is not a material-neutral policy.

“It’s crucial that DEFRA avoids market distortion through EPR and develops a more equitable and competitive market for all packaging materials. We call on the government to consult further on the EPR fees, and to delay the introduction of EPR in line with the DRS introduction.

“If the Government moves ahead with these plans as they stand, small businesses like ours will go bust. Fentimans has been selling quality soft drinks since 1905, it would be tragic if this inequitable policy destroyed our business after 120 years, just because it hasn’t been carefully thought through.”

The British Beer and Pub Association has also called on Environment Secretary Steve Reed to reconsider the tax. The association estimates that the tax could increase costs by 3p to 7p per bottle for the 3.2 billion bottles of beer sold annually in the UK, equating to an additional £84m to £212m – a beer duty increase of between 8 per cent and 21 per cent.

Emma McClarkin, Chief Executive of the British Beer and Pub Association, said last month, “These estimated fees provide long-overdue clarity, but they sharply reinforce our concerns about the eye-watering additional costs brewers will be expected to bear from next year and the impact on customers.”

Defra meanwhile has defended the proposed measures, describing them as a crucial step towards reducing waste and advancing a circular economy.