​How Will the Glass Tax Impact Wine and Soft Drinks?

The UK's Extended Producer Responsibility (EPR) scheme, set to come into force this year, aims to shift the financial responsibility for packaging waste management from local councils to producers. While the initiative targets sustainability and improved recycling, it has significant cost implications for businesses and consumers. Among the most brutal hit are producers of glass-packaged products, including wine, spirits, and soft drinks.

Under the new system, the cost of a bottle of wine could rise by 10p, while spirits will face an even steeper increase of 12.2p per bottle. Consumers can expect a 6.6p hike per unit for soft drinks in glass bottles. Defra (the Department for Environment, Food and Rural Affairs) estimates that 80% of these new costs will be passed directly to consumers.

Glass vs. Plastic: An Uneven Playing Field

While glass-packaged products face immediate cost increases, producers of soft drinks in plastic bottles and cans have secured a temporary exemption from the scheme. This exemption, lasting until 2027, has prompted criticism from glass producers, who feel the system unfairly disadvantages them.

Pev Manners, Managing Director of Belvoir Farm, noted that the EPR scheme could cost his company £750,000 annually, wiping out up to 80% of its profits. "We've been using glass for over 40 years and will never switch to plastic. But this scheme rewards those using plastic and cans. We need a level playing field," he said.

Ian Bray, CEO of Fentimans, echoed these concerns, warning that the scheme would exacerbate inflation and hinder economic growth. "Combined with rising employer costs, it's simply too much at once," he said.

Industry Concerns: Costs, Clarity, and Timelines

The financial burden is only one of the challenges associated with the EPR scheme. Defra's cost estimates for glass packaging have fluctuated dramatically, ranging from £115 per tonne to £330 per tonne before settling at £240 per tonne. This lack of consistency has left businesses struggling to plan for the future.

Miles Beale, Chief Executive of the Wine and Spirit Trade Association (WSTA), expressed frustration over what he described as poor communication and inadequate consultation. "Our industry is the biggest user of glass, which is infinitely recyclable. This scheme could work, but it needs proper planning and organisation," he stated.

Beale also highlighted the unclear definitions of "household waste" and "non-household waste" under the scheme, adding further uncertainty for businesses trying to comply.

What's Next for the EPR Scheme?

Defra recently launched PackUK, the newly appointed EPR scheme administrator. PackUK's role includes setting fees, collecting producer payments, and allocating funds to local authorities to enhance recycling services. Dr Margaret Bates, head of PackUK, emphasised the importance of collaboration, stating, "We aim to deliver a fair and effective scheme to address packaging waste and support sustainability."

While the government has delayed some EPR costs until 2025, many businesses call for further postponements or revisions to ensure the scheme's success. The Wine and Spirit Trade Association, among others, has lobbied for a revised approach, arguing that the current timeline and structure are unworkable.

Balancing Sustainability with Economic Viability

The EPR scheme highlights the UK government's commitment to environmental sustainability, but its execution raises questions about fairness and economic impact. With rising costs set to affect both businesses and consumers, there is growing concern over whether the scheme can achieve its recycling goals without stifling economic growth.

As the October billing deadline approaches, businesses, particularly in the glass-packaging sector, are bracing for financial strain. Meanwhile, calls for government transparency and a more level playing field continue to grow louder.