Higher food costs due to EPR ‘unlikely’

However, Mrs Churchill said the decision will be “up to businesses to decide”.

Mrs Churchill was asked by Labour MP Geraint Davies if Defra had made any assessments as to whether the £2.7 billion system will impact food and drink businesses or increase food prices.

In response, the recycling minister said while a full impact assessment will be published next year, the department’s initial assessment has shown “this will not result in significant increases in consumer prices, including food prices”.

She said: “Under our proposals the cost of managing and recycling packaging waste will transfer from local taxpayers and others who deal with waste to the businesses who make and use packaging. Our initial analysis indicates that this will not result in significant increases in consumer prices (including food prices).

“However, it will be for the businesses in question to decide if they will increase prices, or improve and reduce their packaging”.

Higher costs

In May, compliance specialist Valpak predicted that the costs could push up the price of an average shopping basket of goods by up to 0.6%.

This is because while EPR reforms aim to hold obligated businesses responsible for the costs, it is likely that some impact will filter along supply chains down to consumers.

Valpak also predicted that the total cost of EPR over a year could add up to as much as £100 per household when you take the total costs outlined by the four governments and divide that by the number of households in the UK.

Retailers are also now facing pressures on supply chains and there have been repeated warnings of price increases from some of the major brands.

The £2.7 billion figure includes plans by Defra to transform the way packaging waste is collected from businesses, which has sparked concern (see letsrecycle.com story).

Over £1 billion of the estimated cost relates to household packaging waste management and its associated consumer campaigns, enforcement and administration, and the management of packaging litter. A further £1.5 billion relates to business and commercial and industrial packaging waste.