The association, which counts Budweiser, JD Wetherspoons and Carlsberg Marston’s Brewing Company as members, said the high PRN prices in 2022 led to an additional £21 million costs added to businesses.
According to the trade association, the extent of these costs rival those which its members are already facing with energy costs and inflation.
This comes on the back of already significant increases in 2021, “and yet they continue to go uncapped and to a large extent unnoticed by government”, it claimed.
Now the association is calling on government to “act as soon as possible to mitigate further extreme costs being piled onto businesses”.
We need intervention from Government on PRNs now
– Emma McClarkin, British Beer & Pub Association
‘Extreme’
Emma McClarkin, chief executive of the British Beer & Pub Association, said 2022 was a “year full of challenges and without some form of intervention”, this will be replicated.
She said: “Extreme PRN costs had a huge impact on our sector last year compounding significant increases in 2021 and yet they continue to go uncapped and to a large extent unnoticed by Government. This is a market that is out of control and silently damaging many of our much-loved brewers’ businesses.
“When combined with the additional costs of a deposit return scheme and extended producer responsibility reforms these businesses will soon have to deal with, it is evident the financial and administrative burden on the sector will be soon become too much for many who are also tackling with staff shortages, vast energy prices and inflationary cost pressures. We need intervention from Government on PRNs now, not in a year’s time.”
Prices
The PRN market has seen record highs in recent years, in particular for glass and plastic. Plastic PRNs exceeded £400 in December last year and were approaching £600 in January.
Glass meanwhile remained above £100 for large parts of 2022. In 2019, by comparison, they peaked at £30. Going further back to 2017 they rarely went above £15.
This has been put down to a myriad of factors. Some say concerns such as higher energy costs, Environment Agency crackdowns and Chinese lockdown reduced the availability of PRNs or export PERNs last year which increased demand and prices.
Producers however, have been left reeling as their compliance costs have risen at a time when other costs are rising too.
‘Broken system’
Paul Davies, chief executive officer of Carlsberg Marston’s Brewing Company, said: “In the PRN market’s current form, the UK brewing industry is having to grapple with a broken system for packaging sustainability that is, frankly, unsustainable. The fragile recovery our sector has achieved following the grave challenges of the past few years is threatened by the massive increase in PRN costs we have experienced, with the grim possibility prices could go up even further.
“Carlsberg Marston’s Brewing Company shares our industry’s strong sense of responsibility to work towards greater sustainability. To achieve this, we urgently need action from Government to build a system that is fair to everyone involved.”
Compliance
The high price of PRN prices was seen as a factor in some companies not complying in 2021 and there are some expectations that this might happen again for 2023
In June 2022, the Agency confirmed that seven direct registrants failed to meet their 2021 packaging obligations (see letsrecycle.com story). This compares with just two direct registrants failing to comply across the previous three years.
However, the penalty for not complying has so far not been revealed by the Environment Agency.
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