The BRC said the scheme represented a “significant financial burden” for the retail sector, coming on top of a £5 billion rise in employment costs last year due to higher employer National Insurance and the National Living Wage.
With pEPR estimated to cost the industry billions annually, the consortium argued there is “little room” for retailers to absorb additional fees without passing them onto shoppers.
Alongside the financial impact, 85% of respondents said they faced a sharp increase in administrative and compliance requirements under EPR, including reporting on packaging composition and quantities placed on the market.
Andrew Opie, Director of Food and Sustainability at the BRC, said: “Retailers support the polluter pays principle and are making significant changes to reduce and improve their packaging.
“But the packaging tax is also a multi-billion pound levy being paid by consumers during a cost-of-living crisis.
“Unless funds are spent transparently and effectively, EPR threatens to just be another burden on an already overtaxed industry with no tangible benefits for customers or the environment.”
Jon Brookes, Partnerships Director at Ecosurety, added: “Whilst individual pricing strategies adopted by liable brand-owners will ultimately determine the cost passed on to consumers, Ecosurety remain optimistic that – in addition to further recyclability incentives resulting from modulation next year – EPR fees will act to improve packaging credentials as producers seek to mitigate costs.”
pEPR fees to be invoiced this month
The findings follow warnings from the Bank of England, which highlighted pEPR as an inflationary factor for food prices.
The bank’s analysis suggested that if costs are fully passed through, the policy could add “a little over 1.5%” to food inflation.
Under the reforms, all obligated producers – including retailers and brand owners – will face base fee payments to PackUK, the scheme administrator.
These are expected to be invoiced in October 2025, following the publication of final fee levels by Defra.
Payments, many of which will run into millions, are due to be made to local authorities across England, Northern Ireland, Scotland and Wales in November 2025.
The BRC has called on government to legally ensure pEPR revenues are ringfenced for local authority waste services, with funds spent directly on household recycling collections and infrastructure improvements.
The government has said that the funding should be ringfenced, with PackUK empowered to reduce future allocations if evidence shows that funding has been used for other purposes.
Brookes continued: “We agree that EPR funds allocated to local authorities should drive tangible steps towards circularity and therefore be used to increase quality collection, sortation, and recycling of packaging waste. ‘Efficiency and effectiveness’ assessments, that will be carried out by PackUK, should go some way to ensuring this.”
Subscribe for free