FPA slams UK’s EPR exemption for small businesses

UK – The Foodservice Packaging Association (FPA) has voiced strong opposition to the UK government’s decision to exempt small businesses from Extended Producer Responsibility (EPR) fees for packaging. 

The ‘de-minimis’ exemption excludes producers with an annual turnover below US$2.5 million and handling less than 50 tonnes of packaging from EPR cost obligations. 

According to Defra minister Mary Creagh, this policy shields approximately 70% of small producers from the financial burden of EPR fees, aiming to ease pressures on smaller enterprises.

Martin Kersh, FPA’s executive director, expressed concern over the exemption’s impact on larger firms. 

“The EPR burden on our members grows with every small business exempted, effectively forcing them to subsidize smaller competitors,” he stated. 

Kersh highlighted that an estimated 10% to 15% of businesses reliant on packaging benefit from this exemption, creating an uneven playing field. 

He called for transparency on the exact number of exempted businesses to assess the policy’s full impact.

With 1.16 million UK businesses operating below the US$2.5 million turnover threshold, Kersh noted their significant economic contribution. 

However, he argued that many of these businesses, including some with high profitability, rely heavily on packaging. 

He suggested that if small firms are acquired by larger ones, the new owners should cover past EPR fees avoided during their growth phase. 

Kersh emphasized that all businesses using packaging should bear EPR costs, as these are now integral to operating in the sector.

The EPR scheme, effective from January 2025, shifts the cost of managing household packaging waste from local authorities to producers. 

Large producers with over US$2.5 million in turnover and handling more than 50 tonnes of packaging must report data biannually and pay waste management fees starting 

October 2025. Small producers face lighter reporting duties but are exempt from disposal costs, prompting FPA’s concerns about inequity.

Meanwhile, a report by a leading packaging news outlet highlighted British Glass’s criticism of EPR fees, particularly for heavier materials like glass, which could face levies up to 10 cents per bottle, potentially driving brands toward less recyclable alternatives like plastic. 

This could undermine the scheme’s environmental goals, with critics urging the government to reconsider its approach to ensure fairness and sustainability across the packaging sector.

The FPA’s critique underscores broader tensions within the industry as businesses navigate the financial and operational challenges of the new EPR regulations. 

While the government aims to foster a circular economy, the exemption policy continues to spark debate over its economic and environmental implications.

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