John Lewis faces US$28.6M hit from UK’s EPR packaging levy

UK – The UK’s Extended Producer Responsibility (EPR) packaging scheme is hitting retailers hard, with John Lewis Partnership reporting a US$28.6 million cost in its first-half results. 

The retailer recorded a US$44.2 million loss before tax and exceptional items, up from US$6.5 million last year. 

Excluding one-off costs, losses reached US$114.4 million, driven by tech investments and the EPR levy. 

Waitrose, the supermarket arm, bore much of the cost due to its high volume of packaged goods. Despite a 4% sales rise to US$8.1 billion, these expenses outpaced revenue growth.

The EPR scheme requires businesses handling over 25 tonnes of packaging annually or with turnover above US$1.3 million to report packaging details and pay fees for waste collection and recycling. 

Costs vary by material recyclability, penalizing less sustainable options. Invoices begin in October 2025, but John Lewis has already accounted for the charge.

 “We’re adapting our packaging to cut future costs while navigating a tough economy,” said Chair Jason Tarry, expressing confidence in full-year profit growth.

Recent industry reports indicate broader impacts, with retailers like Marks & Spencer projecting annual EPR costs of up to US$52 million starting next year. 

The scheme pushes companies toward lighter, recyclable packaging to meet the UK’s circular economy goals. 

Retailers must now audit packaging, collaborate with suppliers, and explore mono-material or reusable designs to manage fees. 

Passing costs to consumers is challenging amid price sensitivity in competitive markets.

Meanwhile, the EU enforces similar rules under its Circular Economy Package, while Japan and South Korea have established producer responsibility frameworks. 

In North America, states like California and Canadian provinces are adopting comparable regulations. 

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