The UK’s Extended Producer Responsibility (EPR) regime, which took full effect in October 2025, and the Plastic Packaging Tax (PPT), introduced back in April 2022, signals a decisive move towards a circular economy. Broadly, these regulations seek to embed the ‘polluter pays’ principle and create strong financial incentives for businesses to innovate by designing fully recyclable packaging, reducing material usage, and minimising landfill waste.
For the food and drink sector, one of the most packaging-intensive industries, these regulations continue to bring significant regulatory and commercial implications.
Many businesses in the sector may not be fully aware of the current scope of these regulations and some of the changes that we are likely to see over the next couple of years.
Staying ahead of these regulations isn’t just about compliance, it’s a strategic opportunity to lead on sustainability, reduce costs through smarter packaging choices, and strengthen commercial offerings in a market that increasingly values environmental responsibility.
EPR and plastic tax briefly explained
Underpinned by the Producer Responsibility Obligations (Packaging and Packaging Waste) Regulations 2024, EPR shifts the cost of managing household packaging waste from local authorities to the businesses that place packaging on the market.
From October 2025, affected businesses (broadly those businesses with a physical presence in the UK that import or supply packaging are classified as the ‘producer’ and meet certain thresholds based on turnover and tonnage of packaging handled) must register with the relevant regulator, report detailed packaging data, and if a ‘large producer’ (broadly a turnover of over £2million and handling more than 50 tonnes annually) pay fees seeking to cover the cost of waste collection, sorting, recycling, and disposal.
Packaging is any material that is used to cover or protect products that are supplied. This includes:
- Primary packaging - for example a plastic drinks bottle
- Secondary packaging - for example, the shrink wrap around multipacks of drinks
- Tertiary packaging - for example the pallet wrapping upon which the drinks sit.
Certain packaging types are exempt from paying the charges.
Alongside EPR, the Plastic Packaging Tax (implemented by various legislative sources) applies to finished plastic packaging components that contain less than 30% recycled content. This tax is designed to incentivise the use of recycled plastics and reduce reliance on virgin materials. For food and drinks manufacturers, this means any plastic-heavy packaging that fails to meet the recycled-content threshold attracts additional costs on top of any EPR fees currently charged at approximately £223 per tonne.
Together, these measures form part of a broader government initiative to promote a circular economy and reduce the environmental impact of packaging. There is also a general consumer drive to reduce plastic use in food and drink products because of the health concerns surrounding micro-plastics and concerns for the environment. The current government seems committed to continuing with this agenda.
An evolving landscape
The UK Government has confirmed that the Producer Responsibility Organisation (PRO) for the EPR scheme will be appointed in March 2026. This body will have various responsibilities, including responsibility for administering producer fees and supporting local authorities.
From July 2026, EPR fees will vary based on recyclability using the Recyclability Assessment Methodology (RAM). RAM is designed to eco-modulate EPR fees, meaning fees vary based on recyclability to incentivise sustainable packaging design.
The Department for Environment, Food and Rural Affairs (Defra) has recently made further changes including offsetting fees for closed-loop recycling systems (food-grade plastics only) and pausing payments for street-littered packaging in England and Northern Ireland.
Further changes are likely under EPR, for example Defra is exploring dual-use packaging exemptions. Mandatory labelling requirements under the EPR are expected from 1 April 2027.
The per tonnage charge under the PPT is also likely to continue to rise, further increasing the costs for businesses using plastic from non-recycled sources.
Deposit schemes incoming
From October 2027, businesses that produce or sell drinks in England and Northern Ireland will also have new responsibilities under the Deposit Scheme for Drinks Containers (England and Northern Ireland) Regulations 2025.
These regulations impose new obligations on suppliers, manufacturers and retailers; and aim to increase recycling rates, reduce littering, and promote a circular economy, with retailers required to provide return points or reverse vending machines.
Shared responsibility and contractual risk apportionment
The compliance obligations under the regulations are complex for food and drink businesses where multiple parties, such as brand owners, importers, and retailers may share responsibility for the same packaging. This overlapping liability requires careful assessment and management, with ongoing responsibilities for monitoring and reporting to be clearly defined in supply chain agreements.
Businesses may wish to revisit supply chain agreements to allocate responsibilities for data collection, reporting, and fee payment and potentially seek indemnities in some situations. This is especially important in co-manufacturing and white labelling arrangements, where the distinction between producer and brand owner may be unclear.
In addition, there may be scope to contractually specify the materials used in product packaging in order to seek to avoid falling within the remit of the regulations or reducing the impact of the regulations.
Financial impact: Why redesign matters
The combined cost of EPR and PPT is potentially significant. EPR fees vary by material and weight, with plastic and glass attracting the highest charges (currently £192 per tonne for glass and £423 per tonne for plastic), while PPT currently adds £223 per tonne for non-compliant plastic packaging for in scope businesses.
Some larger businesses may absorb these costs, however, some are seeking to pass on the costs to consumers, with Gü desserts and Belvoir drinks among those who say shoppers pick up bill.
For SMEs, absorbing these costs may be challenging, making packaging redesign a necessity rather than a choice.
Redesign strategies in food and drink
To mitigate exposure, businesses are pursuing several approaches, including:
- Lightweighting: Reducing packaging material weight.
- Material Substitution: For example, moving from glass to aluminium cans meaning EPR fees are lower.
- Deposit return scheme: Operating deposit return schemes to encourage recycling and reduce litter by adding a small, refundable deposit to the price of certain drink containers.
- Recycled content: Increasing recycled plastic content to meet PPT thresholds.
- Mono-material design: Simplifying packaging into single-material formats to improve recyclability and make reporting easier and reduce EPR fee exposure.
- Innovation: Seaweed-based coatings and plant-based bioplastics are emerging solutions to reduce exposure.
Looking ahead
Packaging fees and taxes like EPR and PPT are accelerating a shift toward sustainable design in food and drinks manufacturing and there are many more changes that we are expecting to see in the next few years as these schemes develop.
While the financial and compliance burden is real, proactive businesses can transform compliance into opportunity, meeting both regulatory demands and consumer expectations for greener packaging.
