CURRENT ISSUES
Environment

Food production, storage and distribution have an unavoidable impact on the environment. FWD members seek to minimise this through initiatives that increase the efficiency of the supply chain, from the producer to the consumer.

Initiatives include: route optimisation technology; driver training; low carbon fuels; back hauling and recycling of waste and packaging; reducing packaging; recycling used cooking oil and reducing waste to landfill.

FWD is working closely with Government on its 25 year environment plan and other environmental policy proposals including those around using the tax system to tackle the use of single use plastics and other ways to tackle plastic waste.

Pressure had been growing for the Government to introduce a Deposit Return Scheme, which is intended to cut plastic, glass and metal drinks container waste by incentivizing consumers who return their drinks containers with a small cash sum.

The war on waste
Ones to watch

UK Deposit Return Scheme

A consultation is expected to be held early in 2021. Key points to note:

  • The scheme administrator will be a not for profit organisation. The Deposit Management Organisation will be owned by “producers and retailers” but the winning bid in the tender process will need to demonstrate support for the wider sector, including in how decisions are made, the general process and smaller businesses.
  • The DMO will make the decision as to what the appropriate deposit level will be. There is evidence that variable rates of deposit make a better scheme, as the deposit can be tailored.
  • Cartons may be included, although there is limited evidence and data at present
  • Defra is still considering whether glass should be part of a DRS
  • Independent food service operators will “probably” need to register for the scheme
  • A consultation is expected to take place in early 2021 and will run for 8 or 12 weeks. Defra is also considering the implementation timeline

Plastic packaging tax

The Government is consulting on the Plastic Packaging Tax, to apply at a rate of £200 per tonne of plastic packaging which does not contain at least 30% recycled plastic, and due to come into operation in April 2022. The tax is designed to incentivise the use of recycled plastic in plastic packaging. The tax will be paid by UK manufacturers and importers of plastic packaging that contains less than 30% recycled plastic. FWD will be responding to the consultation, which ends on August 20.

Environment Bill

The Government has published its Environment Bill (with Explanatory Notes)  which includes an intention to introduce a plastics tax in April 2022, and for a DRS and PRN scheme to be in place from 2023. 

The Bill sets out the Government’s policy on meeting the net-zero target by 2050, requiring producers to take more responsibility for products and materials that they introduce to the market, introducing a consistent approach to recycling and powers to introduce charges for single-use plastic items. FWD is working with the Defra on the wholesaler impacts of the Bill.

 Packaging Reform

FWD members are working hard to minimise their impact on the environment. Voluntary initiatives include back hauling and recycling of waste and packaging, reducing packaging, and reducing waste to landfill.

In contrast, heavy handed regulation to promote sustainability can be costly and burdensome for wholesalers largely operating as low margin businesses.

For example, if wholesalers no longer had a unique status under Extended Producer Responsibility (EPR), a significant increase in costs for the numerous wholesalers who supply the many SMEs around the country would occur. Our forecasting suggests that there would be over a 300% increase in the cost to wholesalers, many of whom are already facing significant financial challenges in the current economic climate. Any increases would be passed onto the consumers we serve in the form of higher prices.

We are calling on the Government to:

  • Maintain the current wholesaler obligation under new packaging reform measures
  • Packaging reform should link to other similar initiatives to ensure joined-up policy as successful EPR reform may lead to desired outcomes of the proposed tax on plastics packaging and Deposit Return Scheme (DRS)
  • Ensure any DRS for drinks containers is consistent across the UK
  • Ensure that future policy to promote sustainability is evidenced based

DRS in Scotland

January 2020: The Scottish Parliament Environment, Climate Change and Land Reform Committee has published its report on the draft Deposit Return Scheme regulations. The report includes a number of recommendations to the Scottish Government, including:

  • The scheme should be cost neutral for wholesalers
  • The Scottish Government to engage with the wholesale and distribution sector before finalising regula-tions
  • The single industry led Scheme Administrator should be set up with representatives from all parts ofthe supply chain. including wholesalers
  • Glass, HDPE and Cartons should be included
  • Minimum 20 pence deposit and a variable rate based on product size
  • Online sales should be included
  • If industry wishes to see a UK wide Scheme in operation it could extend the Scottish Scheme to otherparts of the UK or it could encourage the UK Government to bring forward proposals for a DRS
  • The timeframe for implementation of the scheme should be extended beyond April 2021FWD responded to the Committee’s call for written evidence, working closely with SWA. FWD were men-tioned in the report: “The Federation of Wholesale Distributors suggest producers should pay the deposit to the Scheme Administrator so that wholesalers are bypassed.” Several of the recommendations put forward by FWD and SWA have been adopted by the committee.The Scottish Government will respond to the Committee’s report within two months. The Scottish Govern-ment’s own consultation on the regulations, to which FWD responded, closed last week.A final version of the draft regulations will now be laid in the Scottish Parliament for consider- ation. The Environment Committee then has a further 40 days to consider it again, and report on it.