FWD’s Final Word: UK Packaging Producer Responsibility
What is the UK Packaging Producer Responsibility reform?
As part of the government’s commitment to make the UK a “world leader in resource efficiency”, it is looking at making changes to the tax businesses pay for the packaging material they “place on the market” or sell, in plain English.
What’s that got to do with wholesalers?
They pay it. And it’s a lot of money each year.
What do they pay for? Surely they’re just the link between suppliers and retailers or caterers?
Any business selling more than 30 tonnes of packaging, or with a turnover of more than £2 million, pays a packaging obligation per tonne. So wholesalers pay for the outer-case packaging when selling to a retailer, who sells what’s in the box to the end user, and the outer and inner packaging when selling to a caterer, who uses that product in their business.
What does that cost each wholesaler?
It depends on the business, but it could be as much as half a million pounds a year each.
So, what is the change that is being proposed?
There are a few things, but the one that will have the biggest impact on wholesalers is to make them pay for all the packaging they handle, including what’s just sold on to retailers and caterers.
And how much would that cost?
Well, the experts who calculate the amount wholesalers pay each year say the wholesale obligation would go up by as much as 300%.
Wow, that’s a lot of money to find!
Wholesalers would recoup that in higher prices charged to retailers and caterers, precisely the businesses the government want to protect from paying more as part of their reforms.
So, what would wholesalers like to see happen?
All businesses should play their part in contributing to the system. The threshold for paying the obligation should be lowered to bring more into scope and, at the same time, protect the smallest businesses from both paying the obligation and from the higher prices which would result from making wholesalers pay for the lot.
What is FWD’s role in this?
We successfully prevented a similar change in 2013 and the same arguments still hold now. We want to protect wholesalers’ customers and ensure they don’t end up paying more for the products they sell.FWD packaging UK Packaging Producer Responsibility System Wholesalers