INDUSTRY COMMENT: BHETA EPR TAX: T
his year, the Government is introducing legislation called Extended Producer Responsibility (EPR)
which will totally overhaul the current packaging/PRN system. It will be the most significant change to packaging regulations for a generation with some estimates indicating a between ten and twenty-fold hike in PRN fees for suppliers. Essentially, EPR shifts the burden of paying for kerbside recycling for branded products from a shared responsibility between general taxation, retailers, and suppliers to suppliers only. In the case of own brand, the retailer will pay. The Government has promised local authorities that the £1.7billion they collectively spend on kerbside recycling will be funded by suppliers and retailers from 2024.
The rationale for EPR is that the ‘polluter should pay’ and if suppliers are made responsible for packaging costs (based on weight) then they will be incentivized to reduce packaging.
A massive challenge in cost and time
While that is laudable in terms of sustainability the short-term reality for producers is a massive increase in cost. Moreover, that is not the only challenge. For the first time, a new lower threshold of £1m - £2m annual turnover and 25 - 50 annual tonnes of packaging has been added to the regulations. While these ‘small’ suppliers do not need to pay anything yet, it is a legal requirement to submit a packaging return.
Which brings us to the other aspect of the challenge – reporting! While the financial liability kicks in in 2024, the first reports under the new EPR scheme are due in September 2023, and BHETA is advising its
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TURNING A THREAT INTO AN OPPORTUNITY
A viewpoint from Will Jones, Chief Operating Officer of BHETA - the leading UK Trade Association for manufacturers, importers, and distributors who operate in the home improvement and garden sectors.
TOP TIPS FOR REDUCING PACKAGING:
1. Get interested in packaging. 2. Know your material hotspots, and change to better materials (without compromising safety or quality). 3. Remodel your Product. Information Management systems for effective reporting. 4. Assess, change, refine and test and then go again. 5. Packaging should be considered across the whole company (sales, marketing, accounts, tax, QA, supply chain).
membership on how to manage the submission of packaging returns.
Coping with EPR It is vital that the DIY and garden industry prepares. As a start, all suppliers should consider talking to Wastepack, the PRN Scheme Provider for many BHETA members to understand how legal data reporting should be managed going forward. Paul Van Danzig, Policy Director at Wastepack advises, “Above all, don’t panic! The requirements for 2023 are not too dissimilar to existing PRN reporting. Wastepack, and other scheme providers, can help you interrogate your data and prepare based largely on information you will already have.”
EPR – the opportunity By taking the right approach now, however EPR can actually be turned into an opportunity! For example, if you currently report under the Packaging Waste Regulations, set up an EPR working group, and empower the team to go back to the drawing board on your packaging
to look at every element that can be reduced, removed, or changed to a recyclable and recycled material. Remove single use plastic wherever you can. This will not only mitigate the taxes coming through EPR, but it will make your product more attractive to consumers and retailers.
Commenting on this potential upside of EPR, Chris Carter, Marketing Director of Trend UK, a BHETA member and manufacturer in the tool sector says: “EPR has accelerated our major multi- department project to minimise the volume of packaging we use, reduce plastic, minimise all waste and to move to easily recycled materials. “For example, on one range of Saw Blades we are changing the plastic packaging to cartons, as well as reducing the packaging size, which should save 26 tonnes of plastic per year.” From the retail perspective, Paul Field from Toolstation adds: “Toolstation’s research shows that 70% of DIY and trade customers want and expect companies to reduce their
packaging. The DIY sector needs to catch up and this will ultimately benefit everyone. “EPR provides a clear financial incentive for every supplier. The move will not only prevent unnecessary waste and reduce pollution, but this upfront investment could save suppliers money (through optimised packaging, greater container fill, reduced transport costs, etc) and means they could potentially pay less tax for less polluting materials.” EPR will no doubt be perceived as a massive threat by many, and in some very real senses it is. It is a huge change from an operational point of view and dealing with it will consume many hours and considerable amounts of money. Taken as an incentive, however successful suppliers and retailers can ultimately see significant benefits in making that investment.
For more information about BHETA advice and services, contact the BHETA Member Services team on 0121 237 1130 or visit the BHETA website
www.bheta.co.uk.
APRIL 2023 DIY WEEK 7
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