How is Extended Producer Responsibility Affecting UK Retail?

Extended Producer Responsibility (EPR) is entering its first charging year (from October 2025), reshaping how UK retailers and manufacturers fund packaging waste. 

The policy is designed to shift the full cost of dealing with household packaging waste from local councils to businesses. 

However, retailers say the move will add both financial and administrative pressure to a sector already under strain from wage growth.

The British Retail Consortium (BRC), which represents the UK's biggest retailers, has warned that a large share of EPR-related costs could be passed on to consumers. 

EPR introduces recurring fees for packaging, based on the type and volume of materials, with detailed reporting required each eyar. 

Businesses are defined in two tiers: small producers, with annual turnover above US$1.25m and producing more than 25 tonnes of household packaging; and large producers at more than US$2.5m turnover and in excess of 50 tonnes with further obligations. 

Retailers argue this cost structure hits sectors unevenly.

All materials incur fees, although glass typically faces relatively higher per-tonne charges. Industry estimates suggest total EPR-related charges could reach about US$1.38bn a year, with glass packaging accounting for up to US$625m despite representing less than 5% of packaging by volume. This is raising concern among retailers and suppliers that rely on glass.

On a per-item basis, indicative fees for a single 750ml glass bottle are roughly US$0.11–US$0.14, excluding closures and secondary packaging such as cardboard. The industry contends this risks penalising materials like glass that are already highly recyclable.

Meanwhile, broader cost pressures continue to build.

According to BRC modelling for 2025, retailers face around US$8.75bn in additional costs from changes such as the National Living Wage and employer National Insurance. EPR adds another layer that many cannot absorb within current margins.

Most retailers report a sharp increase in resource demand for compliance.

For the first half of 2025, the Environment Agency has issued a temporary enforcement easement for recyclability assessment reporting.

Assessments and records are still required for 1 January to 30 June 2025, with reporting due by 1 October 2025, but the regulator has said it will not normally take enforcement action for that period. Other reporting requirements remain live.

The burden is heaviest for smaller businesses without the scale or systems to automate complex reporting, creating operational bottlenecks in procurement, product development and logistics.

New data compliance rules stretch resources

Under EPR, affected firms must collect and report detailed information on every type of packaging they use. This includes weight, recyclability, material breakdown, and classification into primary, secondary or transit categories.

Retailers say the administrative workload is already growing. Around 85% of retailers surveyed report a sharp increase in resource demand for compliance. Though enforcement of recyclability assessment reporting is paused for the first half of 2025, other requirements remain live.

The burden hits smaller businesses hardest – those without the scale or systems to automate complex reporting. The additional workload also creates operational bottlenecks across supply chains, particularly in procurement, product development and logistics.

Meanwhile, the OECD says: "Decades of experience with EPR suggests that, if done properly, it increases transparency, mobilises significant financial resources and consequently increases collection and material recovery rates of targeted products."

Retail calls for ring-fenced recycling investment

Retailers are not rejecting the principle behind EPR. Many are cutting packaging volume and switching to more recyclable materials.

BRC members instead say they want accountability for how funds are spent, calling on government to ring-fence EPR revenue so it flows directly into local recycling infrastructure and service improvements.

Andrew Opie, BRC Director for Food and Sustainability, says: “Retailers accept the ‘polluter pays’ principle, but the timing of the levy during a cost-of-living crisis means consumers will rightly ask what they are getting for higher prices.”

In the drinks sector, industry leaders such as Craig Woodburn, Sustainability Director at Molson Coors, point out that EPR highlight the need to design for circularity, reduce material use and increase recyclability.

They argue that, alongside future deposit return schemes, effective and fair returnable systems can deliver long-term benefits even if there is an initial burden, provided business and government act in partnership.

Speaking to Sustainability Magazine, Craig says: “In the UK, regulations like Extended Producer Responsibility, meaning businesses now bear 100% of a fee based on the weight and type of packaging they place on the market – from glass bottles to cans.

"This shift is designed to incentivise more sustainable packaging choices, and it underlines the importance of reducing material use and increasing recyclability across the industry.”

Craig adds that EPR supports closed loop recycling – where packaging is reused rather than discarded – and aligns with the sector’s long-term goals.

“The benefit is optimising the raw material used, the benefit of closed loop recycling, which is why the systems such as extended producer responsibility and in future deposit return schemes are there," Craig continues. 

"So, I can see long term, with effective and fair recyclable or returnable systems in place, the benefits would outweigh the downsides, but collectively there are extra things we need to do as a wider industry in partnership with government to help support and make the ambition successful because initially there will be an extra burden.”

What lies ahead for retail and recycling?

EPR marks a major shift in who pays for packaging waste and how supply chains respond.

Still, questions remain about how much of the cost lands on consumers, how recycling investment will be managed and whether smaller firms can cope with the reporting load.

While fee modulation – offering discounts for greener materials – is expected from 2026, producers and retailers want faster clarity on how this will work in practice.

Until then, the pressure mounts across the entire chain, from manufacturers to shop floors.