Small or large producers?

The new packaging Extended Producer Responsibility (pEPR) regulations move the cost of recycling from a shared responsibility model to the brandholders of packaging. This is to cover the cost of Local Authority collections. While no producers have contested this change, there has been much confusion about the implementation. This confusion invariably leads to double or triple counting or omission, producing incorrect data submissions and consequently incorrect cost allocation.

One of the real world outcomes of the new regulations impacts shops that typically have an off licence. We have corner shops or symbol group retailers that, under the new requirements, are only responsible as brandholders for the empty packaging that they provide, such as bags or deli counter packaging. Usually, this will amount to between one and two tonnes per outlet. If left at this, they would fall out of scope of the regulations, as they would be below the de minimus of 50T per year and so have no reporting obligations or fees to pay.

These small retailers are not responsible for the Kellogg’s cornflakes or the Coca Cola, because those brands are paying for that packaging. However, the regulations, as they are written, require the shop to report all the packaging that passes across its tills, i.e. all the deli counter packaging and all the cornflakes. This makes it a large producer and subject to the large producer obligations of reporting twice a year, paying registration fees of £1,685 a year if a member of a compliance scheme (more if not). The data that is required is the “nation of sale” i.e. which of the four countries the waste is likely to end up in.

An additional complication is that the makers of the empty deli packaging have to figure out if that packaging (their product) ends up with a small producer or a non-obligated one, and then add that back into their costs. That packaging might pass through the hands of two or three wholesalers or distributors before getting to the small retailer, but there is nothing in the regulations that requires any party to share any information.

To add insult to injury, the regulators have granted a reprieve on the reporting for this year and next, but still want the registration fees and either a nil or very small tonnage relating to the pack fill of empty packaging reported twice a year.

One of the simplest ways out of this would be to remove the requirement for these businesses. However, I suspect that this is unlikely. A compromise might be, for businesses that would be exempt or small producers (between £1M & £2M turnover and between 25T & 50T a year) except for the selling obligation, that they just report once per year as a small producer.

For a government that is looking for growth in the economy, this needless administration is a sure way to stymie growth, except for consultants that get paid to untangle this mess. The regulators have already introduced a regulatory position statement (RPS) to remove the reporting for two years, so why not extend it all the way, or at least the compromise suggested?

Simon Stringer is Managing Director of Scotpak, a UK packaging compliance scheme for Scoland, England, and Wales.