pEPR briefing for MPs

Packaging Extended Producer Responsibility (pEPR): system visibility, fairness and local economic impact

Summary

The UK’s Packaging Extended Producer Responsibility (pEPR) scheme is a major environmental policy designed to shift the cost of managing packaging waste onto producers.

We support this objective.

However, emerging evidence suggests that the current system design may be creating unintended consequences that risk undermining both fair competition and policy effectiveness.

At the core of the issue is a lack of verifiable visibility over the full producer population.

This creates a risk that:

• Compliant businesses carry a disproportionate share of costs.
• Competition is distorted.
• Enforcement becomes difficult.
• Confidence in the system is weakened.

This is not about wrongdoing by individual businesses.
It is about whether the system design is delivering a fair, enforceable and economically sustainable outcome.

Why this matters in your constituency

Packaging EPR directly affects businesses involved in:

• Packaging manufacturing.
• Distribution and wholesale supply.
• Foodservice and hospitality supply chains.
• Logistics and warehousing.

Many of these businesses are significant local employers.

Where system visibility is incomplete, there is a risk that:

• Compliant businesses face higher effective costs.
• Lower-cost competitors gain advantage.
• Investment decisions are delayed or reduced.
• Jobs and local supply chains come under pressure.

This is therefore not just an environmental policy issue, it is a local economic and employment issue.

What the Companies House analysis shows

Analysis of Companies House data indicates a time-compressed increase in newly formed micro-entities operating in packaging-related wholesale, distribution and manufacturing.

Key characteristics include:

• A concentration in wholesale/distribution activities.
• Predominantly single-director and single-controller company structures.
• Recent incorporation patterns.
• Limited visibility within publicly available EPR producer data.

In a conservative matched sample of newly formed packaging-adjacent companies:

• The majority were small, recently incorporated entities.
• A significant proportion could not be identified on public producer registers.

This does not demonstrate non-compliance. However, it highlights a verifiability gap. There is currently no reliable way for regulators, buyers, or the public to confirm that all obligated businesses are visible within the system.

Public reporting and sector engagement

The issues outlined above have begun to attract wider attention.

Recent coverage in The Grocer highlighted concerns around a surge in newly formed packaging-related businesses and the potential implications for EPR system integrity.

This reporting was based on industry-led analysis and reflects a growing concern across the sector that, without greater visibility and verification, the system risks placing a disproportionate burden on compliant businesses.

In response, the Foodservice Packaging Association has issued a series of open letters to Defra, PackUK and the Environment Agency setting out practical recommendations to address these issues and ensure the system operates as intended – and is both environmentally effective and economically fair.

The practical effect

Where visibility is incomplete in a cost-allocation system:

• Costs concentrate on compliant businesses
  Those that are visible and registered carry a growing share of total system costs.
• Competition becomes uneven
  Businesses with lower or unclear EPR cost exposure can undercut compliant suppliers.
• Investment is constrained
  Margin pressure reduces capacity to invest in innovation and sustainable packaging.
• Imports and cross-border supply add complexity
  Where packaging is supplied via import-led or cross-border models, compliance can be more difficult for buyers and regulators to verify.
• Buyer confidence is weakened
  There is currently no simple way for customers to verify supplier compliance.

Why this is a system design issue

The current framework relies heavily on:

• Self-registration.
• Threshold-based exclusions (de minimis).
• Limited public verification tools.

While each element has a policy rationale, together they can create:

• Gaps in visibility.
• Incentives for fragmentation or below-threshold operation.
• Challenges for enforcement and recoverability.

In a system where costs are shared, accurate identification of the full producer population is fundamental.

Potential consequences if unaddressed

If these issues persist, risks include:

• Loss of competitiveness for compliant UK businesses.
• Reduced investment in domestic manufacturing and innovation.
• Pressure on employment in manufacturing, logistics and supply roles.
• Distortion of the market in favour of less visible operators.
• Erosion of confidence in the EPR system.

What we are asking for

We are calling for practical, proportionate steps to strengthen the system:

• Independent verification of the producer population
  Including cross-referencing with Companies House and relevant trade/import data.
• Improved transparency
  Greater clarity on register completeness and system coverage.
• Buyer-facing verification tools
  So businesses can easily check supplier compliance.
• Review of threshold effects
  To ensure the de minimis threshold is not creating unintended incentives.
• Clear enforcement and recoverability strategy
  Reflecting the realities of micro-entity structures and cross-border supply.

How you can help

You can play an important role in ensuring the system operates fairly and effectively by:

• Raising questions with Defra, PackUK and the Environment Agency.
• Requesting clarity on how the full producer population is identified.
• Highlighting potential impacts on local employers.
• Supporting scrutiny of system transparency and enforcement.