FPA Friday Digest

Introduction by the FPA's executive director Martin Kersh

At the reception held by the Environmental Services Association on Wednesday to launch its 'Vision for a Circular Economy in the UK by 2040', Defra minister Mary Creagh referred to the waste sector as "the ultimate Cinderella cause", admittedly said in jest and received as such, but a sector intending to invest £15 billion in circular economy infrastructure over the next 10 years is certainly no Cinders. The ESA Vision sets out a very exciting future, with higher recycling and greatly reduced waste and more circularity. That investment is going to harness the full potential of AI and the use of robots in sortation, which will help make the ESA vision achievable.

Achieving the vision will require a sustained level of political will across parliaments over the next 15 years. Who knows what will be the majority party in 15 years time, but let’s hope the ESA’s Vision isn’t let down by political expedience, or a desire for a party to wreck everything that preceded it.

Is EPR another example of the poorest paying more?

The poor pay more, whether applied to VAT or a latte levy, is regrettably as appropriate now as it was back in 1967 when the term was first coined. Not that smaller producers are necessarily ‘poorer’ but, the preliminary feedback from the FPA survey of members’ EPR administration costs reveals, the impact of EPR on smaller businesses is disproportionately higher than for larger businesses, despite the latter administering their returns of far higher tonnages.

The initial findings of our survey reveal costs of as much as £80,000 a year, representing a huge number of people-hours to complete and fill the packaging data. At the other end of these bigger numbers are the costs from those with smaller packaging turnovers, where comments include: “£2,800 admin cost per-year on a packaging levy of £1,400. For every £100 of packaging levy we pay, we pay an additional £200 administering it”.

An argument used in favour of excluding smaller producers has been the cost to government in administering smaller returns isn’t worth it. However, that we have a situation whereby it costs double the value of the packaging to supply the data required is not really a function of business size, but relates to the complexities of identifying responsibilities for packaging and the level of data needed.

Of course, it may also cost smaller businesses more per-pound of turnover to complete a VAT return, but the process is fairly much a by-product of data they record in the normal course of running a business, but in any case HMRC offers the choice of a flat-rate scheme to simplify the process. Once again, this highlights the simplest way of ensuring packaging pays for its collection and processing would have been to charge a tax on packaging at source. Such a tax could then have been organised in the same way bookkeeping does for VAT.

We suspect in setting up such a convoluted scheme, Defra didn’t consider the complexity of completing data from the business perspective, and certainly not from the perspective of smaller obligated producers. Meanwhile, Defra is spending millions of pounds on systems to handle the data, and rumour has it as much as £20 million on the packaging EPR invoicing system.

Faced with a choice of a simple and effective solution to raise the money, which may not have delivered every one of its goals, Defra has chosen a highly complex system, understood by few and error prone. In response to a question asked at the FPA Environment Seminar last year as to why Defra doesn’t simply tax packaging, the FPA was told that wouldn’t be possible, as EPR offers so much more than a tax. Adding up all the additional administration costs across the economy, coupled with Defra’s huge costs in setting up systems to deal with the data, we wonder what the cost of achieving everything beyond the cost of EPR covering packaging waste management costs adds up to ...

Haven't had chance to complete the survey yet? We're collecting responses until the end of the month, following which we'll report on the findings. All responses are completely confidential and no personal or company names are required. Please circulate the link below to your suppliers. The more responses we receive the greater the impact the message will have.

New reuse/return vending machine for foodservice bowls and boxes

Anyone reading a recent Footprint article may have been led to believe the industry was celebrating Pepsi dropping its reuse ambitions. Far from it, and certainly no ‘wry smile’ as the author hinted. Reusables, as opposed to refillables, are certainly a part of the foodservice landscape – it's just we don’t see them replacing ALL single-use packaging, as governments seem to be believe they will.

The FPA has made the point that many UK reuse trials have been poorly devised, haphazardly executed, and of too small a scale to be of value. Added to this is the public generally over-claiming agreement and intentions in surveys – responding over-enthusiastically to surveys when it comes to environmental matters. But generally, this wave of approval mostly fails to manifest itself in real life behaviour. A survey conducted last year by PA Consulting confirmed this gap in 'intent to use' and 'actual use', with 78% of the sample not choosing the reuse option.

This notion of reuse taking over may also be clouding the judgement of both governments and of those conducting the trails. Logically, reuse and single-use will work effectively side by side, just as some of the more in-tune environmental charities have said.

Again, we are certainly not dissing reuse, as to do so would be highly disrespectful to those FPA members trading in reusable products – a good example being beer containers at events. Reuse has been very successful in closed environments, but the high street, judging by trial results, is clearly a challenge.

The FPA continues to keep its eyes on developments, such as TOMRA’s Reuse Collection Point machine, introduced at the Reuse Economy Expo in Paris and capable of handling food packaging boxes and bowls.

This is a development of TOMRA’s reverse vending system for hot and cold drink cups, piloted in Aarhus, Denmark over the last year. Unfortunately, the company's website doesn’t include a photo of the new pack and bowl return unit.

The pilot for the Reuse Collection Point Machine will begin in the French capital from the first quarter of 2026.

TOMRA's Rotake reuse system uses QR codes that track reuse containers’ journeys. This enables purchasers’ deposits to be refunded, although each container must be individually scanned.

An Eunomia grocery reuse system study comparing Aldi (in-store) with Ocado (online), concluded reusable containers each need to be used and returned six times to out perform an equivalent single-use option. This translates into a 82% return rate. The Danish cup trial resulted in a 85% return rate. Even taking these figures at face value we need to consider the cost of the 15% to 18% unreturned containers, and how these are distributed with regard to the number of times each is used. If the non-retained rate happens to include a higher proportion of containers only used once, then given reusables will suffer in appearance and effectiveness the more they are used and nor do they last for ever, then 15% to 18% may prove to be more costly than those numbers suggest.

Reuse is with us but it has to make sense financially, and while the TOMRA machines will no doubt be effective, can the average kebab or fish and chip shop afford to take part in a reuse system without losing margins?

Do consumers truly care about 'sustainable' packaging?

McKinsey and Company this week published the USA results of a survey carried out in March across 11 countries, including the UK. If the USA results mirror the global ones then we will find, in terms of importance, consumers have again rated product quality, price and convenience above the environmental impact of products. For packaging the picture is similar, with consumers increasingly concerned with food safety and shelf life, and environmental impact rated less important.

What topics would you like to see discussed at this year's FPA Environment Seminar?

The 2024 FPA Environment Seminar featured representatives from government, packaging, environment and hospitality and covered a broad range of subjects, but what topics would you like to see covered in 2025?

For this year's Environment Seminar, taking place on Wednesday 29 October, at Stationers' Hall, St. Paul's, we'll be putting together yet another stellar group of speakers. But first we want to know what topics are of most interest to our members, so we've put together a very short survey to find out just that.

It will take less than two minutes to complete and will help inform the content of this year's event. The link is in the button below and you have till close of business a week today (Friday 13 June) to complete it.

We want to know the cost to your business of reporting your packaging data

Thank you to all those who have responded to our survey regarding the costs you face in working out your packaging tonnages to provide the data needed legally to comply with packaging EPR. We need an indication of your costs in administering EPR on an annual basis.

If you haven't done so already please complete a short survey, consisting of just five questions. Your answers will give the FPA a rough steer as to the additional costs to business, which government hasn't considered or is likely to have grossly underestimated.

The survey link is below. Responses are entirely confidential. We do not ask for your name or the name of your business. We would also appreciate you passing on the survey link to your suppliers.

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