The Wine and Spirit Trade Association (WSTA) has raised concerns about the lack of ‘sufficient clarity for a commercial organisation’ to implement effective pricing strategies. This includes uncertainty regarding how much of the new costs will be passed onto customers, as well as adjustments in pricing and contracts with retailers in the context of food and drink sustainability.
In light of these challenges, the WSTA is urging the Government to defer the implementation of the Extended Producer Responsibility (EPR) scheme until fees are finalized, allowing businesses time to prepare. Furthermore, a confirmed Scheme Administrator and comprehensive guidance from Defra are necessary for a smooth transition.
The association emphasizes that this crisis disproportionately affects SMEs and importers, who generally have lower cash reserves and limited financing options. The collective worries of the industry have prompted over 80 businesses to join forces in a letter to Ministers, expressing their concerns regarding what they deem a flawed scheme.
Under the existing guidelines, producers face the burden of paying twice for hospitality and business-related waste packaging. Currently, these costs are covered through backhaul agreements and direct contracts with waste collectors, coupled with the Producer Responsibility Note (PRN). However, with the introduction of EPR fees, additional financial obligations will arise.
Although there is a ‘non-household’ exemption process, the WSTA argues that Defra’s new regulations ‘do not work’. Consequently, most bottles sold in hospitality will be subjected to EPR fees, adding further complexity to food and drink packaging compliance.
The WSTA has identified that numerous components of the EPR are still unprepared for rollout. This includes the establishment of the scheme administrator responsible for modulating EPR fees in the second year, the calculation of said fees, mandatory labeling, revisions to existing legislation, and necessary accounting guidelines.
Miles Beale, chief executive of the Wine and Spirit Trade Association, stated: “Defra sensibly delayed EPR by one year; however, it is clear that the scheme is not ready to roll out and a further delay is required to make sure the costs are realistic and known in advance. Wine and spirit businesses are working towards using less packaging and making it more recyclable, but the scheme currently set out is unfair and unfit for purpose. A delay would mean industry and Defra could work together to find a fairer, clearer and more sustainable resolution.”
Lee Evans, co-founder and managing director of Condor Wines, added: “As an SME, or any type of business, when setting pricing you cannot afford to wrongly forecast your costs and with EPR we are still not able to see accurate figures. Our customers need us to provide 2025 pricing before mid-December, so we are already working internally to forecast and prepare for these changes. Without a lack of clarity on EPR costs, we are more likely to wrongly forecast, and this could be detrimental to our business. I support the WSTA in their efforts to delay and seek more details before implementation of EPR, thus allowing us sufficient time to properly forecast and prepare.”
Simon Doyle, general manager at Concha y Toro, expressed, “EPR is a major reform of responsibilities for and costs of recycling, so it is crucial that all involved have absolute clarity on how any transition should be managed. While the policy objectives may be clear, the process of implementation is not. Producers are to be responsible for collecting another tax on behalf of the government without certainty on what these taxes will be, how we should collect them or account for them. It is critical that DEFRA and all involved in managing EPR listen to the legitimate concerns of the wine industry and take stock of how much more effective implementation could be if due time were given to work collaboratively to find a sustainable and manageable way forward. Alongside duty reform, this new government couldn’t have a clearer opportunity to put into practice its claims of listening and wanting to remove bureaucratic barriers to business.”
Julian Momen, chief executive of Enotria & Coe, remarked: “As an industry that has always been associated with glass packaging, we are deeply concerned about the Extended Producer Responsibility (EPR) scheme’s impact on businesses like ours. The illustrative fees disproportionately affect glass, threatening the wine and spirits sector and potentially diverting investment by overseas producers away from the UK. We urge DEFRA to adopt a simpler, unit-based approach, fostering a competitive market for all packaging materials, and to delay EPR implementation to align with the introduction of the Deposit Return Scheme.”
Additionally, under current EPR regulations, wholesale and hospitality businesses face the risk of being charged both for commercial waste collection and EPR fees for household waste. It is imperative for operators to demonstrate clearly that their packaging is non-household and collected through commercial contracts, thereby exempting them from EPR fees. It is unjust to impose these double charges due to the complexity of the regulations.
Kieran Healey-Ryder, head of corporate relations at Whyte and Mackay, emphasized: “It is essential to delay EPR. Not to deny the fact it is important; in fact, producers already take their responsibility extremely seriously. We all recognize that sustainability is complex. We know from recent experience (with DRS) that if we are too quick to launch, EPR will be quick to fail. A delay will ensure EPR is ready.”
