Glass Packaging: Extended Producer Responsibility

Wendy Chamberlain Excerpts

Wednesday 14th May 2025 Westminster Hall

[Sarah Dyke (Glastonbury and Somerton) (LD)]

It is a pleasure to serve with you in the Chair, Mr Stringer, and to speak on behalf of the Liberal Democrats on this important issue. I congratulate the hon. Member for Rotherham (Sarah Champion) on securing the debate.

It is right that the Government are taking action to make manufacturing and packaging more sustainable. Recycling is essential for protecting natural resources and reducing the environmental impact of waste, but given that only 9% of plastic ever produced has been recycled, it has never been more urgent to make packaging more sustainable. The introduction of EPR can help us to achieve that, but it is important that it does not come at the cost of business viability.

The Liberal Democrats have real concerns that the EPR scheme, as it stands, will put the financial stability of small and medium-sized businesses at risk. Further uncertainty and instability for these businesses must be avoided, especially as they navigate the aftermath of the previous Conservative Government’s economic mismanagement and try to find a way through the challenges being put on them by the current Government.

Representatives from the pub, beer and cider sectors have told me that they are really concerned about the impact that EPR will have on their businesses. The drinks sector in Glastonbury and Somerton supports 101 pubs and over 1,200 local jobs, and contributes £29 million to the local economy. Profit margins for many of these businesses are paper thin, and they will have no choice but to pass on the additional costs they incur to their customers.

That is backed up by DEFRA’s impact assessment, which confirms that 85% of the costs will be passed on to consumers. Research from the British Beer and Pub Association has found that EPR could add £154 million a year to the cost of beer bottles, negatively impacting many traditional beer and cider-producing businesses that use glass bottles. The Society of Independent Brewers and Associates has noted that the implementation of EPR in its current form will likely have a significant impact on small independent breweries, pubs and consumers.

[Wendy Chamberlain (North East Fife) (LD)]

I should declare an interest, as chair of the Scotch whisky all-party parliamentary group.

My hon. Friend mentions independent brewers. Independent distilleries in North East Fife and elsewhere in Scotland face a real challenge, because they often do not produce separate bottles for hospitality and for other consumers. Does she agree that the Government need to look at that in their consultation, because those businesses will end up being taken into EPR through both household waste and hospitality?

[Sarah Dyke]

My hon. Friend makes a really good point. Those are, indeed, the unintended consequences we will see if the scheme is rolled out in its current form.

I am really worried about how this will impact the independent pubs in my constituency such as the Etsome Arms in Somerton, which prides itself on celebrating brilliant local brewers. This comes at a time when the UK has lost a hundred small breweries in the past year alone, with many more facing costs that they cannot absorb by themselves.

Glastonbury and Somerton is home to breweries such as Glastonbury Ales and Fine Tuned Brewery, near Somerton, as well as distilleries such as the Spirit of Glastonbury gin company. I visited Fine Tuned Brewery earlier this year to hear about some of the challenges that small breweries face, and the people who run the brewery explained their concerns about the impact that EPR will have on their business. They feel like they have been left in the dark due to poor communication from DEFRA.

It is clear that the knock-on costs of EPR will have an impact on these businesses. In fact, many in the industry are concerned that beer and cider producers might be incentivised to switch to less costly packaging such as aluminium or plastic. Those materials are more difficult to recycle than glass, so there is a risk that the scheme will achieve the opposite of its intentions. This potential backward shift in material usage may be only two years away, when the deposit return scheme comes into force.

In addition—and this concern has been echoed by many Members today—I have spoken to people in the industry who say it is clear that producers may end up paying twice for hospitality and business waste packaging under the current guidelines: once for existing waste collection and then again through EPR. I hope the Minister will comment on this uncertainty and provide businesses with the clarity they need.

On Sunday, people across my wonderful county celebrated Somerset Day and the important traditions of the region. One such deep-seated tradition is cider making. It is an economically significant and indispensable part of Somerset’s cultural fabric. Glastonbury and Somerton is home to fantastic producers such as Dowding’s in Wincanton, King Brain in Little Weston, Burrow Hill in Kingsbury Episcopi, Tricky Cider in Low Ham, Harry’s Cider in Long Sutton, Hecks Cider in Street and Bere Cider in Bere, near Aller, to name just a few.

Cider makers are fully supportive of a circular economy, but many are worried about how EPR might make their businesses unviable. Many cider producers operate on thin profit margins, as I have said, and some may struggle to remain viable if they are laden with these additional costs. The National Association of Cider Makers has expressed frustration that the introduction of EPR does not align with the introduction of the DRS in two years’ time. While the full costs of EPR will not be confirmed until June, the hammer blow is already being felt. Businesses have been experiencing disruption since its introduction last month, making it very difficult for them to plan effectively.

Combined with other costs, EPR is squeezing profitability and threatening employment. Given the economic importance of cider makers, whether through the people they employ or the cider apple-growing farms they partner with, it is a massive concern to many in Somerset that these additional costs could seriously damage the industry.

When I held a very well-attended cider blossom season tasting event in Parliament earlier this year, a cider maker told me that cider is often seen as synonymous with Britain, and that British cider’s terroir is something that no other country can replicate. Cider making is a unique industry, so the costs of EPR must be proportionate and producers must be supported as they move towards a circular economy, rather than being forced out of business.

The Liberal Democrats know how important it is that businesses are given the notice, support and time they need to plan and adjust. The lack of clear information on the final fees and the timing of the start of producer liability creates challenges for business planning. I hope the Minister can give some clarity on that matter today.

The Liberal Democrats believe it is crucial that businesses are supported in this transition, especially when they have already been hit by higher employer national insurance contributions and higher business rates, as has been outlined by my colleagues today. We have concerns not only about how EPR’s implementation might affect small businesses but about how the scheme will be regulated.

The Environment Agency is already severely underfunded and struggles to fulfil its regulatory obligations on water quality. Consequently, we are cautious about EPR and want to ensure that it comes with appropriate support and additional funding for the Environment Agency to meet this additional responsibility.

Likewise, given that EPR changes the way local authorities will be required to manage household recycling, we believe that the role of local authorities in the scheme must be properly supported—they are constantly being asked to do more and more with less and less.

The Liberal Democrats recognise the importance of making packaging more sustainable, which is why we have long been committed to introducing a deposit return scheme for food and drink bottles and containers. It is also why we want to see the complete elimination of non-recyclable, single-use plastics within three years, and why we want to end plastic waste exports by 2030. However, we are also clear that those ambitions must be achieved by working collaboratively with industry to ensure that small drinks businesses are not left behind or struggle to remain viable. If we do not deal with this issue, then less recyclable and less circular materials, or cheaper imported glass with a larger carbon footprint, will become a more viable option for businesses in a sector in which the margins are already very tight.

--- Later in debate ---

[Mary Creagh]

I will give time at the end but I want to make some progress.

The annual growth rate of circular industries is 3%, more than double the UK’s overall growth rate of 1.2%. Extended producer responsibility for packaging—pEPR—moves recycling costs from taxpayers to packaging producers. Think about it: not everybody drinks and not everybody shops online, but we are all paying for the costs of collection. We have had a great tour of drinking places, hostelries and amazing producers, but at the moment everybody in the country is paying for that, through council tax and general taxation. These reforms are creating systematic change, and that is hard.

Simpler recycling in England will make recycling easier and consistent. People will be able to recycle the same materials, including glass, whether they are at home, work or school, which will create a step change in the quality and quantity of recyclate streams. That is enabled by pEPR, which will pay for the new costs associated with the change, as my hon. Friend the Member for Ealing Southall (Deirdre Costigan) mentioned.

We are also introducing deposit return schemes in England, Northern Ireland and Scotland that add refundable deposits to single-use plastic, steel and aluminium containers. I discussed this with my colleague in Northern Ireland last week at the British-Irish Council environment ministerial meeting at Kew Gardens. We had a two-hour debate about how we would co-operate on the circular economy, in particular looking at the challenges of Guernsey, Jersey and the Isle of Man—island economies with no real reprocessing facilities—and what we can all learn from each other.

[Wendy Chamberlain]

Will the Minister give way?

[Mary Creagh]

I am going to make some headway.

DRSs cut litter, boost recycling rates to more than 90% and create high-quality materials that industry can reuse. Since it launched in 2024, the Republic of Ireland’s DRS has seen over 1 billion containers returned and a near 50% reduction in drinks container litter. Last week, I met Timmy Dooley, the Minister of State for Environment, Climate and Communications in the Republic of Ireland, who he said he had been sceptical of the DRS but now has the zeal of a convert.

This challenge is changing the way in which retailers and producers think about eco-design. Walkers is starting to use paper-based packaging for crisp multipacks, and many supermarkets are now using paper rather than plastic trays for fresh food. Our vision is to become world leaders in circular design, technology and industry.

These reforms were started by Michael Gove, late of this parish, back in 2018—seven years ago. I remember successive Secretaries of State for DEFRA coming to the Environmental Audit Committee, when I was Chair, and promising these reforms and deposit return schemes. There has been extensive engagement and consultation with business on pEPR, including public consultations in 2019 and 2021. Businesses have had a clear indication, and the scheme has already been delayed twice.

My officials run monthly packaging engagement forums, which regularly draw more than 1,000 attendees, to provide updates and test policy development with stakeholders. I have met British Glass several times to hear its concerns. I met Heineken last September. I met British Glass in October 2024, and then in January at a glass reuse roundtable hosted by the British Beer and Pub Association at the Budweiser Brewing Group. On 11 February, the Minister of State, Department for Energy Security and Net Zero, my hon. Friend the Member for Croydon West (Sarah Jones), joined me to discuss the glass sector. We have engaged on this issue.

The glass sector lobbied extensively to be excluded from the deposit return scheme. We respected that position, and kept that approach during the final passage of the DRS and pEPR legislation. Legislation on pEPR was supported on both sides of the House, but sadly the DRS was not. My officials have talked with businesses that make and use glass packaging, and we have listened to feedback to ensure that the fees are set fairly. I am very aware of the issues that the glass sector has raised about dual-use items—items that can be disposed of in either business or household waste streams. It has been difficult to find an answer that works for everyone, and because of the issues raised in the debate, I have asked my officials to consult with industry immediately to find the fairest solution.

There has been a lot of talk about small businesses. Many international pEPR schemes offer no exemption for small business. We responded to UK small business concerns by putting in place some of the most generous exemptions of any scheme globally. The exemptions mean that businesses with a turnover of below £2 million, or that place less than 50 tonnes of packaging on the market, are not obliged to pay fees. Those exemptions apply to approximately 70% of UK businesses supplying packaging in the UK. There are quarterly payment options to help with cash flow for larger businesses, and we will watch the de minimis thresholds carefully. If we raised the thresholds, that would put costs on to the remaining businesses, because local authority collection costs would remain the same.

The pEPR fees for glass are lower than those for aluminium and plastic. Because glass packaging is heavier, it costs more to handle per unit than some other materials. We have worked closely with industry and local authorities to make sure that the costs used to set producer fees accurately reflect the on-the-ground waste management operation costs that every taxpayer currently has to pay. Weight is a driving factor in waste management and it is the most common basis used to determine costs for public and private sector collection; that is why it is central to our approach. But the scheme relies on all producers paying their fair share. As my hon. Friend the Member for Ealing Southall said, there was a range, but there was unhappiness with that, so in December we introduced a set point of £240 per tonne. The fewer free riders there are in the system—