Packaging tax could be ‘catastrophic’ for small food businesses, brands warn

Small food companies all over Britain warn that the new government packaging tax can have severe consequences, imposing high prices, damaging money, and even putting some companies from work.

The “Extensive Product Responsibility”, which was announced in December, requires a company with more than one million pounds in annual sales and the use of more than 25 tons of packaging to pay fees designed to improve the recycling infrastructure. The compliance costs are expected to reach 1.4 billion pounds throughout the sector in the first year alone, according to the Food and Drink Federation.

For Nadine Maggi, the founder of Sweet Freedom, which results from natural differences and drink, the new charge is the last straw in what it describes as the most difficult trading environment in 15 years. The tax will be removed from its company with an additional bill with a value of 50,000 pounds this year – in addition to the high prices of cocoa, minimum wage devices, and high national insurance costs – leaving sweet freedom facing its first loss in years.

Maggie said: “This is more difficult than anything that I faced in my entire career,” Maggie said. Prices have already increased by 12 percent due to the high costs of ingredients, but they are reluctant to raise them again, for fear that sales will harm. Instead, you cut public expenditures and withdraw work abroad at home.

The EPR can be “existential” for many smaller brands. His company expects, with annual sales of 7 million pounds, a bill of $ 200,000 pounds. “If this happened a year ago, I am not sure that we had survived,” he said.

McDonald and more than 100 food companies argue that the changes have been badly connected and will not affect SMS. They claim that many small and medium companies that are only familiar with their responsibility, although the Ministry of Environment, Food and Rural Affairs insists that it has implemented a “wide participation”.

Katie Gyeet, Executive Director of Operations at Momo Composha, a drinking company south of London, said her business will strike at more than 100,000 pounds at additional costs next year, which delayed the expected tie point for at least 12 months. Momo uses glass bottles, which is a sustainable but heavier material that attracts higher fees under the new system.

“There are hundreds of companies that will get out of work,” Gyenet warned. “They have no concept on how small companies work in the UK.”

He repeats feelings throughout the industry. Liam White, the co -founder of the spice industry, Dr. Wales, said that he may need to collect additional capital to deal with the added cost burden of 35,000 pounds. “He adds to the cocktail the things that keep you awake as a small commercial owner,” he said.

Despite the installation pressure, government advisers and compliance experts suggest that companies should prepare for new rules instead of expecting a re -postponement. “These regulations will not disappear,” said John Redmainne, Managing Director of the European Recycling platform.

The government confirms that the EPR plan will create 21,000 jobs and lead 10 billion pounds from the recycling of the investment over the next decade. “We are committed to breaking waste and increasing recycling, with the expanded responsibility for the package the first vital step for our packaging repairs,” said a spokesman.

However, for many entrepreneurs, the direct reality is a blatant one: a sudden and costly burden that threatens to suffocate growth just as companies arise from the challenges of Britain’s exit from the European Union, Covid-19 and inflation. Maggie said: “The government talks about economic growth, but what they do is strangle the entrepreneurs and small companies that lead it,” Maggie said.