EPR Guide - Flipbook - Page 32
Who Ultimately Pays?
(Pricing and Contracts)
One strategic question: do producers absorb these costs, or pass them down the supply chain?
In practice, we’re seeing a bit of both:
• Passing on to Customers: Many businesses are treating EPR fees as a cost to incorporate into
product pricing (like any other input cost). For B2B transactions, this might mean adjusting the unit
price of goods upward to cover the packaging fee. Some have chosen to list it as a separate line
item (“packaging compliance surcharge”) on invoices, though this depends on market power and
customer acceptance.
• Contract Clauses: If you have long-term contracts, especially for supplying packaging or contract
manufacturing, check them. If you’re a packaging supplier selling to small businesses, remember
you might now be paying fees for the packaging you sell (because your small customers are not
obligated), effectively reducing your margin unless you’ve accounted for it. It would be wise to
update contracts to clarify EPR responsibilities and perhaps include price-adjustment mechanisms
tied to EPR costs. For instance, a clause that if EPR fees increase by X%, you can raise prices by X%.
• Absorbing the Cost: Some consumer-facing companies might swallow the cost initially to avoid
price hikes in the market. But even those companies will be looking to mitigate costs through
packaging changes (see next section on reduction strategies).
For logistics and transport service providers, if you’re now doing extra work (recording packaging,
maybe paying fees for transit packaging), you may need to revise contracts with your clients. For
example, a 3PL that packs orders for a retailer might stipulate that the retailer remains responsible for
EPR fees on all packaging the 3PL uses (since it’s effectively the retailer’s end-consumer packaging),
and that the retailer will supply necessary data or compensation.
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