EPR Guide - Flipbook - Page 33
Margin and Pro昀椀tability Impact
As EPR is ongoing, producers must factor these fees into margin calculations.
For a manufacturer, the packaging cost used to be just the raw cost of packaging
materials. Now, the disposal cost must be added to the lifecycle cost. This
could shave margins if not managed. Some businesses, like those in heavy
packaging sectors (food & drink, fast moving consumer goods) could see a few
percentage points of revenue going to EPR fees annually. It’s essentially a new
tax-like expense (indeed, some call it the “packaging tax”).
Finance teams should create scenarios: e.g., “If we grow sales by 10% (hence
packaging tonnage ~10% up), our EPR fees will also rise proportionally, unless
we change packaging.” Similarly, if your product mix shifts to more plastic vs
glass, what does that do to fees? (Plastic is costlier per tonne than glass under
current rates, but glass is heavier per unit, so it’s a balance.)
In昀氀ation and EPR: The initial introduction of EPR fees in 2025 contributed to cost
in昀氀ation in goods, effectively a new environmental cost passed into consumer prices.
The UK government did anticipate a small upward impact on consumer prices due
to producers passing on EPR costs. Companies should be prepared to explain this to
customers or internally. It’s equivalent to energy cost increases or tax changes, part
of doing sustainable business.
33
