Tomorrow marks the introduction of the Extended Producer Responsibility levy, a government scheme that will push up the price of drinks across Britain.
Wine bottles will rise by 9p, beer bottles by 4p and spirits by 11p as disposal costs are shifted to producers.
The levy is designed to boost recycling rates, but its weight-based calculation means glass packaging faces far higher costs than lighter alternatives such as plastic.
The timing adds to pressure on businesses and households already hit by rising costs.
The hospitality sector has lost 89,000 jobs this year, according to UK Hospitality, and now faces another financial blow.
More than 80 per cent of the cost of the new packaging tax is likely to be passed on consumers, industry leaders have warned.
Critics say the scheme penalises glass despite its potential environmental advantages.
Glass is infinitely recyclable and chemically inert, unlike plastics which can leach harmful substances, whilst British manufacturers invest heavily in greener production.
Tomorrow marks the introduction of the Extended Producer Responsibility levy, a government scheme that will push up the price of drinks across Britain
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PA
The new tax – or the extended producer responsibility (EPR) scheme, for which firms must submit their latest data on the packaging they have used by October 1 – is likely to place a “significant financial burden” on UK retailers and households, a survey of leading retailers for the British Retail Consortium (BRC) suggests.
The BRC said the industry had been left little room to absorb any extra costs following last year’s budget, when retailers were hit with £5billion in extra employment costs due to higher employer national insurance contributions and the rising national living wage.
Encirc, which employs 2,000 workers in Cheshire, Bristol and Northern Ireland, has developed hydrogen-powered furnaces and run biofuel trials. Yet tomorrow’s levy rewards lighter plastic packaging over sustainable glass, undermining the government’s green objectives.
Sean Murphy, managing director at Encirc, called the levy “an economic and environmental own goal”.
He said: “This tax will hit everyone — in the supermarkets, pubs, and glass factories that create thousands of jobs. It is a bitter blow for businesses such as ours which are investing heavily in green technology.”
Industry leaders warn the scheme could deter investment in eco-friendly packaging and drive up consumer prices
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Mr Murphy urged ministers to rethink the policy, stating: “The Government must hit the pause button on this. An arbitrary measurement based on the weight of materials unfairly penalises glass and just doesn’t work.”
Industry leaders say the scheme risks discouraging investment in sustainable packaging while increasing costs for consumers. The hospitality industry, already struggling with rising national insurance and energy bills, warns tomorrow’s bottle price increases will intensify financial strain.
Andrew Opie, director of food and sustainability at the BRC, said: “Retailers support the polluter pays principle and are making significant changes to reduce and improve their packaging.
“But the packaging tax is also a multi-billion pound levy being paid by consumers during a cost-of-living crisis. They will ask: what are we getting for higher prices?
“Unless funds are spent transparently and effectively, EPR threatens to just be another burden on an already overtaxed industry with no tangible benefits for customers or the environment.”
John Lewis projects a £29million hit from the scheme alone
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GETTYSupermarkets also expect major impacts, with costs likely to be passed on to shoppers.
John Lewis projects a £29million hit from the scheme alone.
The levy’s arrival, just days before the Budget, creates fresh uncertainty for businesses seeking stability.
For glass manufacturers and hospitality venues in particular, it represents another burden at the toughest possible time.
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The levy comes as Britain’s pubs battle soaring costs and mounting tax pressures.
More than 200 have shut their doors already this year, with landlords warning Labour is “killing the industry”.
Rising energy bills, higher wages and new taxes have left many venues fighting for survival.
With more price rises set to hit tomorrow, fears are growing that countless more pubs could soon call last orders.