Packaging Tax Stings Sausages and Desserts, Fueling Food Inflation

As of October 2025, a new packaging tax aimed at reducing waste and promoting a circular economy has inadvertently contributed to rising food prices across the UK. The extended producer responsibility (EPR) tax, introduced in late 2018, charges businesses for the cost of collecting and recycling the packaging from their products.

While the tax is intended to drive down greenhouse gas emissions and boost domestic recycling, it has had an unintended consequence - adding to the country's cost-of-living crisis. Businesses, particularly small and medium-sized food manufacturers, are struggling to absorb the new costs, with many forced to pass them on to consumers.

Heck, a family-run sausage maker, estimates the tax has added 3p to the price of a pack of its products, and its annual bill has reached £153,000. Similarly, the dessert brand Gü faces a "massive" impact, with its chief executive considering switching from the company's iconic glass ramekins to plastic containers. Overall, the government expects the tax to raise £1.4 billion this year, with over 80% of the costs passed on to shoppers.

While environmental groups defend the levy as an "essential foundation" for a circular economy, the food industry has been vocal in its criticism. Businesses argue the tax was "poorly thought through" and is exacerbating the country's high food price inflation, which remains a significant concern for many households.