Contribution
My hon. Friend is right. I am quite jealous that he has all those wonderful breweries in his patch. The pub and brewing sector is fantastic, and I really enjoy working with it, but I know how hard it is finding things and how it is striving to get to net zero. It wants to be part of this conversation and part of the solution. I take my hat off to that excellent sector.
Secondly, the sector would welcome a quick resolution from Government on the double charging issue, which the British Beer and Pub Association says is costing pubs and breweries nationwide an additional £50 million a year. They pay the EPR charge passed on by suppliers as well as their existing commercial waste disposal fees for the same items, including beer and wine bottles or food containers that never leave their premises. The Department for Environment, Food and Rural Affairs has agreed that double charging is unfair and against the intentions of the policy. It has suggested that the earliest it can be rectified is 2028, but that is three years from now.
This issue needs to be resolved as soon as possible or smaller breweries such as Gower brewery will go under. Double charging means that not only does Gower brewery pay more to suppliers for its bottles and packaging, it pays Swansea council for its commercial waste collection. A simple clarification from Government would help the industry: the beer sector would like DEFRA to amend its guidance to provide more flexibility on how producers can account for EPR fees. As currently drafted, the rules prevent producers from accounting for the accrual of EPR payments across a 12-month period, which means that businesses are having to absorb the hit in one go in April.
On a positive note, there is no doubt that the pub and brewing sector and wider hospitality share the Government’s ambitions for well-designed schemes to reduce packaging, increase recycling rates and build a functional circular economy. However, on a practical level, it is proving difficult. As well as the increased packaging fees, there are additional admin costs related to the time needed to fulfil EPR requirements. Laura from Gower brewery explained that every item of packaging has to be weighed and logged on a portal, from the bottle to the cardboard tray it is packed in and the plastic it is wrapped in. Each business it supplies has a separate portal, making it a lengthy task.
There is also future uncertainty for businesses, which is not good for jobs or growth. For example, Laura is concerned about how each supermarket will approach EPR in the coming months. What if, say, Tesco decides that it wants her brewery to abandon plastic wrapping in favour of a cardboard box? Gower brewery would then have to find space for lots of flat-packed boxes. That uncertainty is shared by the whole sector, particularly because of the delayed confirmation of the final level of fees required under EPR and the retrospective nature of charging. Those two issues have made it extremely difficult for businesses to plan and to understand the level of investment needed to meet the new obligations.
An urgent solution must be found to the double charging issue, which is unfairly placing additional costs on pubs. If a long-term solution is not possible until 2028 at the earliest, some form of interim measure would go part of the way to addressing the issue. A review of the fees for glass is necessary. They are too high and could have unintended consequences that would cause an increase in the use of less recyclable packaging materials such as plastic. It would also be helpful if DEFRA amended its clarifying guidance to provide more flexibility on how producers can account for EPR fees so that they do not have to absorb the hit in one go in April.
I welcome the opportunity to raise this issue for the pub and brewing sector, which has faced tough economic headwinds. These increased costs for businesses will inevitably impact the price of food and drink for consumers and the cost of living. The Government estimate that in the region of 85% of the cost of EPR will be passed on to consumers.
It is also worth noting that EPR is only one part of a complex packaging regulation landscape—I know the Minister is aware of that—which includes the plastic packaging tax, packaging recovery notes, regulation on single-use plastic items, and the forthcoming deposit return scheme. Consistency of policy across the four nations of the UK is crucial. The Welsh Government propose to keep glass as part of their DRS, whereas that is not the case for the rest of the UK.
I am grateful for the opportunity to raise this issue in Parliament. The pub and brewing sector has faced a bit of a battering from policies in the last year. I thank the Minister for listening, and I look forward to what she has to say about EPR.