Food prices to jump £160 per household thanks to new “ill thought out” recycling regulations

Industry

Food costs for the average family are set to jump £160 a year thanks to new “ill thought out and rushed through” government regulations set to be introduced.

According to a new report from the Food and Drink Federation (FDF), reported by The Grocer, dramatic food price inflation is all but inevitable over the next few years.

Food suppliers are reportedly facing around £8.3 billion in extra costs between 2022 and 2024 if new regulations forcing the industry to take more responsibility for recycling and waste costs are brought in.

“Due to the constraints of existing supply contracts, manufacturers are very likely to have to absorb these costs during the first year of implementation of the policies (2022-2023),” the report read.

“Due to the already reduced margins, these costs are likely to be largely passed on to consumers the following year.”

These new regulations include the upcoming deposit return scheme (DRS) on packaging, expected to cost the industry £850 million and the introduction of Extended Producer Responsibility (EPR).

EPR is a scheme aiming to “incentivise producers to design packaging that is easy to recycle” by charging them the full net cost of managing the packaging once it becomes waste.

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The FDF says, based on Treasury estimated, this will cost the industry £1.7 billion.

According to the trade body these “ill thought out” proposals will force the industry to raise food prices in order to stay afloat.

The FDF’s chief executive Ian Wright added: “Through the last 16 months our workers have made truly heroic efforts to keep the country fed. Yet now they face a combination of challenges which threaten to deliver food price inflation to already hard-pressed households.

“We absolutely accept the need to address the pressing concerns around sustainability and obesity. Our members are doing so on an epic scale through active commitments to net zero and reformulation. The government needs to understand the costs of the changes it is demanding and the impact it would have on the cost of household food and drink shopping.”

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