Whether it’s Net Zero, ULEZ or new oil and gas licensing, government decision-making on environmental policy never seems far from the headlines. This article from Rob Biddlecombe at Brabners considers recent announcements postponing legal measures aimed at promoting sustainability which would have implications for breweries and the drinks industry.
Deposit Return Schemes
Under a deposit return scheme (“DRS”), every time an in-scope drinks container changes hands in the supply chain (for example, from manufacturer to wholesaler, from wholesaler to retailer, or from retailer to consumer), the purchaser pays the vendor a monetary deposit, and the deposit is refunded when the empty container is returned. This is designed to incentivise the recycling of drinks containers.
Scotland was due to introduce its DRS on 16 August 2023, which would apply to drinks containers made out of single use PET plastic, metal and glass ranging from 50 ml to 30 litres. However, the Scottish DRS has been postponed until October 2025, which is when each of England, Wales and Northern Ireland are due to introduce their own DRS. In addition, whilst the Scottish and Welsh governments both intend that glass containers should be included, the English and Northern Irish schemes would exclude glass. Indeed, Westminster has signalled that it will use its powers under the UK Internal Market Act 2020 to block the Scottish DRS from including glass.
Packaging Extended Producer Responsibility
Packaging extended producer responsibility is being introduced to help finance council collections from street bins and of household waste. Businesses will be obligated if they carry out a packaging activity (for example, place their own branded packaged goods on the UK market or import packaged goods) and:
- Have a turnover of between £1m and £2m per annum and handle more than 25 tonnes of packaging per annum; or
- Have a turnover of more than £1m per annum and handle between 25 and 50 tonnes of packaging per annum.
All obligated businesses are required to record and report the quantity and type of packaging that they handle. In addition, if a business carries out a packaging activity, has a turnover of more than £2m per annum and handles more than 50 tonnes of packaging per annum, it will qualify as a “large organisation”.
It had been proposed that, from 2024, large organisations would be charged for the household packaging that they supply or import based on their reports. “Household packaging” is defined as primary packaging (for example, the can or bottle containing the drink) and shipment packaging (i.e.packaging added in addition to primary packaging, on items which are sold online or by a mail order which are either delivered direct to the purchaser or collected by the purchaser from a shop or other collection point after they have been purchased).
However, in July 2023, the Government announced that, although the recording and reporting obligation would continue, charges would not be levied until at least October 2025.
Environmental Permitting
There have been proposals for reforming the environmental permitting regime that could affect breweries and the drinks industry. For example, in June 2022, the Government consulted on requiring large businesses in the sector that produce food (including drinks) waste to either obtain an environmental permit or register an exemption, a condition of which would be that the business regularly reports on the amount of food waste generated.
However, in July 2023, the Government announced that it had decided not to proceed with this proposal, citing concerns that any additional costs would be passed onto customers. Furthermore, the longstanding proposals to bring water abstraction and impounding within the environmental permitting regime still show no signs of materialising.
Conclusion
Whilst some will welcome less environmental regulation at a time of high inflation, high interest rates and low growth, others will be concerned that these announcements will impede the drive towards sustainability in the sector. However, unless government in the UK provides more certainty that these highly anticipated initiatives will be implemented on time (or at all), it is difficult for businesses to plan, prepare and budget for future years. For that very reason, it is important that manufacturers take proper legal advice around their environmental obligations to avoid unwitting breaches of the legislation and the financial penalties and negative publicity that can ensue.
