Industry developments in response to the Plastic Packaging Tax

The Government’s Plastic Packaging Tax (PTT) was introduced in April 2022 to tackle single use plastic. However, since then the whole approach has come under fire as campaigners and industry critics are concerned it isn’t working out quite as they planned.
It is undeniable that external factors have had an impact on the introduction of the tax, as it hit the UK at a time when many sectors face significant inflationary pressures affecting the price of goods, energy and materials, along with growing demand for wage increases. Resulting in the tax representing another additional cost for businesses falling above HMRC’s threshold. On top of that, the Government, recognising the issues, is further consulting with industry on how to ensure it is more effective.

However, long before the tax was introduced, thoughts on the PPT had always been mixed. Those who have felt they have been hit the hardest are food manufacturers, who have argued that the Government has not provided any exemptions for materials that come into contact with food and cannot be recycled. As a result, such businesses have had no choice but to pay the tax, which consequently could lead to increased costs that would then almost certainly be passed on to consumers. It seems the general consensus is that the cost of switching to recycled material is so great, that they are deciding to take the hit and pay the tax. This is especially true for smaller businesses.

While the PPT has had an impact on us at Southgate, we felt we should embrace this change, and we have seen a positive impact. For example, over the past year, the PPT has meant we have moved from what were previously products that used virgin materials, to products that are a minimum of 30 per cent recycled. By making these and similar changes only around 15 per cent of our products are now impacted by the PPT, which certainly proves that the tax can be a strong incentive to get the right outcomes for the planet.

As the UK’s levels of virgin plastic raw material continue to rise, it’s important to focus on the long-term benefits of this tax and as one of the top five processors of plastics in Europe, the introduction of this tax might still be the ultimate solution the industry was waiting for.

As it provides a clear incentive for businesses to use recycled material in the production of plastic packaging, we’re excited to see the ongoing benefits as we protect ecosystems, save energy, reduce the demand for raw materials and cut carbon emissions. This is an exciting time for positive change, and we plan to continue to educate and support our customers and demonstrate the benefits while working with them to develop new products.