Families could soon be facing higher grocery bills that have nothing to do with inflation, it is being warned. The government’s pledges on net zero targets could hit prices on supermarket shelves across the UK.
A new levy could tack on £56 to grocery bills, according to the government’s calculations. And some supermarkets claim it could actually add up to £70.
The levy is expected to come into play next year, charging retailers a “grocery tax” charge for every tonne of packaging materials they use. The green levy is intended to tackle waste among manufacturers to help meet net zero targets for the UK.
Known formally as the Extended Producer Responsibility strategy, it was originally created by Rishi Sunak’s government. It will see retailers and manufacturers paying higher fees for materials like plastic, at £485 per tonne according to the Nottingham Post.
That’s compared to recyclable options like paper at £215 per tonne. Analysis by the Department for Environment Food and Rural Affairs reveals the impact of the levy, with the government expecting between 85% and 100% of the levy’s cost to be passed on and reflected in consumer prices.
The assessment found it could lead to either £28, £48 or £56 extra on grocery bills depending on various circumstances. The scheme will be enforced from January 1, 2025 and is expected to be reflected in supermarket pricing later in the year.
Ministers have been accused of “quietly” rolling out the legislation. Lord McKinlay, a Tory peer and chair of the Net Zero Scrutiny Committee, said: “The rapidly introduced, yet little noticed ‘grocery tax’ legislation, has quietly landed. It heaps more than a billion pounds of new and unnecessary costs on consumers, but as ever when government departments estimate implementation costs, these are often hopelessly underplayed.”
Net zero targets will also be hitting consumer pockets through driving costs, additional taxes on flights, “boiler tax” returning and the carbon border adjustment mechanism, according to The Telegraph. A Defra spokesperson told the Express: “This government will end our throwaway society and stop the avalanche of rubbish that is filling up our streets by increasing recycling rates, reducing waste and cracking down on waste crime.
“Extended producer responsibility for packaging is a vital first step for our packaging reforms which will create 21,000 jobs and stimulate more than £10 billion investment in the recycling sector over the next decade. We continue to work closely with businesses, including the glass industry, on these reforms. We set out illustrative fees which are lower for almost all categories than originally proposed, including for glass.”