The builders’ merchants sector needs close collaboration with product manufacturers and Suppliers if it is to mitigate the impact of a looming increase in plastic packaging tax, according to National Buying Group (NBG).
The advice comes after analysis with NBG Partner, Kellaway Building Supplies, revealed a potential 2,400% increase in tax as the government looks to address the volume of plastic packaging in routine use and to fully recover the cost of recycling waste.
The first change is the new UK’s Plastic Packaging Tax from 1 April 2022 which will see products imported and packaged in the UK in plastic packaging, with less than 30% minimum recycled content, subject to a £200 per-tonne tax.
This will be followed sometime later by the Extended Packaging Producer Responsibility legislation when merchants will likely be 100% responsible for the cost of recovery of all ‘consumer-facing’ packaging, and the cumulative effect of both could be severe without action.
Last week the government pushed back the planned implementation date from April 2023 to an as yet unspecified date, but Nick says this should not lead to complacency.
In a bid to mitigate the potential impact of the increased charges on its independent merchants, NBG has embarked on a collaborative project with the help of a packaging specialist along with a core group of its Partners, namely Kellaway Building Supplies, Frank Key Group, Hughes Forrest, Palladium Building Supplies and also Suppliers, Aggregate Industries, Cemex UK, Etex, Forterra Building Products, Knauf Insulation, Ibstock Brick, TIMCO and Toolbank.
Nick Oates, managing director at National Buying Group said: “Plastic packaging remains widely used across the building products sector for items such as bricks, plumbing, drainage, kitchen, trade counter and bathroom products, which means these tax changes will reverberate across the supply chain.
“With merchant businesses carrying the cost burden, ideally redesigning packaging to eliminate or reducing plastic content is best, if they are to avoid a financial cliff-edge. If this is not possible the next best choice, will be switching to packaging containing 30% recycled content or more, all which must be supported by providing evidence based accurate product data.”
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