Plastic packaging costs drive up food prices in the UK

British shoppers face rising food prices as retailers pass on increased plastic packaging costs to consumers. These hikes are driven by government policies aimed at achieving carbon neutrality.

The British Retail Consortium (BRC) reports that retailers are facing a cumulative series of fees related to packaging. Analysis shows that the cost of plastic under the packaging retrieval and recycling system is expected to more than double, rising from approximately £180 per tonne in 2025 to over £370 in 2026. This increase alone is projected to add roughly £100 million to retailer costs this year.

Retailers are currently navigating three overlapping systems: the packaging retrieval and recycling scheme, a plastic packaging tax, and a new government ‘extended producer responsibility’ plan, which is estimated to be worth £1.5 billion annually. Andrew Obie, the BRC’s food and sustainability director, has called on the government to simplify the system to avoid charging retailers and consumers three separate fees for the same packaging.