Could new tax for retailers push up prices for shoppers?

A new packaging tax could lead to shoppers being charged higher prices, retailers have warned.

The Extended Producer Responsibility (EPR) scheme, which was introduced at the start of October, was designed to encourage companies to cut back on excess packaging and use more sustainable materials.

But some industry groups believe it will create extra costs and bureaucracy for businesses.

As a result, many retailers could be forced to put up prices at a time that many households are already struggling with rising living costs.

What have business groups said?

The Food and Drink Foundation has described the new tax as “an additional burden” on the industry, following the recent increase in national insurance contributions.

Speaking to BBC News, head of corporate affairs Jim Bligh said: “Inevitably, that means food prices will increase.”

The British Retail Consortium (BRC), meanwhile, has insisted that retailers “support the polluter pays principle” and are making big changes to reduce and improve their packaging.

But director of food and sustainability Andrew Opie said the packaging tax is “also a multi-billion pound levy being paid by consumers during a cost-of-living crisis”.

“They will ask: what are we getting for higher prices?” he commented.

The BRC added that unless funds are spent “transparently and effectively” in areas such as local recycling services, EPR could be “just another burden on an already overtaxed industry, with no tangible benefits for customers or the environment”.

What can you do?

Food inflation hit 5.1% in the year to August, official data shows.

That’s the fifth month in a row in which this figure has gone up.

However, there are practical steps you can take to try to keep the cost of your groceries down, such as planning your meals in advance and basing them around store cupboard staples like pasta, rice and tinned tomatoes.

We’ve put together a list of ten ways to save money in the supermarket to help make your money go further.

It could also be worth taking a close look at how much money you have coming in and where it’s going, so you can prioritise your spending and work out where savings can be made.

Check our guide on how to create a budget to get started.