More than 80% of the additional costs of the Extended Producer Responsibility (EPR) packaging tax are likely to be passed onto consumers, according to the latest figures from the British Retail Consortium (BRC).

Additionally, retailers are dealing with a higher administrative and compliance burden due to the new EPR policy, which is expected to push food inflation by 0.5%, according to estimates from the Bank of England.

Andrew Opie, director of food & sustainability at the BRC, said: “Retailers support the polluter pays principle and are making significant changes to reduce and improve their packaging. But the packaging tax is also a multi-billion-pound levy being paid by consumers during a cost-of-living crisis.

Subscribe to Grocery Gazette for free

Sign up here to get the latest grocery and food news each morning

“They will ask: what are we getting for higher prices? Unless funds are spent transparently and effectively, EPR threatens to just be another burden on an already overtaxed industry with no tangible benefits for customers or the environment.”

The survey found 85% of retailers plan to increase the amount of sustainable packaging placed on the market, while close to four in five retailers will decrease the overall volume of packaging on the market.

The BRC is urging the Government to ensure that all the money acquired from the packaging tax will be utilised by local councils towards local recycling efforts.