Retailers across the United Kingdom are facing an unexpected surge in costs following a doubling of fees under the Packaging Recovery Note (PRN) system, according to new industry data. The price spike adds roughly £100m to the sector’s expenses this year, prompting renewed warnings that consumers will inevitably feel the pinch at the checkout.
New analysis published by the British Retail Consortium (BRC) reveals that the average price per tonne for plastic PRNs has escalated from around £180 in 2025 to over £370 in 2026. The trade body is urging ministers to dismantle the 1990s-era mechanism and fold it into the government’s newer environmental framework.
The ‘Triple Charge’ Dilemma
The PRN system—originally established nearly three decades ago to foster commercial recycling—operates as a market-traded compliance instrument. However, industry figures warn that businesses now face overlapping layers of packaging regulation, creating an administrative burden where firms are effectively billed three times for the same item:
Packaging Recovery Notes (PRN): Volatile market-driven permits designed to certify that packaging waste has been recovered.
Plastic Packaging Tax (PPT): A levy on manufactured or imported plastic packaging containing less than 30% recycled content.
Extended Producer Responsibility (EPR): The government’s flagship £1.5bn a year framework requiring producers to cover the full net cost of managing household packaging waste.
Retailers argue that this overlapping regulatory framework creates unnecessary red tape while doing little to guarantee physical improvements to national waste management.
The £100m packaging hike comes at a difficult juncture for the sector. Retail margins have been stretched thin following cumulative increases of £6.5bn over the last two years from employment overheads, including National Insurance Contributions (NICs) and the National Living Wage (NLW), alongside persistent pressure from business rates and commercial energy tariffs.
Industry leaders warn that retailers have little headroom left to absorb further overheads, making it likely that these rising operational expenses will filter down to household shopping bills.
Critics have long pointed out structural flaws in the PRN model, describing it as an erratic trading scheme that enables speculative price swings without expanding domestic sorting facilities or plastics reprocessing capacity.
The BRC is pressing the government to eliminate the PRN system entirely and consolidate recycling compliance solely under the EPR scheme. In addition, the retail lobby is seeking statutory protections to ensure that EPR levies collected from businesses are strictly ringfenced rather than absorbed into general council budgets or diverted to service local authority debt.
Andrew Opie, Director of Food & Sustainability at the BRC, stated:
“The Packaging Recovery Note system is outdated, inefficient, and completely unnecessary. Rather than charging retailers – and ultimately consumers – three separate times on the packaging they use, government should streamline this process and run recycling through its flagship EPR scheme. This would allow the government to save businesses and households £100m, without compromising the UK’s recycling efforts.”
Opie emphasized that policy reform must translate directly into tangible environmental improvements on the ground:
“We need Government to simplify the system by folding PRNs into a single EPR framework. Furthermore, if they want to make a real difference to UK recycling rates, EPR funds must be ringfenced, guaranteeing that all money raised is used by local councils to create and operate a world-class recycling system that collects and processes as much recyclable material as possible.”
