Retailers are facing an additional £100m packaging bill after the cost of plastic Packaging Recovery Notes (PRNs) more than doubled in a year, prompting the British Retail Consortium (BRC) to call for the outdated system to be scrapped.
The average price of plastic PRNs has risen from around £180 per tonne in 2025 to more than £370 in 2026, according to BRC analysis. The organisation warned that retailers, already facing mounting employment, business rates and energy costs, will be unable to absorb the increase, meaning higher costs could ultimately be passed on to households.
PRNs are one of three overlapping packaging costs, alongside the Plastic Packaging Tax (PPT), and the Government’s new £1.5 billion a year Extended Producer Responsibility (EPR) scheme.
The result is that retailers often end up being charged multiple times for a single piece of packaging. The BRC is calling on the Government to immediately phase out the PRN system and roll it into the EPR framework. Moving to a single, streamlined system would remove unnecessary red tape and eliminate this triple charge.
Retailers have been hit by significant additional costs in the last few years, including increases to employment costs, such as employer NICs and NLW, which have cost the industry £6.5 billion in the last two years. Meanwhile, retailers are paying more in business rates and energy costs, putting more pressure on paper-thin retail margins.
The result is that retailers cannot absorb further costs, and increases – such as £100m extra on PRN – will inevitably filter through to already-squeezed households.
Since PRNs were introduced in the 1990s, the speculative market has been plagued by a lack of transparency and extreme price volatility.
Rather than driving planned, predictable investment into the circular economy, the PRN mechanism has become an erratic trading scheme where prices can double in twelve months without any meaningful improvement in the UK’s recycling capacity or infrastructure.
PRNs were first conceived of nearly thirty years ago and are no longer fit for purpose.
The Government should start by simplifying packaging’s fragmented regulatory landscape and phasing out PRNs, folding them into the EPR framework. Then, it must put in place strict legal restrictions to ringfence all EPR revenues, guaranteeing that funds cannot be diverted into general local authority budgets or used to service council debt.
To improve UK recycling rates, funds must be invested directly into modernising the UK's collection, sorting and reprocessing infrastructure.
Andrew Opie, Director of Food & Sustainability at the British Retail Consortium, said: “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.
“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.”