Rethink ‘net zero grocery tax’ else prices will rise, warn retailers

Retailers have urged the government to rethink plans for green levies to fund the recycling of food packaging, warning it will give result in spiraling food costs.

The British Retail Consortium (BRC) has warned the scheme, dubbed the ‘net zero grocery tax’, could push up shopping bills by up to £4bn a year, or £140 a year per household, Sunday Telegraph reported.

“Just as inflation looks to be turning a corner, these new policies put this at peril.”

Ministers are urged to reconsider whether plans should be “postponed or scrapped”.

The BRC’s call – which includes the voices of major supermarkets Tesco, Sainsburys, Aldi and M&S – was echoed by Tories including Jacob Rees-Mogg. Brexit-backing Rees-Mogg warned that Brits faced “paying the price with empty shelves in supermarkets and more expensive food”.

“If this is our approach to net zero, our voters will punish us harshly,” he said.

The new scheme will charge shops and manufacturers to meet council costs of recycling packaging but will increase shopping bills for households. It was devised by Michael Gove while environment secretary and was billed as helping to cut waste and meet net zero.

It comes as polling reveals almost two in three voters believe the impact of Brexit played a part in soaring food prices and inflation, as the UK is embedded in a cost of living crisis.

Researchers found 62 per cent think the UK’s exit from the EU has negatively affected the cost of groceries, according to the i and BMG Research pollsters.

The survey found this included 42 per cent of leave voters, while 39 per cent disagreed.

Separately the Food and Drink Federation linked Brexit factors to increased prices, citing “friction at the UK’s borders and persistent labour shortages”.

A spokesperson for the Department for Environment, Food and Rural Affairs said: “Growing the economy is an immediate priority for this government.

“Supporting businesses to grow is a crucial part of this – which is why we want to ensure a simple and effective system for our extended producer responsibility and deposit return schemes that benefit both businesses and consumers.

“We have been engaging closely with manufacturers, retailers and packaging companies of the design of these schemes and on delivery plans. We will continue to work with these groups as we finalise plans to ensure the schemes will deliver environmental goals.”