Almost 500 businesses have been incorrectly charged multiple times under the Government’s new packaging compliance scheme after a “technical issue” led to double direct debit withdrawals during one of the busiest trading periods of the year.
PackUK, the agency set up to administer Extended Producer Responsibility (EPR) charges, confirmed that 484 producers, around 11 per cent of registered producers, had to receive repeated payments for packaging waste without warning. Industry estimates suggest the error has resulted in hundreds of thousands of pounds being mistakenly withdrawn from business accounts, with some amounting to seven-figure sums.
Among those affected was Benchmark Drinks, which produces famous wine brands for Kylie Minogue, Graham Norton and Sarah Jessica Parker. Chief executive Paul Schaafsma said his finance team alerted him after three identical payments totaling around £700,000 disappeared from the company’s bank account.
“We’re lucky that we have a decent amount of cash,” Schaafsma said. “But for businesses struggling for cash or short on cash at this time of year, taking three times your EPR amount is simply irresponsible. For some producers it will be millions, and they have to pay staff and suppliers. How can something like this even happen? Nobody else takes a direct debit three times.”
PackUK emailed affected businesses on Wednesday saying “urgent action” would be taken and promised refunds “by close of play on Friday 5 December”. But when Schaafsma and his team left for their Christmas party that evening, she received no refund.
The error is the latest setback for the much-criticised EPR system, which many food and drink companies have described as a “stealth tax”. Under the EPR, responsibility for the entire cost of collecting, sorting and recycling packaging shifts from local governments to manufacturing companies. This reform aims to incentivize better design and waste reduction.
But manufacturers say the system is far more complex and expensive than ministers proposed, with unclear reporting requirements, uncertain cost estimates and concerns that rising compliance fees will ultimately be passed directly on to buyers.
“The government talks about keeping inflation down,” Schaafsma said, “but the irony is that with these secret taxes the government is causing more inflation than anyone else. There is no accountability, we are just told to shut up and pay the bill.”
A spokesman for the Department for Environment, Food and Rural Affairs said the error was due to “an external financial services provider”, adding: “We are aware of the inconvenience this has caused and have been processing refunds to all affected businesses.”
