Gordons retail update - retailers face unlimited fines from Environment Agency

Retailers could  face potential fines running into millions of pounds due to an Environment Agency crackdown on breaches of packaging regulations.  Gordons head of regulatory, Katherine Southby warned companies in February 2008 that the Environment Agency had been conducting a sweep of businesses across Yorkshire, prosecuting for breaches of the Producer Responsibility Obligations (Packaging Waste) Regulations 2007, and that each breach of the regulations attracted a criminal penalty of an unlimited fine.

Since then a number of retailers and manufactures, including Red Bull and Jemella Limited, have found themselves facing fines for not registering with the Environment Agency or complying with the rules.

What are the rules and how do they apply ?

The regulations apply to any business that manufactures raw materials for packaging or converts raw materials into packaging. It also covers fill packaging - putting goods or products into packaging - selling packaged goods to the final user or importing packaging, packaging materials or packaged goods into the UK. 

Businesses with a turnover of more than £2m that handle more than 50 tonnes of packaging a year need to assess and calculate their own obligations under the packaging regulations and submit them to the Environment Agency or join a registered scheme. If a business handles more than 500 tonnes a year then it must produce an operational plan by January 31 each year.

Whilst the cost of a compliance scheme is relatively modest, the Environment Agency has been prosecuting retrospectively for past years' breaches.

It is also important to note that if your business belongs to a group of companies, then the regulatory requirements can apply to the total amount of packaging handled by the group. This means the regulations also impact upon franchisors and companies that lease property.

Retailers who have not yet registered can do so through the Environment Agency for the preceding trading year, but it is not possible to register retrospectively.  For those who have omitted to register over a number of years retrospective liabilities can prove to be substantial and it is important to take steps to become compliant going forwards, and to analyse the possible contingent liability that the business may face in unpaid fees and contributions.

For further information, contact Katherine Southby, Head of Regulatory at Gordons LLP

Published: 20th October 2009

Back to top