Why Food and Drink Needs More Joined-up Thinking

The food and drinks industry in Wales, like its counterparts across the UK, finds itself at a crossroads.  

The past few years have seen a significant decline in investment within the sector, with a staggering 30% drop since 2019. This decline stands in stark contrast to the relatively modest 5% increase observed in other manufacturing sectors.  

A primary driver behind this trend is the wave of regulatory changes emanating from both devolved and national governments. Among these changes, deposit return schemes (DRS) and extended producer responsibility (EPR) schemes have emerged as pivotal factors influencing business dynamics. 

Industry is fully supportive of both EPR and DRS, but the implementation of recycling and deposit return schemes varies across the devolved nations, creating a complex and uncertain landscape for businesses operating within the UK. Deposit return schemes are designed to incentivise the return of beverage containers, thereby promoting recycling, ensuring that a drinks bottle can become a drinks bottle again, whilst also having the added benefit of reducing litter. The Welsh Government remains committed to including glass in their scheme and believe that this decision does not invoke the Internal Markets Act despite the UK Government intervening in Scotland halting the inclusion of glass in the proposed Scottish scheme.  

Our members have consistently championed the environmental benefits of regulatory alignment and interoperability relating to the Deposit Return Scheme. The call for a harmonised approach to policies like DRS is not just about simplifying compliance, it's about fostering an environment where businesses can confidently invest and plan for the future. 

The differing policies across borders and the interpretation of the Internal Markets Act pose a significant challenge for businesses. The border between Wales and England means that consumers often purchase products in one and consume them in another. This cross-border patchwork of regulations complicates and adds expense to the logistics and compliance requirements for businesses and can mean that drinks containers are not collected and recycled.   

The current regulatory ambiguity stifles investment and undermines industry confidence. Businesses need a clear and consistent policy framework to make informed decisions about resource allocation, innovation, and expansion. 

The alignment—or lack thereof—between different nations policies can exacerbate these challenges, creating an uneven playing field and inhibiting cohesive industry growth. 

The divergent approaches to deposit return schemes highlight the need for greater regulatory coherence. Businesses are calling for clarity and stability in government and until such alignment is achieved, the industry will continue to grapple with the uncertainties that hinder its potential.  

We are hopeful that the new Government in Westminster will help facilitate this alignment through a mission led approach to government and with closer working with devolved governments – to bring certainty and clarity around government policy and regulatory changes.