Last month’s Spring Statement marked a new season for Government policy-making – a Treasury team on the hunt for revenue-raising measures to turn around the gloomy OBR growth forecasts. The pressure to deliver is on, and FMCG businesses will be shouldering a big portion of this burden. 

As the days get longer, so does the business to-do list. Grayling’s annual trends report surveyed 500 senior business leaders, which found 57% are concerned regulatory risks have increased in the past 12 months, and 39% said regulatory updates are the biggest issue to tackle in 2025.  

So how can businesses navigate the challenges lying ahead? Here’s what you need to know. 

Packaging Extended Producer Responsibility (pEPR) risks undermining the Government growth agenda – and there’s just 60 days to get this right. 

pEPR has been in the long grass for seven years. And yet, with invoicing starting this October, the scheme is far from ‘roll-out ready’.  

The CBI estimated the policy could cost manufacturers £2 billion annually – on top of other mounting costs such as business rates bills doubling, National Insurance contributions rising, and employment rights reforms adding a further £5 billion.  

But outside the industry, pEPR had gone somewhat under the radar – until now. In fact, pEPR Google searches are the highest they’ve ever been: a staggering 12,100 this February. 

The Government is in a tight spot. With mounting scare stories of potential job losses and manufacturing site closures, Number 10 will be keen to avoid any announcements that contradict its central mission: growth, growth, growth.  

This has been compounded by the OBR’s Spring Forecast, which admits pEPR will mean no material impact on recycling rates or packaging waste volumes in the next five years.  

FMCG businesses face a short but crucial window to feed in evidence that pEPR fee levels stand contrary to that all-important growth agenda, before PackUK publishes the final base fees in June. 

The heat is about to turn up on food and health policy.  

Defra has promised a new Food Strategy this summer. Will this be a resurrection of Henry Dimbleby’s 2021 iteration? If so, we could see taxes on sugar and salt used in processed foods, a clamp down on so-called Ultra-Processed Foods, and a revisit of the previously floated ‘meat tax’.  

And it’s not just Government considering its next steps to tackle HFSS products – the EFRA Committee is pursuing the pre-election inquiry into Fairness in the Food Supply Chain, which saw multiple brands face a tough rap for rising food prices and product formulation. 

However, Cabinet-level disagreements over the merits of sin taxes and concerns over placing additional financial burdens on consumers could put a halt on punitive action. Whilst the Strategy contents is far from certain, policy development is already underway and will provide a roadmap to the next 10-years of food and farming policy.  

Ignore re-use at your peril – it’s the new Circular Economy buzz word.  

Just 12-months ago, the term ‘circular economy’ left political heads scratching. But with a refreshed ministerial team and a new Circular Economy Taskforce up and running, it’s back in the political lexicon. 

As the Taskforce gets ready to report this autumn, there is a clear ambition to shift towards new innovations higher up the waste hierarchy. Cue re-use and repair, which should breathe new life into Labour’s sustainability ambitions and find an enthused bench of political advocates in the youngest, most environmentally conscious Parliament we’ve seen.  

FMCG businesses must leverage industry experience to get on top of this political trend early and offer constructive solutions, to get ahead of mandatory targets with voluntary action. 

Defra ministers may be tough to engage, so it’s time to think outside of the box. 

Defra has recently proved a tough nut to crack. Commentary on X evidences a 69.3% negative approval rating for Defra Secretary Steve Reed MP, and a 73.6% negative rating for the Department itself. One MP even stated in the Commons last month, “I am starting to feel like Defra ministers are purposefully ignoring me”. 

With a raft of new Defra policy papers and strategies due for publication this year, as well as Dan Corry’s recent regulatory review, the Department will be under increasing scrutiny to ensure all announcements deliver against those central Labour missions – under the watchful eye of Cabinet Office. 

If you’re struggling to get traction, it’s not time to throw in the towel. Instead, we need to broaden the net to the rising starts who can make your case where it matters. From the Labour mission champions to the Labour Growth Group, these are the individuals you should be getting facetime with – and bringing on board as advocates.  

The one takeaway?

With mounting costs and the regulatory burden only increasing – now is the time to ensure your organisation’s voice is heard in the policy-making process.

To get in touch with our FMCG policy and corporate reputation team, please contact victoria.murphy@grayling.com.