07/10/2025

Does Packaging EPR Raise Consumer Prices?

Plastics News | Steve Toloken | July 2, 2025

Does packaging EPR raise consumer prices?

It feels like packaging extended producer responsibility (EPR) laws in the United States have hit a speed bump lately, with more politicians questioning whether they'll raise prices for food, beverages and other staples.

California Gov. Gavin Newsom joined the political backlash in a big way in March when he cited cost worries as the reason to rewrite the rules for that state's far-reaching extended EPR program.

Maine and New York resistance followed in June, with Maine's legislature citing consumer price worries in loosening its EPR law. Similar cost concerns figured prominently in the failed attempt to pass an ambitious packaging EPR law in New York's state legislature.

But how much, in fact, does EPR increase prices for consumers?

The theory of EPR is that packaging fees can raise money for better recycling, shift costs away from taxpayers and give companies incentive to use greener packaging.

But since the question of how those fees impact consumer prices has been coming up more in the political backlash, I decided to dive in and see what I could figure out.

In the recent New York legislative debate, you heard figures ranging from a modest $48 a year added to grocery bills, up to a $600 annual hit per household if you factor in the ripple impact in the larger economy and lost economic growth.

That's quite a range, but my short, unscientific, non-economist reading of the limited data suggests to me that EPR doesn't lead to significant price increases for consumers.

Two studies supportive of EPR, one commissioned by the state of Oregon and one from The Recycling Partnership and Columbia University, put the costs on the smaller side.

On the other side, a study from Canada's York University commissioned by a business group in New York state, found the bigger effects.

The Oregon government's study, prepared by the consulting firm RRS, did cost modeling in Canada since some provinces there are already doing EPR for packaging, while in the U.S. only Oregon has launched its program. It started July 1.

The Oregon study compared grocery prices on a C$80 (US$58) basket of common goods in provinces with EPR (British Columbia, Quebec and Manitoba) and those without EPR (like Alberta and Nova Scotia) and found "no consistent pattern of higher prices" in places with EPR.

Other economic factors could be more important, it said.

"Given the lack of clear correlation between higher prices and the existence of EPR policy, it is likely that pricing is more influenced by other economic factors, such as energy or labor costs, local taxes, distance from distribution hubs, competition or other operating expense differences," the Oregon research said.

The Oregon study listed prices for different grocery items, like plastic bottles of bodywash or multilayer potato chip bags, along with their EPR fees.

A PET bottle of mouthwash that sells for C$6.73 in British Columbia had a 5 cent EPR fee while in Quebec it sold for C$5.97 with an EPR fee of 2 cents.

The thin potato chip bag, the bane of recycling systems, sold for C$3.33 with a 1-cent EPR fee in British Columbia.

Compared with the overall cost of groceries, and what else might be driving price increases, that's a small increase.

But a different study, prepared by York University for the Business Council of New York State, estimated much higher total EPR costs and expressed caution about such programs.

A PET bottle of body wash selling for $5.99 would see another 28 cents in EPR costs, while a bag of chips in metalized film packaging selling for $4.99 would see an 18-cent price hike.

The BCNYS/York study argued that the ripple effect of EPR in New York could cost the state $4 billion a year in lost economic activity, or about $600 per year per home.

It argued that EPR fees could raise grocery prices 2-6 percent, but the Oregon study, using costs in the Canadian system, says it's much lower, in the range of 1 percent or less on the final grocery cost.

One key difference is that the studies, whether more EPR skeptical or EPR favorable, make different assumptions about how much of the extra cost is passed on to the public in prices we pay.

The BCNYS estimates that 80 percent of the costs are born by consumers, while the Columbia University/Recycling Partnership research estimates that companies only have pricing power to pass on about 30 percent of the EPR costs, with the rest absorbed in the supply chain.

It's important to keep in mind that packaging is a small part of the price tag for consumer staples — the Columbia study said packaging is about 2.3 percent of the total cost.

That study also said the cost of packaging, as a percent of the cost of the final consumer good, has been going down in recent decades.

Citing research from the U.S. Department of Agriculture, the Columbia researchers said the cost of food and beverage packaging has fallen from about 4.3 percent of the total price in 1993 to 2.3 percent in 2019.

Packaging experts would have a better idea of why that is than me, but it seems like it could be lightweighting of packaging, more efficient design or cheaper methods of mass production.

But one takeaway I had — from the view of what's good for society — was that even if EPR increases the cost of packaging somewhat, let's say from 2.3 percent of overall cost of a grocery item to 3 percent, that's still going to be much less than what we were paying in 1993.

And in return, we've presumably gotten a much better recycling system to handle our packaging waste, with more plentiful and easier recycling, with more recycled content and more opportunities for reusable or compostable packaging.

That's my view, one I shared in a recent episode of our Plastics in Politics webinar, that the cost will be manageable and, in the end, we'll have a greener, more environmentally friendly packaging system.

As we start to roll it out in the U.S., with seven states having now passed laws, we'll find out.