Middle East tensions trigger record rise in food packaging costs
Global unrest and severe supply chain issues have triggered an unprecedented surge in food packaging costs across Europe, sparking fears of a renewed spike in supermarket grocery inflation. Figures from the Flexible Packaging Europe (FPE) Raw Material Price Index show that the second quarter of 2026 brought rapid price rises across every major packaging material. The crisis, largely driven by shipping disruptions around the Strait of Hormuz, has heavily hit an industry reliant on plastics, foils and paper to keep everyday food products fresh. The supply chain shock This sudden market shift resulted from a clash of low European material stocks and disrupted Middle Eastern production. As global threats emerged, buyers abandoned cost negotiations in a panic to secure vital supplies. This rush buying caused raw manufacturing materials to skyrocket within weeks: BOPP plastic film surged by 97% owing to severe European resin shortages. PET plastic film rose by 40%, driven by rising global oil prices. HDPE and LDPE packaging jumped 38% and 31% respectively, as buyers prioritised supply over cost. Even materials less reliant on oil, such as aluminium foil, felt the squeeze due to soaring warehouse storage premiums and sustained high energy costs, with prices increasing by 12%. Impact on supermarket aisles While European suppliers have managed to maintain delivery volumes without major factory closures, the severe financial impact is now rippling down the supply chain. Food and drink manufacturers cannot absorb these double-digit increases indefinitely. Consequently, industry bodies like the Food and Drink Federation (FDF) have revised their late-2026 UK food inflation forecasts to 9% or higher. The primary concern for brands is “shelf shock”, the risk that impending retail price hikes will severely hurt consumer spending. For food producers aiming to navigate this market volatility, securing reliable, cost-effective packaging has become more critical than ever to protect their tightening profit margins. Is the peak behind us? There are early signs that the worst of these sudden price spikes may have plateaued. Late June data indicates that as buyers shift their focus back to affordability, more competitive offers from international markets are helping spot prices ease. If supply chain bottlenecks continue to clear alongside the gradual reopening of the Strait of Hormuz, packaging prices should normalise towards the end of 2026. However, because baseline costs remain well above pre-crisis levels, the food industry must prepare for elevated overheads to persist well into the autumn.
UK Packaging PRO appointed to lead landmark recycling reforms
A new industry-led body has been appointed to oversee a major overhaul of UK packaging waste rules. UK Packaging PRO will act as the Producer Responsibility Organisation (PRO) for the government’s new Extended Producer Responsibility (pEPR) scheme – regarded as one of the most significant environmental programmes in a generation. The pEPR scheme is designed to help drive the shift to more recyclable materials whilst reducing landfill waste, and will shift the financial burden of managing this away from taxpayers and towards the businesses that produce the packaging. Following a competitive selection process, PackUK announced the appointment of the new body, which represents more than 100 of Britain’s largest brands, retailers, and trade bodies, and is supported by major industry players including the Food and Drink Federation (FDF). How will it work? Under the pEPR scheme, firms will be charged fees based on the amount and type of packaging they place on the market. These funds – estimated at £1.4 billion in the first year alone – will be used to pay local authorities for the collection and management of packaging waste. By making it more expensive to use difficult-to-recycle materials, the government aims to incentivise businesses to choose sustainable alternatives and reduce their overall material footprint. “This government will accelerate the circular economy transition,” said Circular Economy Minister Mary Creagh. “The launch of UK Packaging PRO is a major step forward, putting industry expertise at the centre of how pEPR is delivered.” A seat at the table While PackUK will retain final authority over producer fees and payments to councils, UK Packaging PRO will provide the technical expertise and industry insight needed to run the day-to-day operations. “We’re very proud to have been appointed to play such a vital role in the Packaging EPR scheme,” said Karen Graley, Head of UK Packaging PRO. “UK Packaging PRO was created to give producers a genuine seat at the table. With strong governance in place, a clear mobilisation plan, and broad support from across the sector, we are ready to get to work – in close partnership with PackUK, governments, local authorities and organisations across the value chain to deliver a packaging system that works better for everyone.” The formal appointment began on 1 April 2026, with responsibilities being introduced gradually to ensure a smooth transition for businesses and local authorities alike.
Quality still king but packaging power grows, new data shows
British shoppers are increasingly looking at what’s on the outside as much as what’s on the inside, as new research reveals the growing influence of packaging on the nation’s spending habits. A study by YouGov has found that while product quality (70%) and brand reputation (60%) remain the primary drivers for UK consumers, packaging is emerging as a critical ‘tie-breaker’ in an increasingly competitive market. The ‘Sustainable’ Generation The shift is most pronounced among younger shoppers. For those aged 18-24, packaging design and materials are nearly twice as important as they are for the over-65s. Nearly 30% of Gen Z consumers now cite packaging as a key factor when choosing between comparable products, signalling a long-term shift in retail priorities. Sustainability is the clear frontrunner in this trend. One-third of all Britons (34%) say that whether a pack is recyclable or biodegradable is the single most important factor influencing their purchase. Over-packaging backlash The report also highlights a growing frustration with ‘excessive’ wrapping. Luxury items, toys, and online deliveries were singled out as the worst offenders for over-packaging. While 51% of adults say they haven’t yet boycotted a brand over its packaging, the tide may be turning. Nearly 40% of younger consumers admit they have avoided products specifically because they appeared over-packaged. What it means for brands For the packaging industry, the message is clear: the ‘unboxing’ experience is no longer just about aesthetics; it is a statement of ethics. While quality is still king, sustainability is no longer a ‘nice-to-have’, the report suggests. Brands that can balance premium product quality with minimal, planet-friendly packaging are likely to win the battle for the hearts – and wallets – of the next generation of shoppers.
Global secondary packaging market set to hit £224 billion by 2030
Research from Smithers forecasts that the global market for secondary and protective packaging will hit £224 billion by 2030. The secondary packaging market is undergoing a significant transformation, driven by the ascendancy of e-commerce. A recent report from Smithers – a multinational testing, consulting and information services provider – indicates that e-commerce has surpassed consumer durables, non-durables, and industrial allocations to become the world’s fastest-growing segment in this market. While a steady increase in overall secondary packaging volumes is anticipated throughout the remainder of the decade, the composition of materials, formats, and consumption locations is fundamentally shifting. Packaging demand is now being heavily influenced by warehouses, fulfilment centres, and parcel networks, eclipsing the impact of traditional retail channels. Furthermore, the global packaging industry is increasingly prioritising environmental sustainability. Josh Brooks, divisional director of packaging at Easyfairs, said: “The global packaging industry is placing increasing emphasis on improving the environmental sustainability of its products as consumer expectations and regulatory requirements continue to intensify. “Companies are working to reduce material use, adopt recyclable or renewable resources, and lessen overall environmental impact.” The European market is poised for a significant increase in e-commerce secondary packaging volumes, which Smithers projects will rise by 45% by 2030. This growth sharply contrasts with the more modest 10.5% growth anticipated for the overall secondary packaging market. Specifically, e-commerce packaging is expected to grow from 4.7 million tonnes in 2023 to 6.8 million tonnes by 2030. Over the same period, total secondary packaging volumes are forecast to increase from 30.6 million tonnes to 33.8 million tonnes. Brooks added: “In Europe, EU member states are preparing to implement the PPWR over the next five years, aiming to meet the 2030 target for fully recyclable packaging. “This regulatory push underscores the growing urgency for innovation that aligns environmental responsibility with reliable packaging performance.” Paper-based protective packaging is projected to be one of the fastest-growing material types for packaging. The report forecasts a Compound Annual Growth Rate (CAGR) of 3.9% for paper fill through to 2030, driven by the adoption of automated paper dispensing systems in large e-commerce fulfillment centers. In the UK, the shift to paper is influenced by environmental, operational, and regulatory factors. Many longstanding packaging manufacturers, such as Polybags.co.uk have diversified their product range in recent years to include an ever-expanding selection of paper and cardboard packaging. Key drivers include the Plastic Packaging Tax, reduced Extended Producer Responsibility (EPR) obligations, and the material’s strong acceptance in kerbside recycling schemes, as highlighted by Smithers. Smithers also noted an emerging opportunity in returnable and reusable secondary packaging, particularly within closed-loop or business-to-business supply chains. However, this shift faces near-term obstacles, such as higher initial costs, low return rates, demanding durability requirements, and the logistical complexity of reverse logistics, cleaning, and redistribution.
UK grocery retailers’ packaging pledges fall short of in-store reality
Significant discrepancies exist between the public sustainability pledges of UK grocery retailers and the actual packaging used in their stores, according to new research from packaging consultancy Aura. This finding underscores the urgent need for action as regulatory pressures, specifically the intensifying EPR and RAM regulations, increase for the sector. Aura, a premier global packaging consultancy, has conducted proprietary research that reveals surprising insights into the packaging sustainability performance of major UK grocery retailers. This research, which compared in-store findings against retailers’ public sustainability pledges, confirms that packaging sustainability is a key strategic priority, not just a talking point. The research arrives amid a demanding packaging landscape, shaped by evolving consumer expectations, escalating environmental pressures, and new regulations like Extended Producer Responsibility (EPR) and the Recyclability Assessment Methodology (RAM). The findings highlight significant gaps, alarming inconsistencies, and exemplary best practices, clearly identifying where the sector excels and where it falls short. To influence and inform the sector, these findings are detailed in the new e-book, UK Grocery Retail Packaging: The time to act is now. The e-book provides a clear comparative view of how UK grocery retailers measure up against each other and their own commitments, while underscoring the urgent need for action. By leveraging these insights, you can: Integrate packaging sustainability from the initial design phase Align packaging with legislation to lower total cost of goods and mitigate fees Enhance packaging design using practical examples and retail case studies Achieve packaging goals while successfully balancing environmental, consumer, and commercial needs