Wasteful or distinctive? The effect of EU and UK packaging waste policies on brand owners

Sustainability goals aimed at reducing packaging throw-up issues for the luxury sector in particular and 2024 could be a landmark year, explain Giles Crown and Elena Glengarry of Taylor Wessing.

Sustainability is at the forefront of policy development for national governments and supranational institutions such as the European Union (EU). A key focus is the circular economy and reducing waste, which is no easy feat. These institutions are pushing to affect widespread reductions in everyday consumption, particularly in relation to food loss and single-use packaging, to help minimise our impact on the climate and environment and meet national and international climate change targets.

In the EU and UK, recent policy and legislative developments are set to shake up this space and have a significant impact on businesses. Some of these may raise issues for brand owners who use distinctive and fanciful product packaging as a key element of a product's identity, which may fall foul of new rules. These have particularly caught the attention of brand owners in the beverage, perfume, cosmetic and FMCG industries.

Could distinctive packaging become outlawed in the EU?

The new EU Packaging & Packaging Waste Regulation (PPWR) has been closely followed by brand owners as it could restrict their ability to use distinctive and fanciful product packaging. Born from the European Green Deal and the circular economy action plan, its overall aim is to ensure that all packaging is reusable or recyclable in an economically feasible way by 2030 across the EU market, and to avoid fragmented rules.

If enacted, the Regulation will impose packaging minimisation requirements on all manufacturers and importers of products placed on the EU market (irrespective of where they are produced). Packaging will have to be designed so that its weight and volume is reduced to the "minimum necessary for ensuring its functionality taking account of the shape and material the packaging is made of".

More specifically, packaging that is not necessary to comply with certain "performance criteria" will be prohibited, as will packaging with characteristics only aimed at increasing the perceived volume of the product such as double-walls and false bottoms of bottles.

The rules apply to all packaging types. This is likely significantly to impact the luxury sector since these goods—like high-end alcoholic drinks and perfumes—are often presented in exotic-shaped bottles and other packaging which are considered a key aspect of their branding and consumer appeal.

Some forms of packaging may be exempt from these requirements if the packaging design is protected by a geographical indication (GI). The EU Council and Parliament recently reached a provisional agreement on the PPWR's text, and the EU Parliament is expected to adopt that compromise text imminently. That text also exempts packaging designs protected by trademarks and/or designs in the EU, provided the protection is in place at the time the Regulation comes into force.

Future packaging designs would not be exempted irrespective of whether they are protected by design rights, trademarks or GIs. This would not only limit the ability of incumbents to update their packaging and innovate but would also penalise new market entrants trying to disrupt a market with eye-catching packaging designs.

If brand owners are to be certain of their ability to use the type of product packaging currently on the market, then arguably a broader exemption is required. Since that is unlikely, brand owners should (now) consider applying to protect key packaging designs as trademarks and/or designs in the EU to maximise their chances of being able to benefit from the exemption. They should also consider how the other considerable obligations in the Regulation might impact their packaging.

While the proposals are not so prescriptive as to impose strict product packaging standardisation, EU standardisation organisations must develop harmonised standards to provide a framework for manufacturers to achieve compliance with the Regulation within 24 months from the date it comes into force.

If the EU Parliament (and subsequently the EU Council) adopts this compromise text (and it is ratified by the new Parliament after the EU elections) then the same will be published in the Official Journal and enter into force 20 days later. This is expected this autumn – and that's the date trademark and designs protections will need to be in place. Keep an eye on this space in the coming weeks.

How is the UK addressing packaging waste?

The UK scheme related to packaging waste is similar to the PPWR in that it has an increased focus from local authorities on ensuring that consumers are not misled by packaging design, i.e. where packaging leads consumers to believe a product is larger than it appears and meet recycling obligations. Recent developments have built on the guidance provided to businesses that are the subject of current rules.

Large organisations that handle more than 25 tonnes of packaging each year are required to collect data about the amount and type of packaging they place on the English market under the extended producer responsibility policy for packaging (EPR) that came into force in February 2023 as part of the Packaging Waste (Data Reporting) (England) Regulations 2023. When that hits 50 tonnes, reporting obligations apply. On 11 March 2024, the Department for Environment, Food and Rural Affairs published guidance on the extended product responsibility for packaging regime in the UK.

This explains the distinctions between household and non-household packaging for reporting and fee purposes, as well as considering how packaging is supplied to a business. More recently, on March 28, 2024 this guidance was updated further to confirm that the list of large producers will be published once that data has been collated which should encourage accountability.

On April 1, 2024, the Packaging Waste (Data Reporting) (England) (Amendment) Regulations 2024 came into force. While the EPR policy covers all of the UK, these Regulations apply to England only. Some of the key amendments include amending the definition of household packaging and clarifying the division of responsibilities between brand owners, packers and fillers, importers and first UK owners and distributors.

What's next?

Reducing our impact on the environment and climate is already a key focus for numerous businesses, but now there may be significant consequences on their future innovation and brand asset development.

For now, it seems that distinctive packaging will not be completely ruled out, but that may depend on how the EU member states and the UK continue to develop and enforce these rules.

If the current measures do not have the desired effect on reducing our impact on the environment, a likely consequence may be to tighten up packaging minimisation rules even further, and mandate heavy sanctions for non-compliance. That may see a more drastic shift in how brand owners are permitted to package their goods, and may lead to more uniformity as a result.

Brand owners across the most affected sectors are already lobbying for clearer rules to ensure the preservation of existing IP rights and seek protection for the future growth of their businesses and portfolio of products. This year could signal a crucial shift, determining the way businesses will be able to operate in the coming years to ensure regulatory compliance but also continue to stand out from their competitors' products.

Giles Crown is a partner at Taylor Wessing. He can be contacted at: G.Crown@taylorwessing.com

Elena Glengarry is an associate at Taylor Wessing. She can be contacted at: E.Glengarry@taylorwessing.com