While the regulation’s recycling and waste labeling rules do not actually apply until 2028 to 2030, companies are currently required to register and pay compliance fees in all EU countries to which they currently ship, regardless of the size of their operations, with costs ranging from €300 to €1,100 per market per year.
There has been a howl of protest from small businesses in Ireland saying the regulations will make it almost impossible for them to continue selling in other EU countries. Of the 500 complaints registered so far by small businesses across Europe, 40 come from Ireland.
BabaBarock Ltd is typical of a wide range of small businesses that have complained to the European Commission since the Regulation came into force.
Founded in 2002 by husbands Karen Mahony and Alex Ukolov in Killarney, employing four people, they have worked hard for many years to gain clients across Europe and say these regulations make it impossible for them to sell in most EU countries because the administrative and financial cost is simply too high.
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Ciara Costelloe, who runs the micro-business Decking Awesome Games, is another typical entrepreneur who has lodged a complaint with the Commission.
She says: “I run a micro-business in Ireland selling a few handmade products a year. I use a lot of recycled packaging from the packages I receive. Amazon asks me to provide all sorts of information which I can’t comply with. I emailed Repak and haven’t heard back.
“My Amazon listing is about to be removed and really my hopes of testing the market to find a product that is popular seem impossible with these regulations.
Experts and small businesses agree that the main obstacle to these new rules is the fixed costs, which are the same for small businesses as for large corporations. The difficulty is that PPWR creates fulfillment costs charged by country sold or imported, not by package or revenue per unit of sales, and small businesses like BabaBarock and Decking Awesome Games have to pay the same fees as large corporations like Amazon.
EU officials caution that regulations do not initially require companies to redesign packaging or change materials overnight; The initial rules focus on who is responsible for packaging entering the EU market and proving it with paperwork.
However, for small businesses this means a huge amount of administration and paperwork. In practice, it involves issuing a declaration for each type of packaging they use and registering individually in each EU state’s Extended Producer Responsibility scheme, as there is no registration at EU level. Most states also require sellers to appoint an “authorized representative” in the state to handle registration on their behalf.
Adding to small business concerns is the action of marketplace platforms such as Amazon, which are now actively checking that all sellers on their platforms comply with EU regulations and have the power to remove any online listing that does not comply.
And, as one small business owner stated:
With the cost of complying often exceeding profit margins on low-volume sales, the burden of PPWR is falling hardest on companies least equipped to absorb it: small exporters are being forced to make difficult decisions, from reducing trade with the EU to leaving the market for the foreseeable future.
Most British manufacturers trading with the EU and Ireland will also have to comply with the PPWR. UK small businesses may decide that it is too complicated to continue trading with the EU, further impacting small Irish businesses that rely on UK imports.
The latest information from Brussels is that the commission is discussing exempting EU-based micro-businesses from some of the regulation’s requirements, such as having an authorized representative in each country. But much more will be needed to ease the burden on small businesses and encourage them to continue trading across the 27 member states.