Will Malta's New Packaging Tax Push Food Prices Higher?

Could Food Prices in Malta Rise Due to a New 'Packaging Tax'?

The rising cost of living and food prices have been a hot topic globally, and Malta is no exception. Now, a new tax targeting packaging waste—known as the Extended Producer Responsibility (EPR) scheme—could add further financial strain to households, restaurants, and food retailers. While the tax aims to promote sustainability, industry leaders warn that it may come at a high cost to consumers.

Under this new policy, companies producing packaging that ends up in household waste will be required to pay fees based on the material type and volume. Retailers and food producers must submit detailed data on their packaging usage, with the tax aimed at encouraging businesses to reduce, reuse, and improve packaging. However, with over 80% of these costs expected to be passed on to consumers, the food and restaurant industry in Malta may need to brace itself for increased prices.

The Potential Impact on Maltese Households and Dining

For Maltese households, where food costs already make up a significant portion of monthly expenses, this tax could add pressure to household budgets. According to the Bank of England, the EPR policy could contribute to a 0.5% increase in food inflation. While this figure may seem small, it adds up—particularly when combined with existing inflationary pressures. The rise in food prices could also impact restaurant owners and operators, who may need to adjust their menus or pricing structures to accommodate the higher costs of goods.

For consumers committed to a healthy lifestyle, this could present a dilemma. Many health-conscious shoppers in Malta prioritize fresh, organic, and minimally processed foods, which often come with higher price tags due to sustainable packaging and production methods. The EPR tax may further amplify these costs, potentially making healthy choices less accessible for some.

Restaurants and the Sustainability Challenge

For Malta’s vibrant restaurant scene—known for its mix of traditional Mediterranean cuisine and innovative global dining—the tax may present both challenges and opportunities. Many restaurant owners in Malta already face increasing operational costs, from rising energy prices to higher wages. Adding packaging taxes to the mix could result in menu price hikes, potentially affecting the affordability of dining out.

However, the tax could also drive innovation. A survey of retailers revealed that 85% plan to increase the use of sustainable packaging, while 78% aim to reduce overall packaging volume. In Malta, where eco-conscious dining is growing in popularity, restaurants that adopt greener practices may appeal to a new wave of environmentally aware consumers. For instance, eateries that use compostable containers for takeaways or introduce packaging-free dining options could set themselves apart in a competitive market.

Supporting Healthy Habits and Sustainability

From a health and sustainability perspective, the goal of the EPR tax aligns with broader efforts to reduce waste and protect the environment. Malta’s commitment to recycling and waste management has grown in recent years, with initiatives such as the Beverage Container Refund Scheme encouraging more sustainable practices. By reducing unnecessary packaging and phasing out hard-to-recycle materials, the EPR policy could complement these efforts and help create a cleaner, healthier environment for all.

That said, the British Retail Consortium (BRC) has called on governments to ensure that the funds raised through the tax are used transparently and effectively. They argue that the revenue should be ring-fenced for improving local recycling systems, rather than becoming a general tax burden. Similarly, local councils in the UK have emphasized the importance of using the funds to develop recycling programs that benefit residents directly.

For Malta, these considerations are equally relevant. Improved waste management systems could enhance the island’s sustainability credentials, making it an even more attractive destination for eco-conscious travelers and foodies. However, transparency and accountability will be key to ensuring that the tax delivers tangible environmental benefits without overburdening businesses or consumers.

What This Means for Maltese Consumers

For the average Maltese consumer, the packaging tax raises important questions about the balance between environmental responsibility and affordability. How much of the cost will be absorbed by food producers and retailers? And how can consumers continue to prioritize healthy, sustainable choices without breaking the bank?

One practical step for households and restaurants alike is to focus on reducing food waste. Planning meals, buying in bulk, and supporting local farmers can help mitigate rising costs while promoting a healthier, more sustainable lifestyle. Restaurants in Malta might also consider collaborating with local suppliers to minimize packaging and transportation costs, which can benefit both the environment and their bottom line.

A Call for Collaboration

Ultimately, the success of the EPR tax will depend on collaboration across the food supply chain—from producers and retailers to consumers and policymakers. While the policy is designed to hold businesses accountable for their environmental impact, its ripple effects will touch every corner of the food and dining sector. By working together to embrace innovation and prioritize sustainability, Malta can turn this challenge into an opportunity to enhance its reputation as a leader in healthy, sustainable living.

For now, the key for consumers and businesses alike will be to stay informed, adapt to changing circumstances, and continue supporting initiatives that promote both environmental and personal well-being. Whether you’re shopping for fresh produce at a local market or enjoying a meal at one of Malta’s many outstanding restaurants, every small change can contribute to a healthier, more sustainable future.