Matthew Ball
With further compliance obligations and sustainability requirements coming into force in the packaging sector in 2026 and 2027, a report by Gerald Edelman, a mid-tier accountancy and advisory firm, urges owner-managed businesses to push ahead with planned sales before increasing regulatory and compliance costs begin to impact valuations.
In the past 12 months, the UK packaging industry, which generates approximately £11 billion in annual manufacturing turnover and employs 85,000 people, has absorbed Extended Producer Responsibility (EPR) reporting and fees, totalling £1.5 billion, alongside a rising Plastic Packaging Tax. Looking ahead, eco-modulated EPR fees from 2026, and the Deposit Return Scheme, launching nationwide from October 2027, among other regulatory developments, will create further pressure on packaging businesses to evidence compliance, which can be costly to implement.
The report by Gerald Edelman, a certified B Corporation, recommends that for owner-managed businesses, which make up the majority of more than 4,000 active firms in the fragmented UK packaging sector, the window ahead of these new regulatory deadlines is an ideal time to sell.
Matthew Ball, Director in Gerald Edelman’s Corporate Finance Team and packaging sector expert, explains: “We expect the continued implementation of the UK’s EPR regime to accelerate mid-market exits as compliance costs and reporting obligations become more significant. For business owners who have been considering a sale, now may be an opportune time to test the waters before additional compliance costs begin to impact profitability and valuations.
“Buyers will of course remain focused on assets with strong EPR compliance capabilities, robust sustainability credentials, and long-term customer relationships.”
The report outlines a sustained M&A market for UK packaging, with 56 transactions in 2024, and suggests that private equity (PE) is likely to remain the most active acquirer class.
Ball, who advised on several packaging deals in 2025, adds: “High levels of repeat customer demand, fragmented ownership, and proven buy-and-build dynamics make the UK packaging sector attractive to PE investment and should support continued deal activity through 2026 and into 2027.
“However, strategic acquirers are also likely to remain active, particularly in fibre-based foodservice, pharmaceutical packaging, and e-commerce fulfilment packaging. In my experience, UK mid-market packaging assets typically trade at between five and nine times EBITDA, with sustainable and value-added packaging manufacturers able to attract the highest multiples.”
Ball concludes: “Overall, resilient customer demand, regulatory requirements, and continued appetite for consolidation should support M&A activity for well-positioned packaging assets.”