Consumer Packaged Goods in 2026: Regulatory Shifts and Policy Divergence
WHAT YOU NEED TO KNOW
- Private consumption is still below the pre-COVID-19 pandemic trends across Asia. Persistent weaknesses in the service sector, particularly trade, transport and accommodation, have stalled job and income growth. Tourism in several markets has had slower recoveries and remains below the 2015-2019 trend. High household debt and a downturn in the housing cycle have also dampened consumer demand and construction activities in some countries, including Thailand, New Zealand, China and Cambodia. In countries such as Australia and New Zealand, tight credit conditions have contributed to demand weakness.
- Many Asian markets, particularly in Southeast Asia, recorded higher-than-expected growth for the first half of 2025. This was due to a rise in exports as many companies pushed supply chains to “get ahead” of incoming U.S. tariffs. This export-led growth offset a decline in investment and weaker consumer and business confidence. Japan is a distinct bright spot with higher-than-expected growth, which is nevertheless low at around 1 percent.
ON THE HORIZON
- The EU Deforestation Regulation (EUDR) will come into effect December 30 after a 12-month delay. However, discussions are continuing into November, with a proposed six-month grace period to understand the rules and additional 12-month delay for small companies. EUDR aims to ensure products imported into the EU have not come from areas of deforestation or forest degradation. The primary products covered are cattle, cocoa, coffee, palm oil, rubber, soya and wood, as well as a range of derivative products. The EU is a key market for Asian countries to diversify trade relations following U.S. tariff disruptions.
- The International Monetary Fund predicts that reduced growth and disinflation in China, India and several Southeast Asian markets will continue for the remainder of 2025, but some inflation is expected to return in 2026.
- The United States now has many trade agreements in place so global supply chains will be able to reset with some degree of certainty. Trading patterns will soon reflect new market access for U.S. firms and further decoupling from China.
Sector Overview and Forecast
Macrotrend Monitor
Unwrapping Extended Producer Responsibility Regulations
Countries are moving ahead with regulations around extended producer responsibility (EPR), plastics and packaging even as global talks stall. The United Nations’ fifth session on a Global Plastics Treaty adjourned in August without a deal after talks in December 2024 stalled. Countries could not bridge gaps on production caps, chemicals or financing, prompting both civil society and business coalitions to acknowledge that a binding global framework remains out of reach for now. Practically, this means a patchwork of national EPR systems, recycled-content mandates, design rules, deposit schemes and import controls — diverging in targets and timelines across markets.
European Union rules are becoming the de facto global template as companies seek to harmonize to “EU-ready” packaging to keep access to that market. The Packaging and Packaging Waste Regulation, Waste from Electrical and Electronic Equipment and Batteries Regulation together provide the framework and base regulations, which are being updated to comprehensively cover EPR. Governments across Asia are planning to follow EU concepts to ensure alignment and facilitate market access.
Across the Indo-Pacific, EPR has shifted from concept to compliance and ongoing updates. The Philippines’ EPR Act of 2022 set plastic recovery targets for large firms. In 2023, companies were required to recover 20 percent of the plastic generated. This increased to 50 percent in 2025 and will become 80 percent by the end of 2028. Vietnam tweaked its 2020 Environmental Protection Law, which outlined mandatory recycling rates and specifications, in January with Decree 05/2025/ND-CP to clarify which companies are subject to EPR duties and what materials are excluded.
Other countries are shifting from pilot and voluntary schemes to compulsory EPR. In Thailand, the Draft Sustainable Packaging Management Act (still under development) would implement a mandatory EPR framework targeting introduction at some point in 2027. Indonesia is looking to develop an EPR system that would call on producers to design recyclable packaging, establish take-back systems, invest in infrastructure and report progress. Environment Minister Hanif Faisol Nurofiq confirmed in August that the government is formulating regulations targeting a phased implementation through to 2029. The Malaysia Plastics and Sustainability Roadmap 2021-2030 is also expected to become mandatory in 2026 after being voluntary from 2023 until 2025.
The goal is clear, but logistics are still challenging for companies. Rising producer fees, shifting targets and fragmented rules complicate cross-border stock-keeping units which help companies track inventory and manage stock efficiently. EPR infrastructure often lags policy and industrial capacities. Some countries may see more “paper compliance,” while others may see costs passed on to consumers. Tightening waste-import controls, as seen in Thailand earlier this year; green-claims scrutiny; and the operational burden of data and supply chain transformations will likely become more prevalent.
Asia’s packaging policy is being set nationally but with some influence from the EU. The direction of travel is consistent with producer responsibility, design-for-recycling and higher recovery rates. Companies will still need country-specific playbooks and prepare to engage with compliance tracking — a proactive approach will help secure commercial and reputational advantages with environmental goals.
Subsector Highlight
Alcohol Policy Divergence Across the Indo-Pacific
Policies around alcohol have softened in some markets but hardened in others. As consumption rates and efforts to control alcohol vary across the region, recent policies show a divergence in control measures.
Thailand dropped import duties on wine in February 2024, resulting in increased concerns about surging consumption and lost government revenue. This year, Thailand is liberalizing some parts while restricting other parts. In June, the prime minister expanded exemptions for types of venues that can sell alcohol outside the national sale-hours rule — partly in a bid to support tourism-heavy areas. Separately, the Alcoholic Beverage Control Act (No. 2) took effect in November. It overhauls advertising rules and introduces age-verification requirements at points of sale.
More recently, the World Health Organization has softened its policy suggestions to address alcohol intake in relation to its effect on noncommunicable diseases. A draft declaration in May proposed tax increases, supply restrictions and mandatory cancer warning labels. The final “Political declaration of the fourth high-level meeting of the General Assembly on the prevention and control of noncommunicable diseases and the promotion of mental health and well-being” agreed in September removed those suggestions and focused on the “harmful use of alcohol.” At the other end of the spectrum, Vietnam raised taxes on alcohol in June.
Elsewhere, governments are tightening controls. The Philippines continued its 6 percent annual excise increase again on January 1, while Malaysia announced a 10 percent excise hike for its 2026 budget. Vietnam tabled a major special consumption tax overhaul, with proposals to raise the alcohol tax around 70-80 percent by 2026 and up to 90-100 percent by 2030 — framing it as a health-oriented reform.
Meanwhile, Japan will reach the final stage of harmonizing beer taxes in 2026. The tax for all main beer-like beverages, including regular beer, happoshu (a low-malt type of beer) and third beer (no-malt type beers) will be subject to a single rate of JPY 54.25 ($0.35) per 350 milliliters. Policy implementation began in 2020.
Alcohol policies in the Indo-Pacific are diverging rather than converging: Thailand’s liberalization and softer U.N. language on noncommunicable diseases sit alongside steady excise increases in Vietnam, the Philippines and Malaysia as well as Japan’s long-planned tax harmonization. For companies, this means assessing products, production and pricing strategies country-by-country — with considerations for the potential economic stimulus versus health-framed fiscal tightening elsewhere. The near-term outlook is mixed but not facing upheaval. Incremental liberalization may occur, but fiscal pressure will continue where health and revenue priorities prevail.
We will continue to keep you updated on developments in the consumer packaged goods (CPG) sector as they occur. If you have comments or questions, please contact BGA Director Alex Jones at ajones@bowergroupasia.com.
Best regards,
BGA CPG Team
