It doesn't really matter who pays for what in the upstream. What matters is the final price to the consumer. So if milk producer A switches to glass bottles and

It doesn't really matter who pays for what in the upstream. What matters is the final price to the consumer. So if milk producer A switches to glass bottles and can sell milk at a lower final price to the consumer, they will be at a competitive advantage to milk producer B who uses plastic bottles and then has a higher final price to the consumer. That's assuming that the extra costs of glass bottles are still lower than the tax on the plastic ones.