The Return of Deposit Return Schemes

The UK’s Deposit Return Scheme: What Drinks Brands Need to Know

After years of debate, the UK’s Deposit Return Scheme (commonly referred to as DRS) has passed through Parliament, with implementation scheduled for October 2027. Designed to tackle the growing problem of single-use drinks packaging and boost recycling rates, the scheme promises significant environmental benefits. But for drinks producers—especially small to medium-sized businesses—it brings a host of questions and concerns, especially after the botched attempt in Scotland.

What will be included? How much will it cost? And, crucially, how can brands prepare for the changes while keeping costs under control? We thought it would be helpful to break down the details, highlight the challenges, and explore the opportunities the DRS presents for drinks brands.

What Exactly Is the Deposit Return Scheme?

The DRS is a recycling initiative designed to incentivise people to return their used drinks containers. When someone buys a drink, they’ll pay a small deposit (likely around 20p) on top of the product price. This deposit is refunded when the container is returned to a designated collection point, such as a supermarket reverse vending machine or a local shop. If you’ve ever been to a supermarket in the Netherlands, Germany, or Denmark you’ll likely have seen these machines.

The scheme aims to reduce litter, increase recycling rates, and shift the UK toward a more circular economy where materials are reused rather than discarded.

What’s Included in the DRS?

The scope of the scheme varies across the UK’s nations:

• England, Scotland & Northern Ireland:

• Covers PET plastic bottles, aluminium cans, and steel cans.

• Glass is excluded to simplify rollout and reduce costs.

• Wales:

• Includes everything listed above plus glass bottles.

• Scotland’s initial plan for DRS faced significant setbacks but aims to align with the UK rollout in 2027. Wales has embraced a more ambitious approach, reflecting its leadership in recycling initiatives, and is running its own DRS separate from the unified UK one.

What Isn’t Included?

Containers smaller than 150ml or larger than 3 litres are excluded across the UK. This means miniature bottles (like those popular for spirits) and bulk containers won’t fall under the scheme. Multi-material packaging, such as Tetra Paks and Frugalpac’s paper-based Frugal Bottle, isn’t included in England and Northern Ireland, though this could evolve as the scheme develops.

What If You’re Using Glass bottles?

For spirits and wine brands using glass bottles, the situation is a bit more nuanced.

• In England, Scotland & Northern Ireland: Glass bottles will not be part of the DRS at first. If your brand only uses glass packaging, it’s likely that you will be exempt from the scheme in these regions until further notice.

• In Wales: Glass bottles will be included in the DRS from the outset, meaning your brand will need to take part in the scheme if you sell in these markets.

How Should You Prepare?

1. Check Packaging Requirements: Because glass bottles will be included in Wales (and eventually England, Scotland, & NI), your packaging must meet certain standards, such as including the DRS-specific barcode or label for identification.

2. Plan for Costs and Logistics: As your glass bottles will need to be collected and recycled through the DRS, factor in the cost of participating in these schemes—firstly in Scotland and Wales, where glass is included. This will likely involve joining an approved compliance scheme and managing the logistics of container returns.

3. Stay Informed About Future Changes: While glass is excluded in England and Northern Ireland for now, future plans may bring glass under the scheme in these regions. Keep an eye on any updates and be prepared for changes as the scheme evolves. We’ll be keeping track of everything, so you can also get in touch if you’ve got any questions.

What About Brands Using Aluminium or Plastic?

For brands using aluminium cans or plastic bottles, the DRS rules are simpler, but there are still a few key points to keep in mind.

• In England, Scotland & Northern Ireland:

Aluminium or plastic cans and bottles will be covered under the DRS from the outset. This means that brands using these materials will need to comply with the scheme when it’s rolled out in October 2027.

• In Wales:

Like the rest of the UK, aluminium cans and plastic bottles will be included in the DRS, meaning brands that use these materials will need to comply in these regions as well.

How Should You Prepare If You Use Aluminium or Plastic Bottles and Cans?

1. Packaging Adjustments: Your aluminium cans or plastic bottles will need to meet the DRS requirements, such as including the DRS barcode. Be prepared to make packaging adjustments to meet these specifications.

2. Deposit and Refund Management: If your brand uses plastic or aluminium, you’ll need to account for the upfront deposit fees that will be placed on each container. These will be refunded when the containers are returned, but brands will need to plan for the upfront cost, especially if your products are sold in large volumes.

3. Logistics and Compliance: Both aluminium and plastic brands will need to either join a compliance scheme or manage the logistics of collecting returned containers. In most cases, it will be easier for large brands to engage with an existing compliance scheme, while smaller brands may need to consider their options and plan for potential fees.

Costs and Opportunities

For many small to medium-sized drinks brands, the financial and logistical aspects of the DRS are the biggest concerns. While the costs haven’t yet been published by the government, here’s a short breakdown of what we can expect:

1. Upfront Deposit Fees:

A deposit will be charged to brands for every container they produce and sell. While these deposits will be refunded when containers are returned, businesses must account for the cash flow impact of paying for these deposits upfront, especially for seasonal or high-volume products.

2. Per-Container Fees:

Each beverage container will likely incur a fee to cover the operational costs of the DRS. This could range from 2p to 4p per container, depending on the type of material used. These fees may vary depending on whether your containers are made from glass, plastic, or aluminium.

3. Compliance and Logistics Costs:

Businesses will also need to factor in costs for meeting the DRS’s requirements, such as updating labelling, managing returns, and joining compliance schemes.

4. Sustainability and Brand Value:

On the flip side, the DRS offers a valuable opportunity for brands to enhance their environmental credentials. By actively promoting your commitment to the schemes, you can boost your reputation with environmentally conscious citizens.

5. Government Support:

The UK government has indicated it will provide support and guidance to businesses navigating the DRS. This includes helping smaller companies manage the costs and complexities associated with the scheme.

What’s the Environmental Upside?

Despite the logistical challenges, the DRS offers undeniable environmental benefits, which can be a powerful selling point for drinks brands committed to sustainability.

1. Reducing Litter:

Countries with established DRS schemes, such as Germany and Norway, report dramatic reductions in container litter. This means cleaner streets, parks, and waterways—a visible improvement that everyone will appreciate.

2. Boosting Recycling Rates:

Germany’s DRS boasts a container return rate of 98%, far outpacing the UK’s current performance. By capturing more materials for recycling and reuse, the scheme will reduce reliance on virgin resources and lower carbon emissions and water use.

3. Promoting a Circular Economy:

The DRS encourages citizens to see packaging as a resource, not waste, just like the good old days when the milkman used to deliver and collect bottles. By participating, companies contribute to a system where materials are reused and repurposed, aligning with the growing demand for sustainable practices.

4. Enhancing Brand Reputation:

Consumers are increasingly looking for brands that prioritise sustainability. Supporting the DRS—and communicating that commitment—can help brands stand out in a crowded market.

A Greener Future for Drinks Brands

While the UK’s Deposit Return Scheme poses challenges, particularly for smaller drinks producers, it’s also an opportunity to demonstrate leadership in sustainability. By embracing the DRS and preparing early, brands can not only meet the scheme’s requirements but also position themselves as pioneers in reducing waste and protecting the planet.

The road to 2027 may have a few bumps, but the destination—a cleaner, greener UK—is well worth the journey.

References

1. “England Moves Forward with Deposit Return Scheme, Set for October 2027 Rollout.” The Drinks Business.

2. “Deposit Return Scheme Passes Parliament.” Resource.co.

3. “Scotland’s Deposit Return Scheme: A Guide.” Zero Waste Scotland.

4. “The Case for a Deposit Return Scheme.” British Soft Drinks Association.

5. “Germany’s DRS Success Story.” Ellen MacArthur Foundation.