Retailers are calling on the Government to review its plans to
introduce a deposit return scheme (DRS – a bottle recycling
scheme) for drink containers as new research from the British
Retail Consortium shows that the scheme is likely to cost the
industry at least £1.8bn a year from 2025, with startup costs,
such as buying machines, hitting businesses much earlier.
Worse yet, this figure does not include the hundreds of millions
of pounds required from industry to set up a body to run the
scheme. The current £1.8bn per year estimate includes; capital
costs, including buying and installing Return Vending Machines
(RVM); labour costs, including staff training and time for
processing returns; and other operating costs, including service
and maintenance for RVMs, IT costs and cleaning of containers
used for collection.
Annual cost of DRS in each of the four UK
nations
Time is needed to rethink current plans to prevent the
introduction of an unnecessarily complex and costly scheme. In
Scotland, the rushed implementation of a similar DRS scheme
collapsed after governments failed to deliver a meaningful plan
or realistic timelines for its introduction. This has left
industry footing the bill for tens of millions in sunk costs.
Without significant revision, the UK scheme risks running into
many of the same problems as in Scotland.
Government’s ambitious target of eliminating all avoidable waste
by 2050, and all avoidable plastic waste by 2042, is supported by
three pillars within its Resource and Waste Strategy: its
packaging levy - Extended Producer Responsibility (EPR), the
consistent collections of household and business recycling in
England , and DRS. Retailers believe that the sequencing of these
three reforms is essential. Reforms to household recycling
collection and EPR must first be introduced together, and only
then will it be clear on the exact role of a DRS in further
improving recycling rates.
Government’s recent decision to delay the implementation of EPR
has provided an important opportunity to redesign aspects of this
policy, which will see industry pay 100% of the costs of
collecting and recycling the packaging they produce. It will also
soften the inflationary aspect of this policy, which will add an
estimated £2bn per year on its own.
Margins remain slim and have significantly tightened in the last
year, as confirmed by the recent Competition and Markets
Authority report. While retailers may be able to absorb some of
the costs of implementing these new policies, it is inevitable
that introducing EPR and DRS together would place upward pressure
on consumer prices.
Andrew Opie, Director of Food & Sustainability at the
British Retail Consortium, said:
“The proposed Deposit Return Scheme is costly, complicated and
cannot deliver the step change in recycling needed to justify it.
By driving up costs by almost £2 billion per year the government
risks pushing up prices for ordinary households, just as
inflation is coming down. Government must first introduce its
household collection and packaging levy reforms so that it can
assess the best way forward on a DRS. On its current course, it
will be consumers who will pay the price of this unnecessarily
hasty, expensive and complex scheme.”
