Confirmation that a flat 20p deposit will be applied for all in-scope containers in the Deposit Return Scheme (DRS) has been welcomed by convenience retail trade bodies, although the Association of Convenience Stores (ACS) flagged that retailers still needed further details on the rate of the retail handling fee.
When the DRS launches in Scotland, England and Northern Ireland on October 2027, the 20p deposit will be applied to all single-use drinks in PET plastic, steel and aluminium containers between 150ml and 3 litres at the point of purchase. The deposit will be fully refundable to consumers when the containers are returned.
The announcement follows a period of extensive consultation with industry and analysis of existing DRS across Europe and the rest of the world. This work looked at different deposit values and variable approaches to consider the most effective way to ensure the deposit provides a sufficient behavioural incentive for consumers to return containers, is proportionate and simple to understand and is workable for producers and retailers.
DRS operator Exchange for Change’s analysis included behavioural market research to test consumer response to deposit levels ranging from 10p to 30p. This showed that deposit levels below 15p are unlikely to provide sufficient incentive to help achieve target return rates of 90 per cent of containers within three years, while it was found that a 30p level could result in a disproportionate consumer cost exposure at the point of purchase.
The analysis also considered the potential of applying a variable deposit value depending on the size of container or material. While variable deposit structures are in place in some countries with a DRS, the analysis found this often results in consistently lower return rates on smaller containers.
ACS chief executive Ed Woodall said: “We welcome the announcement of the 20p deposit rate for the scheme as a signal that progress is being made at pace on the details of the scheme operation for retailers. There are however still crucial parts of the scheme that we do not have clarity on yet, the most important of which is the rate of the retail handling fee, which will play the biggest role in retailers making a decision about how to be involved with the scheme.
“We remain committed to working with Exchange for Change to explain the details of the scheme to retailers, and to ensure that the scheme can be implemented in a targeted, sustainable way that causes minimal operational and cost burdens for the convenience sector.”
The Federation of Independent Retailers (Fed) was equally welcoming of the DRS deposit confirmation.
Fed National President Hetal Patel said: “The Fed is pleased that this has now been confirmed. All the evidence from retail engagement in the UK and from other countries already applying DRS around the world indicates it has been set at a sensible level. This will provide customers with a positive nudge to return their bottles and cans so they can be recycled, reducing waste.”
The Fed continues to engage actively on DRS – serving on Exchange for Change’s Advisory Board – and is calling for DRS to be “revenue-neutral” for retailers, with a generous handling fee and a system of grants to help small shops prepare for the change next year.
Access ACS’ comprehensive guide to the Deposit Return Scheme here
