The first attempt at implementing a Deposit Return Scheme ended in calamitous failure, but DRS 2.0 is on course to deliver a sustainable, workable solution that benefits consumers, retailers and communities, says Truls Haug of TOMRA Collection.
By Antony Begley
The Scottish Government’s attempt at introducing a Deposit Return Scheme (DRS) will go down in history as a masterclass for the ages in how not to do something that most people wanted to do, including retailers. DRS became one of the most contentious issues in the history of local retailing in Scotland, so the less said about that sorry episode the better. Not erstwhile Circular Economy Minister Lorna Slater’s finest hour.
There’s little value in rehashing that divisive debate, however, but the one thing that stuck with me throughout is the comment I heard from so many retailers at the time: “We want a DRS, we just don’t want this DRS.”
So if retailers didn’t want that DRS, how will they feel about DRS 2.0? Well, there’s certainly a lot more to like about the new scheme that’s scheduled to come into force in October 2027. Or, to put it slightly differently, there’s a lot less to dislike about it.
First and foremost, the scheme is now UK-wide, more or less – Wales is still debating glass – but the likelihood is that the scheme will be UK-wide, massively reducing cross-border complexity.
Secondly, and no less importantly, the UK scheme is being driven and managed not by the government but by a standalone business-led not-for-profit organisation, the UK Deposit Management Organisation (DMO). One of the biggest criticisms of Slater & Co was that they didn’t meaningfully engage with the trade and therefore didn’t understand what they were trying to legislate on. The DMO has learned from that mistake and is staffed by people that know the trade inside out, people like former AG Barr Commercial Director Jonathan Kemp and Bestway Director of Trading Richard Booth.
There’s also people like Raymond Gianotten involved, a former Director of the Netherlands DRS Scheme, and Seamus Clancy, former interim CEO of Re-Turn, the scheme administrator in Ireland.
All good, positive stuff – so are we actually going to get it done this time around? “It’s been a long, long journey but something positive is happening” laughs Truls Haug, Vice President, New Markets EMEA for TOMRA Collection, the global leader in reverse vending machines (RVMs).
“We have a well-designed scheme and having the DMO in place from day one has been critical. They have built up a lot of momentum in a relatively short space of time and they have achieved a lot in that time. It’s a truly business-led organisation and they have recruited well so the people involved in creating the new DRS understand the many complexities and challenges.
“They have clearly learned a lot from the last attempt at introducing a DRS in Scotland and they have used those learnings to make a better system, a system that will work for consumers, for retailers and for producers.”
Unlike the Scottish Government, the DMO has also done a pretty decent job of communicating its progress and being transparent about what it plans to do and how it plans to do it.
“From my interactions with the DMO, they’re very open minded, they’re pragmatic and they’re committed to making progress,” explains Haug. “They understand the needs of the various stakeholders such as retailers and producers, and they’re working towards the best possible solution. Importantly, they’re communicating well and are being very open about their work and are inviting everyone with an interest in DRS to engage.”
Or to put it another way, the DMO is doing the job properly, unlike Ms Slater.
Introducing a scheme like this however, even a very well-designed one, is not going to be entirely pain free. There are many challenges to overcome and a lot of water to go under a lot of bridges before October 2027.
“All big changes come with consequences,” says Haug. “We are talking about a major step forward for Scotland, for Scottish people and for the Scottish environment, so there will be consequences for everyone involved. Those consequences will be different for each individual and for each store, but retailers can minimise those consequences by preparing early.”
Along with a new, fit-for-purpose DRS, retailers are also set to benefit from enhanced tech from major reverse vending machine (RVM) manufacturers that simplifies and elevates the customer experience.
A great example is TOMRA’s new R2 machine, unveiled for the first time just last month. The innovative multi-feed RVM allows users to pour a whole bag of containers in at once. The R2 features a wall-mounted front unit which minimises the amount of valuable store space required. The machine has no batch limit, meaning customers can pour all their plastic bottles and cans in at once and carry on with their shopping.
The R2 is only 0.8 sqm and can simply be plugged in and is ready to use.
There is, of course, another incentive to get DRS delivered on time: the new Extended Producer Responsibility (EPR) regulations which come into force in 2028. EPR basically requires producers to pay the full costs of dealing with the waste generated from when a product is placed onto the market through to the end of its life.
“The EPR regulations provide a huge financial incentive to producers to have a DRS in place in 2027,” explains Haug. “If we don’t have DRS in place by March 2028, producers will need to pay the EPR fee, which will be higher than the DRS fee. And it’s worth noting that the biggest producers in the UK are actually the major retailers like Tesco and Asda.”
The point being, it’s in the financial interests of the major multiples to get DRS done in time and we know only too well how much influence the supermarkets have behind the scenes.
So the big question is: what should local retailers in Scotland be doing about all this? Haug’s response is a single word: “engage”.
Last time around, very few local retailers actually had their plans in place and that was probably down to the fact that they had little confidence that the scheme would actually happen. Turns out they were right. But this time around its different.
When asked, on a scale of one to 10, how confident is he that DRS 2.0 will be in force in 2027, Haug looks up to the skies, grimaces a little and says “eight or nine”.
“It may be delayed by a month or two but my feeling is that it will happen this time,” he says. He quickly qualifies that statement with a chuckle and an addendum: “Having said that, I was pretty confident it was going to happen last time!”
Even at this stage, however, it does feel different this time. The political will is there, the DMO is in place, and the consumer sentiment seems to be there.
“We all know that consumers want to be greener and want to play their part,” says Haug. “And DRS is a brilliant way to make a massive positive change in a very short space of time. The new scheme makes it as painless as possible for us to make that change.”
So if it’s coming, it’s time for retailers to engage and get involved. “My personal view is that last time, retailers were slow to engage. We can’t afford to make that mistake again.”
To highlight his reasoning for urging retailers to get on board now, Haug does some simple maths. “We’re doing installs at the moment at a rate of about 50 a month. From the start of 2026, we will only have about 20 months left before October 2027. If retailers leave it too late, they may run into problems.
“To be clear, the problem is not manufacturing RVMs or getting them here. The challenge is installing them because every install is different. We have challenges with floor space, with electricity, with internet access and so on. Those take time to resolve, so retailers need to be ready and to have their stores ready for the install. That takes time and thought.”
Ultimately, however, Haug’s view is that RVMs will quickly become just another service in store for shoppers. They will become second nature quickly and once that happens, the most important factor for retailers to consider is the shopper experience, just as it is with a coffee machine or a hot dog unit.
“Customers like tech, that much is very clear,” explains Haug. “They like solutions that work, that are slick and that are quick and convenient to use. Retailers will need to provide a great user experience because if they don’t, someone else will. We all know how easy it is to lose customers and how hard it is to get them back.
“Our experience in Europe shows that customers typically bring their returns between two and four times a month and it’s a planned trip. If you offer a great experience you can retain your customers and generate new business into the bargain.”
Not all retailers may wish to install an RVM and exemptions do apply in the new scheme which allow retailers to be fully exempted or they can simply do manual takeback, but Haug offers a word of caution: “Our data from DRS systems cross the globe shows that manual takeback is tricky. In a typical store with an RVM selling around 100,000 bottles, something like 70,000 to 80,000 of those will be returned to the store. In a store doing manual takeback, it’s less than 10,000.”
That’s a lot of custom to lose and, interestingly, it was a problem encountered during the rollout of DRS in Ireland. Over the water, the Irish DMO went to the lengths of subsidising smaller stores to allow them to install RVMs so they wouldn’t be put at a competitive disadvantage. This may be something the UK DMO is considering too.
And while the new DRS looks a lot more fit for purpose, the major RVM manufacturers have also been busy in the last few years evolving and developing their own tech to better suit the needs of independent retailers.
“We offer an RVM that’s only 0.6sqm,” says Haug. “Most stores will be able to find a place for that. And even the machine we would recommend to most local retailers is only 0.8sqm so retailers don’t need to worry about how to fit enormous machines into their stores.”
Most recently, TOMRA introduced its sleek new R2 machine which allows customers to dump entire bags of containers into the machine in one go, rather than one at a time, significantly enhancing the user experience.
In terms of advice that Haug would offer to retailers now, he comments: “Engage with the DMO and sign up for their regular updates. Engage with trade bodies like SGF and BRC. Spend some time understanding the new DRS and begin talking to potential partners to find out what they have available and whether they are capable of delivering for you – and remember that cheap isn’t always better. There’s no point in buying a cheap product if it doesn’t work.”
The key takeaway here is ‘start now’. Implementing a solution in your store that works for you and works for your customers isn’t complex or difficult, but it will take a little time to get it just right before you push the button.
But perhaps the most important shift here is away from simply complying with legislation and towards delivering great customer experience, as Haug concludes: “Local retailers are successful because they are the heart of the communities they serve and they deliver fantastic experiences every time a shopper walks through the door. DRS will be no different. When the scheme is live, regular recycling at a store will become normalised and when that happens, shoppers will choose stores where the experience is best. DRS is a fantastic opportunity to drive loyalty and recruit new customers.”
