What shape will the deposit return system bottle recycling scheme be in by August?
With just over 200 days before it is due to go live, the UK’s first deposit return scheme looks a very different beast to the one initially proposed.
Rowbacks by the Scottish government mean tens of thousands of smaller stores can opt out, as can online retailers such as Deliveroo and Amazon, after they expressed fears it would wreak havoc with deliveries. As result, it appears likely only major supermarkets will provide the expensive new reverse vending machines. Producer fees have also been slashed, by up to 40% in a bid to calm a rebellion over implementation costs for businesses by companies funding the scheme, a move only possible due to the extent to which its ambition has been scaled back.
So, has pragmatism won the day or has DRS – which is later to be rolled out in the rest of the UK – been diluted to the point where it’s a meangingless recycling shambles?
Soft launch
Last month an independent ‘gateway review’ commissioned by the Scottish government called on ministers to “urgently re-evaluate” the plans, including the start date of 16 August warning it would not be possible to launch a “fully functioning and compliant DRS” in such a timeframe, despite the go live date already having been delayed twice.
“Almost all interviewees expressed very serious concern about the timescales, even with the date having been moved back more than one year,” the review found.
Instead of a full rollout, the review calls for a ‘soft’ launch, which would be a far cry from the governments original “all in” approach.
Yet despite promising there will be no going back on the start date, the government had already begun dismantling key parts of its plans.
In November it confirmed The Grocer’s exclusive revelation that thousands of smaller retailers would be able to opt out of the scheme amid fears over handling costs and the impact on producers of funding up to 30,000 return points across Scotland - a figure which would have been dwarfed in the wider UK rollout.
Last month came further concessions with scheme administrator Circularity Scotland Limited (CSL), whose membership includes most of the major drinks producers and supermarkets in the UK, announcing it was slashing its producer fees (applying to glass, aluminium, and plastic products) by up to 40% as well as a “very significant” reduction in upfront costs to cover unclaimed deposits.
Then, in yet another climbdown, Scottish Green minister Lorna Slater confirmed a report by The Grocer that those online retailers, including Amazon, would be exempt from the system, after they expressed fears DRS would wreak havoc with deliveries.
Only major supermarkets will have to take part in online returns, and even then, not until 2025 – and exposes the difficulty the Scottish government has had in passing the baton to industry.
“There was a commonly accepted opinion that [the government] should ‘step back’ and that industry, [in the] guise of Circularity Scotland (CSL), should be leading implementation,” it found. But it claimed CSL was “not yet able to make ‘meaningful decisions’ that are required for other parties to take forward their responsibilities for implementation”.
Indeed, despite being made up of producers and retailers, CSL has found itself embattled by a judicial review proceeding from small retailers furious at handling fees, and anger from producers – particularly in sectors such as the wine industry – who believe glass should never have been included in DRS.
Yet CSL’s CEO David Harris insists that given the challenges it faces, the organisation is as ready as it could be for launch.
“With that mandate industry has given us, we’ve gone away and secured £100m-plus of investment. That’s a huge commitment in terms of readiness,” he told The Grocer. “We’ve got three counting centres in the process of being set up, £20m worth of counting equipment on order, the vehicles are on order. Biffa [the scheme’s logistics partner] is recruiting – they need 500 people.”
“We’ve gone from a shell company with nothing to now approaching 50 people, plus a big eco-system in terms of the IT build and that capacity runs through finance to customer service.
“We have teams out there engaging with the industry.”
‘Don’t expect too much’
CSL is planning a roadshow to raise awareness among smaller companies in the new year.
Nevertheless, he warns not to expect too much come August.
“We are absolutely committed to being ready, but 16 August is a step on a journey,” he says. “I think we’ll certainly see a good coverage of automated return points. We’re confident that will include smaller retailers. We expect to see a good spread.
“We are working hard with Biffa and industry to make sure that when it starts the consumer has a good experience.”
However, “we’re keen that this is a scheme that works for business. We’ve been created by probably the most diverse groups of industry that has ever come together to do something, and we are building an enormous infrastructure,” he adds.
“There are tens of thousands of businesses out there that are potentially impacted. Many of them will come to it at some point in the future.”
A senior drinks industry source calls the moves to streamline DRS a “victory for common sense”.
“I think there’s a recognition it won’t be perfect on day one. But I think CSL has got a lot of unfair flack when it’s really just been doing its best to implement regulations.”
Ewan MacDonald-Russell, deputy head of the Scottish Retail Consortium, says retailers welcome the “belated” acknowledgement from government that key parts of the scheme are not achievable, but claims important questions remain unanswered.
“With eight months to go, retailers don’t know what price to put on the shelf, whether VAT will apply, or how often bottles will be collected from their stores,” he says.
And far from pragmatism, Wine & Spirit Trade Association CEO Miles Beale says the barrage of last-minute changes are causing “confusion and chaos” at a time when clarity is most needed.
It’s clear there are more questions than answers right now. And here’s another: will DRS also spell confusion and chaos for customers, blunting the scheme beyond confusion?
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