UK – Retailers are calling on the government to review plans to introduce a bottle-recycling deposit return scheme (DRS) that may cost the sector at least £1.8bn a year, according to new research from the British Retail Consortium.

BRC says the figure does not include the “hundreds of millions of pounds” the industry requires to set up a body to run the scheme. Furthermore, start-up costs like buying machines are estimated to hit businesses “much earlier.”

If put into effect the DRS is estimated to cost the industry £1.8 billion (US$2.28bn) a year from 2025, which includes capital costs such as buying and installing return vending machines, labour, staff training and other operational costs.

Andrew Opie, director of Food & Sustainability at the BRC said: “The proposed DRS is costly, complicated and cannot deliver the step change in recycling needed to justify it.

“By driving up costs by almost £2 billion (US$2.6 billion) per year, the government risks pushing up prices for ordinary households, just as inflation is coming down.”

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 the 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.

The 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.

The government’s recent decision to delay the implementation of EPR has provided an important opportunity to redesign aspects of this policy, which will see the industry pay 100% of the costs of collecting and recycling the packaging they produce.

While retailers may be able to absorb some of the costs of implementing these new policies, introducing EPR and DRS together would inevitably place upward pressure on consumer prices.

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