Inside Ireland’s new deposit return scheme

Anyone involved with Scotland’s flopped deposit return scheme will be green with envy at what’s happening in the Republic of Ireland this week. As of 1 February, DRS Ireland is “alive, alive, oh”, minus the delays, political fallouts or industry infighting that has characterised attempts to introduce it in the UK. It’s even used the same theme song that was envisaged for Scotland – Sing it Back by Moloko.

It becomes the world’s 41st DRS system (the 15th in Europe), with customers being encouraged to “bring it back” to supermarkets and smaller stores from Dublin to Cork.

Ireland has nearly 2,000 reverse vending machines (RVMs) installed, from supermarkets and c-stores to forecourts. Shoppers will now pay 15-25 cent deposits on plastic bottles, which will be repaid in the form of in-store food and drink vouchers.

Yet the scheme, covering plastic bottles, aluminium and steel cans, but excluding glass and HDPE milk bottles, has not encountered anything like the same controversy as in the UK.

Across the Irish Sea, DRS became an unseemly wrestling match over independence between Holyrood and Westminster, while retailers and suppliers raged over handling fees and other issues.

In contrast, those from the Irish industry, including supermarket and drinks bosses, The Grocer met last week in Dublin were busy praising each other – and the Irish government – for their teamwork and communication.

Recycling rates

Ultimately, the Irish scheme is driven by Brussels, with the EU targeting a 77% recycling rate for plastic bottles by 2025, rising to 90% in 2029. As a result, DRS is fast becoming the norm in Europe.

With Ireland’s rate hovering between 60% and 70%, despite boasting one of the EU’s leading kerbside recycling systems, DRS has been in the works for three years now.

It was really ramped up in the past 18 months, the groundwork prepared by a cross-industry board including the likes of Tesco, Coca-Cola, Musgrave, Britvic, Diageo and Heineken.

It’s being masterminded, though, by Re-turn, a not-for-profit of just 36 employees, from a business estate overlooking Dublin’s main commuter ring road.

The man charged with delivering is Ciaran Foley, former managing director of DHL Ireland. He took up the role heading the company last October after it was appointed by the Green Party-led Irish government’s circularity department without any serious rival bidder.

The scheme has its origins in Re-pack, Ireland’s long-running circular economy body. Foley is anxious to point out the two are separate, despite sharing, for the meantime at least, this unglamorous abode. “We will get new offices at some stage,” he smiles.

“We’re pleased and surprised at the reaction from the industry, and to have nearly 1,900 RVMs in place for launch in a country this size is phenomenal,” he says. “All the retailers of any scale are going for it.”

Customers will pay a 15 cent deposit for bottles between 150 and 500ml and 25 cents for 500ml to three litres on any product featuring the new Re-turn logo – also a massive labelling exercise for those involved.

The Irish public have been on the receiving end of a massive media campaign and a major poll shows strong support for scheme. Although, a bit like a massive, high-stakes board game, the overriding attitude seems to be the best way to educate a sometimes bamboozled public is to get on with it.

Bigger than any TV campaign, though, is the sudden presence of the DRS network in stores.

Unleashing ‘the monster’

At Clarehall Shopping Centre, on the eastern outskirts of Dublin, a sprawling Tesco Extra boasts the mother of all DRS machines, capable of handling 100,000 empty bottles per week and costing a cool €200,000.

“A monster,” is how Darrin Honer, Tesco country operations manager for Ireland, describes it.

And its presence means a large prime sales space housing fresh food had to be moved, sparking a chain reaction that meant shifting around 25 different sections.

“We literally had to turn the store sideways,” says Honer, who reveals Tesco spent €15m in the rollout, which will see all its stores equipped with DRS machines, including even “the most baby Express”.

The “monster” can handle four customers at once, returning up to 240 empties a minute, and Tesco has trained a team of DRS champions to help any bemused customers, despite best efforts to make it idiot-proof.

If the cost of installation is staggering, so is the maintenance. Clarehall’s is expected to run at more than €500,000 a year, but with Tesco expecting two out of three shoppers to use the machines each week, the footfall the machine will attract is immense.

That’s not to say all has been smooth in the run-up. Honer describes “robust” discussions with Re-turn on how often the machine will be emptied.

The supermarket’s biggest fear is machines ending up full, smelling of stale beer, with customers queueing for the pleasure.

“The bottles will be collected six times per week, which is 70 full bins per week,” he says. “That’s substantially more than had been proposed. But I must say this about Re-turn: you can get in a room with them and sort things out. Which is what we did.

“We could have had about 40 smaller stores excluded, but we made a decision they should all have it, that we didn’t want the risk of customers going elsewhere,” says Honer, suggesting the support works both ways.

At a Lidl store a few minutes’ drive away, a similar desire to make DRS fit alongside the regular shopping trip has dictated its spending.

Lidl investment

Shoppers will be met by two machines at the front of all Lidl stores, and at €50m the discounter’s investment in its 160 stores claims to comfortably outstrip Tesco, having been involved in trials of the technology for more than two years and already handled more than two million returns.

It’s developed three different types of machines depending on the size of store, and there are also differences in how customers redeem their deposits. Tesco, for example, will allow customers to redeem their vouchers at any store, whereas with Lidl it’s store specific.

Colin Walsh, senior project manager, Lidl Ireland, says the discounter has also come up with a solution known as “backhauling”, which will reduce the number of lorryloads required to take empty bottles by storing them for longer periods in giant containers at its distribution centres.

“We didn’t want having more trucks on the road to defeat the object of DRS. Having nearly 200 trucks on the road a couple of times a week, which is what we’d been looking at, didn’t make sense,” he says.

If DRS is a success, the next task will quickly become inviting companies to bid to run an Irish-based recycling centre.

This would help stop the annual process of thousands of tonnes of packaging going to the UK and elsewhere in Europe. It would also mean the material from bottles could ultimately be re-used up to seven times without leaving the country.

“We need to get live first, but almost immediately we’ll be looking at who would be interested in building a recycling centre in Ireland – and we do know there are people interested,” says Foley.

“I’m told you need about 15,000 tonnes to make such a plant economically viable. We’re probably going to have about 25,000 tonnes from DRS when we reach the 90% [target].”

However, when DRS went live it was without two-thirds of the 6,000 supermarkets, c-stores and petrol stations selling eligible beverages.

Thousands chose to opt out amid concerns over the costs involved, particularly after Re-turn lowered the size of store at which retailers could opt out from 250 to 150 square metres.

Another glaring gap in the service comes online, with online-only retailers exempt from providing takeback services. Meanwhile, traditional retailers selling drinks online are being encouraged to provide takeback services, but only voluntarily and minus the financial returns – despite the potentially high costs involved.

Despite these not insignificant setbacks, Re-turn’s Foley says he is confident there will be a substantial second wave.

“It’s certainly not been the case that all small retailers opted out. At least 400 of them could have taken an exemption but didn’t.

“What the RVM suppliers tell us all over the world is that you very quickly see a wave two. Retailers will see what’s happening across the country, and customers will be asking why aren’t they doing it. That’s what we expect will happen here,” he says.

Grants of up to €6,000 are available to smaller retailers to put towards the machines, which start at €11,000 for smaller versions.

Fraud concerns

Unfortunately, it’s expected that criminal minds might also be eyeing the financial opportunities to exploit and defraud.

Re-turn acknowledges it will be impossible to monitor the 220 different crossing points between the north and south, and hopes it won’t be long before an interoperable system is up and running in Northern Ireland.

“We’ve built in anti-fraud mechanisms and we’ve also built in charges to producers, which we think will mitigate us against fraud, but we’ll be working closely with the local enforcement agencies,” says Foley. “We’ll review at the start of 2025 what the level of fraud is, and maybe we could look at the rates that we’re charging people.”

There are reports some independent breweries in the north are considering pulling sales to the Republic because of the requirement for new barcodes and logos on the can, which they say make trading unprofitable. Yet Foley says the number of businesses that have actually decided to stop supplying is “tiny”.

For now, like it or not, the cynics – and when it comes to DRS there are many – will have to accept that Irish eyes are smiling on the scheme, while the wider momentum across Europe appears unstoppable.

The big question now is how long before the UK and its much larger pool of shoppers and retailers gets to the same point of no return.