Leading soft drinks companies and industry trade groups have begun talks on forming a body to run the UK’s deposit return scheme.
The Grocer has learnt that leading accountant PwC has been drafted in to oversee the process, aimed at setting up an industry-run administrator to be responsible for the IT and infrastructure to support over 20 billion containers across a network of reverse vending machines.
The government is understood to have told industry leaders it wants to see a finished proposal by January, giving companies just five months to complete their bids, if it is to hit its target of a DRS launch by October 2027.
Sources have called for unity on the plans to prevent a repeat of the infighting that helped sink the pioneering Scottish scheme.
However, sources have admitted there are major barriers to overcome if the Deposit Management Organisation (DMO) is to be successfully launched, with its own CEO, leadership team and a massive infrastructure, including counting and sorting centres, equipment and collection vehicles.
“Discussions have started among producers and there is representation too from the retailers,” a source told The Grocer.
“The first priority of these talks is to come up with proposals for a DMO that has tangible industry support from producers and retailers. The government wants this by the beginning of 2025 so we have just five months to get our ducks in a row.
“Considering all the potential barriers to agreement, it’s not a bad thing to have a third party (PwC) involved in the talks, acting as a consultancy to help the conversation.”
Scotland’s DRS was torn apart by political infighting both within industry and between the UK and Scottish governments. Scotland is now due to launch a scheme with the remainder of the UK in 2027, though there is dispute over plans in Wales to include glass in its system, which companies on all sides have warned risks chaos.
Under the government’s latest schedule for DRS it plans to appoint a DMO in the spring of next year, with the organisation then given a year to start the rollout.
Scotland’s administrator Circularity Scotland collapsed owing more than £70m to debtors after ministers pulled the plug on the scheme. The job of forming a UK-wide body is now widely regarded as a political and economic minefield.
A leading drinks source told The Grocer: “A group of producers and retailers who are all on the hook for the DRS implementation have begun discussions with trade bodies about the best way forward.
“We have until January to agree on an application and as far as I’m concerned, there is only one outcome that we need to achieve.
“We need an application for DMO that everyone is confident with and will get behind.
“The lesson for Scotland is to make sure that everyone feels involved in making up the structure.”
Meanwhile, industry leaders have called on the new Labour government to urgently signal its prioritisation of support for DRS. One of the last acts of the previous government was to send the proposal regulations to the European Union and the World Trade Organization.
“After years of delay, the new Labour government has an unprecedented opportunity within its first 100 days to take crucial steps to deliver a DRS in the UK,” Fraser McIntosh, head of external affairs & sustainability at Suntory Beverage & Food GB&I, wrote on the Politics Home website.
“The draft DRS regulations are ready to be laid and are supported by industry and environmental groups. They also have cross-party support and should require very little parliamentary time to approve.
“If the Labour government lays the regulations in the coming month, SBF GB&I and others in our industry will be able to deliver a DRS by October 2027.”
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