A collaboration involving leading supermarkets and drinks manufacturers is the “only game in town” when it comes to launching the UK’s deposit return scheme, The Grocer understands.
The bid, which is being overseen by accountants PwC, includes giants such as Tesco as well as a who’s who of major soft drinks companies. Sources are confident that the industry infighting that contributed to the downfall of the scheme north of the border and its ill-fated deposit management organisation (DMO), Circularity Scotland, can be avoided.
The prominent involvement of Tesco in the steering group leading the bid is being seen as a major coup, with the UK’s biggest supermarket having seen its enthusiasm for DRS seriously dented amid the fiasco of Scotland’s proposals, The Grocer understands.
Defra last week issued an official call for interested parties to come forward to take on the role of DMO. The legislation to underpin DRS across the UK is due to be laid next month and come into force early next year.
The new standalone, not-for-profit company would be charged with handling up to 20 billion containers a year across the UK, as well as setting deposits and handling fees.
The department has stressed it will be voluntary for retailers to decide if they want to offer physical reverse vending machines in store for takebacks, though it is still expected a network in major supermarkets would be a key feature of the proposals.
Under the law governing the devolved nations, there has to be a separate bid awarded for each country.
However, Defra sources confirmed they hoped that one organisation would emerge to run the entire of the DRS operation, to maximise hopes of “interoperability”.
As well as a raft of major supermarkets and drinks companies, such as Coca-Cola, AG Barr and Lucozade Ribena Suntory, the group also includes major water companies such as Highland Spring and various industry trade bodies.
Defra has said that to be eligible to bid, a body must have widespread support “across the industry”.
“The PwC bid is the only game in town,” said one source. “The signs are really encouraging that different sectors within the industry have learnt from what happened in Scotland and have stopped all the infighting that helped to ruin that scheme. They are getting behind DRS and the signals coming from government are as positive as they have ever been.
“We never take anything for granted given the rollercoaster history of DRS but it does look like it is all systems go for October 2027.
Defra plans to appoint the DMO by April next year. The Grocer understands one of the key requirement from companies backing it is for the regulations to be laid to help with securing bank fundraising.
The collapse of Circularity Scotland amid reports of huge debts threatened to discourage banks from lending, but sources are confident that widespread involvement across industry and government support will lessen that threat.
“I think there is a realisation that we have to step forward and get on with this as an industry,” said another source. “Forming a DMO is not going to be easy and there will undoubtedly be major challenges ahead, but people are coming together to do all they can to make it work.”
One major sticking point, however, remains the position of the Welsh government, which still wants to retain glass in its DRS scheme. A proposed compromise deal would see glass from wine and spirits excluded while soft drinks, ciders and beer bottles are retained within scope.
“The Wales situation is still very unhelpful,” admitted the source. “The biggest threat facing the successful launch of DRS is anything which threatens interoperability across the different countries and that’s been made clear to the governments involved.”
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