Deposit Return Schemes offer profit potential

By Paul Gander

- Last updated on GMT

Larger brand owners are set to benefit financially from operating Deposit Return Schemes
Larger brand owners are set to benefit financially from operating Deposit Return Schemes
While many manufacturers have been cautious about the implications of a UK-wide Deposit Return Scheme (DRS) for beverage containers, which is now government policy subject to a consultation later this year, larger brand owners can benefit financially by administering or operating such schemes on a regional basis.

Many concerns focus on the need for a consistent system across the UK. But as the Food and Drink Federation (FDF) has pointed out, the importance of co-ordination goes much further.

“We support the Government’s intention to issue, later this year, a single consultation covering a DRS, producer responsibility reforms and new packaging recycling targets, which should help to ensure policy cohesion,”​ chief scientific officer Helen Munday told Food Manufacture.

‘Success of kerbside recycling’

Munday talked about “building on the success of kerbside recycling and improving capture rates for packaging consumed on-the-go”,​ with the emphasis on consolidating kerbside collection rather than undermining it.

This is important, since some materials such as polyethylene terephthalate (PET) and aluminium cans already achieve high rates of collection this way.

At plastics recycling consultancy Nextek, managing director Ed Kosior said: “PET has a higher recycling rate than other plastics, as high as 60% or 70%, and existing systems are doing a good job. The authorities are hoping that a DRS might take that up to around 90%.”

Some have argued that, on top of the deposit itself, drink prices would need to rise to cover infrastructure costs.

Unrefunded deposits

“But a key question is: who holds on to the unrefunded deposits?”​ said Kosior. “In some parts of the world, the organisation running the scheme is permitted to keep unclaimed deposits after, say, a year.”

Brand owners and retailers could benefit from creating their own closed-loop recycling systems – and potentially lucrative profit centres.

“Aldi in Germany reprocesses its own drinks containers,”​ he said. “And in South Australia, Coca-Cola owns the entire recycling system.”

Related topics: Packaging, Packaging materials

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