Major business consequences of Deposit Return Scheme

Manufacturers, importers, wholesalers and retailers are being warned that significant regulatory change is coming under the Deposit Return Scheme (DRS).

Due to launch across the UK in October 2027, it will fundamentally change how drink containers are sold, labelled, collected and recycled and create significant new obligations for businesses. Its primary objective is to improve environmental sustainability.

Under the DRS, consumers will pay a refundable deposit on eligible drink containers at the point of purchase and reclaim that deposit when the empty container is returned to a designated collection point. The scheme will apply to single-use PET plastic bottles and metal cans between 150ml and three litres. Exchange for Change, the industry-led Deposit Management Organisation (DMO), has confirmed that the deposit will be set at a flat 20p per container.

Some bottles will be excluded, such as plastics used in milk containers and medicine bottles.

Producers and importers

For drinks producers and importers, compliance will extend far beyond simply adding a deposit charge. They will have to register with Exchange for Change, report the volume of in-scope containers placed on the market, ensure products carry compliant DRS labelling and markings and contribute producer fees to fund the scheme's operation.

Retailers

Retailers will also face new responsibilities, including charging deposits at the point of sale, operating return points unless exempt and refunding deposits to consumers. The changes could have serious implications for a business’s invoicing, VAT, packaging, pricing and even logistics processes. Both government and industry groups are recommending that preparations should begin now to avoid operational disruption.

Commercial impacts

The new flat-rate deposit system means large volumes of cash will flow through businesses before being redeemed by consumers. This creates new cash flow considerations, particularly for retailers and wholesalers. Additionally, businesses will need systems capable of accurately tracking deposits, returns and reimbursements while ensuring compliance with reporting requirements.

For companies operating across multiple UK jurisdictions, there are other complexities. Wales is developing a separate DRS that will include glass bottles, unlike England, Scotland and Northern Ireland. Although deposits will not be applied to Welsh glass containers until 2031, businesses will have to face different labelling, reporting and operational requirements for the same product range.

The European question

International businesses must also monitor developments in Europe. The EU Packaging and Packaging Waste Regulation (PPWR) requires Member States to establish deposit return systems for single-use plastic beverage bottles and metal cans by 1 January 2029, with a target of achieving 90% separate collection rates. As a result, UK exporters may find themselves managing multiple DRS compliance regimes simultaneously, increasing administrative complexity and regulatory risk.

With less than a year before detailed implementation activity accelerates, businesses should already be assessing product portfolios, reviewing contracts, updating IT systems and planning packaging changes. For the drinks industry, the DRS is no longer a future policy discussion. It is an imminent commercial reality that requires preparation today.

If you have accounting concerns about the introduction of the DRS, please get in contact. We’re here to help.

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