Exchange For Change, the organisation delivering the UK’s Deposit Return Scheme (DRS), has announced producer fees for all drinks containers will be set at 0p for the first 15 months. With a year to go until the scheme goes live, Bill Power, chairman at DRS International, a specialist consultancy and DRS specialist, answers Packaging Scotland’s questions about this decision and the general direction of travel
Q) What was your reaction to the news of a 0p producer fee for the first 15 months?
A) It gives producers a firmer basis for financial planning. The announced 0p Producer Fee applies from October 2027 to December 2028, with the fee structure subject to review and reconfirmation in May 2027. Businesses can use that information to budget for the packaging, systems and operational changes still required, and model the projected fees from 2029.
We think it is a sensible way to make use of the relatively high value of unredeemed deposits at the start of any scheme to help minimise any inflationary pressure on consumers and households. Similarly, they have announced a generous grant scheme to help qualifying small independent retailers with RVM purchases, although retailers must fund installation before receiving the first grant payment. This is always a difficult task when schemes get up and running.
The immediate task is to fund and deliver the changes needed for launch. Producers and customers need to agree in detail about the product prices, how deposits appear on invoices, and whether payment terms or credit limits need to change. A recoverable deposit can still tie up cash before the customer pays.
Q) Do you fear that some companies might use this grace period as an excuse to delay preparations? What are the potential pitfalls of not proactively preparing for DRS?
A) The 0p producer fee for the first few months is a commercial matter for producers – it doesn’t change the nature or timing of their legal obligations under DRS. Therefore, producers, wholesalers and retailers need to act now. The 1 October 2027 launch requires packaging, systems and stock changes that must be agreed and tested across the supply chain. The initial 0p fee does not remove that work.
Packaging already ordered, production schedules and slow-selling lines need attention now. A producer may be ready to switch packs while a wholesaler or convenience store still holds the old version.
Without agreed ordering and delivery plans, businesses risk stock write-offs, shortages and avoidable waste, particularly around Christmas trading. Handling deposit and non-deposit versions together also creates extra work for stock control, shelf pricing and staff explaining refunds.
Q) What is your advice for producers in terms of what they should be doing right now to be ready for DRS?
A) Our advice to producers is to start now, and treat DRS readiness as a business-wide programme rather than a compliance exercise for one team. The first step is to appoint a senior owner with clear accountability who will assign responsibilities across finance, procurement, commercial, packaging, supply chain and IT.
With that governance in place, producers can confirm packaging commitments and lead times before agreeing production and delivery dates. They should also identify every affected product and legal entity so that registration data is accurate from the outset. Retailers and wholesalers that import drinks or sell own-label products should not assume the obligations lie elsewhere. They need to establish early whether they also have producer responsibilities.
Readiness goes beyond the producer’s own operations. It depends on close collaboration with customers, particularly during the transition.
Producers should review stock levels and sales rates with retailers and wholesalers, paying particular attention to slow-selling and seasonal lines most at risk of being left on shelf. Both sides should agree the timing for ordering to switch to compliant stock, when DRS-compliant packs and product data will arrive, and how remaining old stock, returns and credits will be handled within the confirmed rules. Price-marked packs, multipacks and promotions need the same planning, so that shelf prices, deposits and till systems all match the products delivered.
Financial planning needs the same early attention. Producers should calculate both implementation costs and deposit cash requirements at a detailed level, by product, customer and sales channel, as well as for the business as a whole. Timing is particularly important, because deposits payable to the scheme and deposits received from customers may not fall due at the same time, and that gap can put pressure on working capital. Systems also need testing well before launch. Producers should work with their trading partners to test orders, invoices, credits and reporting, including any electronic document exchange (EDI) links. Retailers, for their part, should ask each supplier for a dated delivery plan and a named contact who can resolve problems quickly. None of this depends on every scheme detail being finalised, and producers who act now will be far better placed than those who wait.
Q) What is your general view regarding the direction of travel for the UK’s DRS scheme?Â
A) The direction is positive, although there is still a way to go for Exchange for Change before all stakeholders have full confidence in the system and processes.
The deposit, packaging requirements and intended fees provide a firmer basis for preparation, and I am confident DRS can reduce litter, increase collection volumes and recycling of in-scope containers, and improve the quality of recovered material. Cleaner, better-separated plastic (PET) and aluminum can support food grade quality material requirements for recycling into new drinks containers, reducing demand for virgin material and associated emissions. Collection alone does not guarantee that outcome; the material must also be sorted and reprocessed appropriately.
Exchange for Change has developed a proposed transition arrangement for regulatory consideration although we have not seen a confirmed timetable. Producers, wholesalers and retailers will need clarity on when existing stock can be supplied and sold, and how remaining stock will be treated, to avoid unnecessary waste and gaps on shelves. They must act now on packaging orders, systems changes and stock planning while those arrangements are settled.
Public understanding will be critical to the scheme’s success. For many consumers, their first encounter with DRS will be at the shelf, when a 20p deposit appears on a familiar product. Unless they understand why it has been applied, which containers are included, and where and how it can be redeemed, that first encounter risks creating frustration rather than support. Exchange for Change will lead national communications closer to launch.
However, the message must also be reinforced consistently wherever the consumer meets it: on packaging, at the shelf edge and at the point of sale. Convenience store staff will be the scheme’s most visible representatives, so they must be able to give clear and confident explanations, for example, when a container is rejected at the RVM. Communication alone will not be enough. Accessible return points, available RVMs, and clarity on the deposit refund process will do most to build repeat participation, and only a consistently positive experience will turn returning containers into an established habit.
