The UK Soft Drinks Conference 2022 was dominated by concerns over the Deposit Return Scheme (DRS) and Extended Producer Responsibility (EPR).
David Gell, Policy Officer for Deposit Systems at the Department for Environment, Food and Rural Affairs (DEFRA) was candid in his responses to industry questions. “I think it’s complicated. There are a lot of moving parts. For various reasons, the Scottish program has already been delayed.
DEFRA held the second consultation on the program last year and Gell said the priority was to put the next steps in place.
“We also recognize that we have to get it right. It’s complex and takes a bit of time, but hopefully we’re using that time to think about key things.
DEFRA has not confirmed when the government’s response to the consultation will be published, before or after Parliament’s summer recess.
“After that, we have to get the legislation through parliament. My team is currently doing a lot of work to draft this legislation and put it into place. We then need to appoint a Deposit Management Organizer (DMO) to manage the program, as has been done in Scotland with Circularity Scotland, and once the DMO is in place delivery can really start working around that date. commissioning, whatever it is.
One of the main concerns for the conference – and for the industry in general – is the uncertainty about uniformity between countries of origin in the UK.
Coca-Cola Europacific Partners (CCEP), the largest bottler of Coca-Cola, has always publicly supported the introduction of a DRS across Britain, but Julian Hunt, vice president of public affairs, communications and sustainability, said consistency was important.
“A major challenge for the industry is the emerging divide between Scotland and the rest of Britain, both in terms of the timing and scope of programs put in place. A truly effective DRS will only work well only if we implement a consistent approach and if the systems are fully interoperable.It is important to get it right so that it works for industry, consumers and, most importantly, the environment.
Gell added: “Decisions are made by ministers in devolved governments. The intention is that the systems are interoperable and that we can have a consistent system across the UK. It may even be that when the Scottish program is in force, the rest of the British program is.
VAT on DRS
Gavin Partington, chief executive of the British Soft Drinks Association (BSDA) and chairman of the International Council of Drinks Associations, said the industry was very concerned about the possibility of VAT being levied against the DRS.
“It’s another department of government,” said DEFRA’s Gell. “We have to recognize that there is a VAT regime in the UK and decisions are being made by HMT at the moment. There can only be one answer for the whole of the UK VAT.
Suntory Beverage & Food GBI, owner of Ribena and other brands, is a founding member of Circularity Scotland and fully supports a DRS, but is concerned about the VAT issue.
Liz Nieboer, sustainability and external affairs manager at Suntory Beverage and Food GBI, told Packaging News: “Along with other soft drink companies, the BSDA and a host of industry trade bodies, we believe it is important that the UK Government address the issue of applying VAT to deposits in the four countries Keeping this mechanism in place would effectively tax the incentive that exists to encourage good consumer behavior and would potentially entail enormous cost and complexity for producers.
Glass or no glass?
Partington said the sector faced a clear glass challenge: Scotland and Wales included glass in their DRS, but the UK government has so far said England and Ireland from the North would exclude glass.
“So you already have a barrier to interoperability there,” he added.
DEFRA, Gell insisted, is aware of interoperability issues, particularly around glass.
Partington said it should be possible to have a single DMO operator across the UK to deliver this interoperability, even though they are theoretically different systems.
Gell added that DEFRA was open to a digital DRS element – and he was delighted to see trials taking place in Wales – but there remained fundamental questions about whether it was deliverable at the moment.
Municipalities are known to be particularly concerned about DRS – given that they currently collect the vast majority of curbside household containers – which is a form of revenue for them, especially from plastic packaging. Good quality PET.
“Local authorities derive a stream of revenue from packaging, and some materials are of greater value than others,” explained Partington of the British Soft Drinks Association. “One of the concerns for them is that they will lose some of their most valuable materials with a DRS program. Likewise, the recycling industry wants to know if it’s going to do business – right now it’s making money off some of the materials.
He said the beverage industry naturally wants to ensure that a DRS is processed towards circularity by putting its material into the recycling stream and recovering a proportion of that material, and that it is not “reduced in material for applications like tarmac. or benches.
REP Tax and Plastic Packaging
Gell explained that the DRS is part of DEFRA’s resources and waste, and the portfolio of collections for packaging performance includes DRS, EPR for packaging for England and consistency of household collections. “The EPR for English Consistency Packaging is a game-changer by making recycling easier.”
He said he hopes all of these programs, along with the tax on plastic packaging, will provide an incentive to collect materials and invest in national processing infrastructure.
“For us, DRS is very clearly our step towards extended producer responsibility – as a positive step,” Partington added.
Gell was supportive of this: “I agree that DRS is a form of EPR; they are one and the same.
CCEP’s Hunt told the conference that it was reassuring to hear the same conviction about the importance of making DRS as functional as possible.
He added: “For now, we await with interest the outcome of the consultation conducted by DEFRA and hope that its proposals will deliver on our shared ambition to create a successful DRS across Britain that works for all.”
Gell said: “A lot of the fundamental decisions about how the program works and whether this program aligns with a Scottish program are actually in the hands of industry.
“There is still a lot of work to do there. It’s a very complicated and far-reaching policy, but it’s a real driver for what we’re trying to do in every package.