In a recent roundtable, we discussed the implications of a DRS in England and Wales with key contacts from a range of leading drinks retail businesses and manufacturers. The roundtable highlighted various challenges faced by all businesses in terms of investing in and preparing for the implementation of DRS in Scotland from July 2022 and across the rest of the UK thereafter. With many of our participants having ecommerce streams and online retail presence, more specific challenges around 'take back' service obligations were also identified as being of critical significance.
Consistency of DRS across jurisdictions
Scotland is in some senses 'ahead of the curve', having already enacted regulations and set a date for implementation. However, those regulations are short and high-level, setting out the key DRS obligations. Guidance remains very much in its infancy.
DEFRA's consultation appears to be asking for greater granularity and a range of design options are still on offer.
There are concerns that businesses will end up trying to comply with two very different DRS schemes operating in the UK.
Would it be better to encourage DEFRA to follow the same design and principles as already 'in place' in Scotland to try to achieve consistency across the UK and not confuse consumers? Should we be trying to help DEFRA design the best possible scheme, even if that means there is no common approach, leaving businesses and consumers to understand and accommodate two different systems?
Producers and retailers will face logistical challenges in meeting DRS obligations. The relative 'simplicity' of DRS as a concept is undermined by the complexities of modern supply chains, particularly in relation to online retail and takeaway delivery models.
For example, online retailers will be required to operate a 'takeback' service under all UK DRS models, the infrastructure and processes required to be able to do so pose numerous logistical and health and safety challenges.
Scope and Labelling
The inclusion of glass bottles within the scope of the Scottish DRS and DEFRA proposals remains controversial – mainly due to existing high rates of glass recycling, environmental/hygiene challenges – and similar arguments remain around the inclusion of milk bottles. It is broadly accepted that an 'all in' scope for container size would help send a single consistent message to consumers. How scheme articles are to be identified is a key concern.
Some may feel that Scottish DRS regulations and DEFRA proposals may have landed 'too soon' and that a digital DRS may have represented a better option across the board. However, DRS is clearly on its way and, although the detail remains uncertain, the direction of travel is clear.
Businesses should be thinking ahead and investing time and resource in mapping out their obligations arising under DRS and considering how they can adopt (or adapt existing) business processes to comply. Innovation in terms of strategic partnerships, driving changes in consumer behaviour, and alternative packaging may require thought.
Key Dates and Next Step:
- 4 June 2021 - Closing date for responses to DEFRA DRS consultation
- 1 April 2022 – Plastic Packaging tax commences
- July 2022 – Scottish DRS expected to 'go live'
- 2023 – Roll out of DRS infrastructure in England & Wales
- 2024 – DRS across rest of UK expected to become operational