Local shops will be unable to afford their share of the estimated £1.8bn cost of preparing for the UK’s deposit return scheme (DRS) without grant funding, the Fed has warned.
The new £1.8bn estimate from the British Retail Consortium (BRC) covers the costs to all retailers of buying and installing reverse vending machines (RVMs), labour costs, staff hours running the scheme, store modifications and lost sales due to space being taken up by the scheme. The system is expected to launch in October 2025.
However, Fed national vice president Mo Razzaq warned independent retailers would be at a disadvantage to supermarkets, who have the funding the support the scheme. He added that while the Fed has supported the DRS “in principle from day one”, it has also “consistently refused to accept that retailers should be out of pocket for implementing it”.
“Grants must be made available for the purchase of expensive equipment and any changes to the layout of shops that are forced to become return points for the scheme,” he said.
The Fed has called for the UK to learn from the Republic of Ireland, where local shops are to receive grants of €6,000 to help fund the installation of RVMs.
Razzaq concluded: “As we have seen in Scotland, unless a well thought out, workable scheme is brought forward, with meaningful consultation and financial support for retailers, any proposed DRS will fall at the first hurdle.”
Grants could also help cover anticipated startup costs, such as investment in machines, which will also hit businesses earlier. The £1.8bn figure does not include the costs of establishing a body to run the scheme.
Adding to the mounting costs of the scheme, the DRS was delayed in Scotland until 2025 earlier this year, which has left the industry ‘footing the bill for tens of millions in sunk costs’, said BRC.
The BRC added that current plans for DRS need to be rethought to prevent the introduction of an ‘unnecessarily complex and costly scheme’.