This article was updated in September 2026 to reflect the latest developments relating to Deposit Return Schemes across the UK.
A Deposit Return Scheme (DRS) is a recycling system where a small, refundable deposit is added to the price of beverage containers when they are purchased. Consumers get this deposit back when they return the empty, undamaged container to a designated collection point or reverse vending machine. DRS will introduce fundamental changes to how drinks are priced, labelled and sold with the aim of dramatically increasing recycling rates. For manufacturers, importers and retailers, the schemes bring new regulatory obligations and operational costs that will require early planning. Differing schemes across the UK, as well as the EU, will add further complexity.
England & Northern Ireland
A joint DRS for England and Northern Ireland is due to launch in October 2027. It will apply to plastic bottles and metal cans between 150ml and 3 litres. Glass is excluded.
Drinks manufacturers, brand owners, importers and retailers placing in-scope products on the market will be required to comply with the scheme and its requirements, including registering with the scheme administrator, Exchange for Change, the Deposit Management Organisation (DMO).
Although deposits are refundable to consumers, they have significant commercial implications. Pricing structures, invoicing systems, VAT treatment and supply-chain contracts will all need to be reviewed and likely updated to deal with this.
The deposit is expected to be 20p per container.
Wales: Boteli Gwydyr
Recognised as second only to Austria in global recycling rankings, Wales is developing its own Deposit Return Scheme, which will run alongside, but separately from, the other schemes operating across the UK.
The biggest difference is that Wales intends to include boteli gwydyr, also known as glass bottles, in its scheme.
While glass bottles will form part of the Welsh scheme, the deposit is not expected to be applied to glass containers until October 2031 as part of the phased implementation approach.
This divergence means it’s possible that businesses operating and/or selling in England and Wales may face different labelling, reporting and operational requirements for the same products. Businesses should therefore expect additional complexity and compliance risk, and will need to plan accordingly.
Scotland
Scotland is expected to align with the rest of the UK and launch its DRS in October 2027. Whilst a Scottish scheme is expected to mirror the England & Northern Ireland scheme, businesses operating in Scotland should continue to monitor developments closely.
The EU
Many EU countries already operate mature DRS. However, by 1 January 2029, all EU Member States are required to establish a DRS for single-use plastic beverage bottles and metal beverage containers (up to 3 litres) according to the EU Packaging and Packaging Waste Regulation 2025. UK businesses exporting to the EU must therefore manage DRS compliance on a market-by-market basis, adding another layer of regulatory divergence.
What this means for drinks businesses
Deposit Return Schemes are not just an environmental issue. They affect margins, cash flow, packaging design, logistics, IT systems, VAT liability and contractual relationships throughout the supply chain. Businesses that prepare early will be better placed to manage cost, avoid disruption and remain compliant across multiple jurisdictions.
It’s likely that drinks manufacturers and importers will be required to:
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register with the Deposit Management Organisation (DMO), Exchange for Change;
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report volumes of in-scope containers placed on the market;
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apply the statutory deposit to products;
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ensure compliant DRS labelling and markings; and
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pay producer fees to fund the operation of the scheme.
Retailers will be expected to:
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charge the deposit at point of sale;
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accept returns (subject to limited exemptions); and
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refund deposits to consumers.
VAT and deposits
Deposits are not currently expected to be treated as consideration for VAT at the point of sale. Instead, VAT is expected to be accounted for only on deposits that are not reclaimed, with Exchange for Change expected to be liable for such VAT.
While this should simplify matters for manufacturers, distributors, and retailers, businesses will still need to review their accounting processes, invoicing systems and contractual arrangements to ensure they are prepared for implementation.
How we can help
We can advise drinks manufacturers, retailers and their supply chain on DRS readiness. This includes support with commercial contracts, regulatory compliance, supply-chain arrangements and preparation for the scheme’s operational requirements. If you would like to discuss how Deposit Return Schemes will affect your business, please get in touch.