Deposit Return Scheme Impact on UK Brewers: Costs, Compliance and Key Risks

The UK’s proposed Deposit Return Scheme (DRS) – now expected to launch in October 2027 – is being presented as a significant step towards improving recycling rates and reducing waste. At its core, the model is straightforward: consumers pay a small deposit on drinks containers and reclaim it when the empty packaging is returned.

For brewers, particularly small and independent operators, the practical implications are far more complex. While the industry broadly supports the environmental ambition behind DRS, there are growing concerns about cost, logistics and day‑to‑day delivery.

This article explains how the UK Deposit Return Scheme will affect brewers in practice, including expected compliance obligations, cost pressures, and lessons from the failed Scottish scheme.

What is the Deposit Return Scheme?

The Deposit Return Scheme (DRS) is a UK recycling initiative that adds a refundable deposit to certain single‑use drinks containers, which consumers reclaim when containers are returned for recycling at a designated return point.

According to plans, this is expected to apply to:

Materials	Size	Use
– PET plastic – Aluminium – Steel Note that glass is excluded (except for single-use glass in Wales only) but containers with a lid made from other materials are still included.	Between 150ml and 3 litres	Single use or used for “a short period of time”

The policy aim is to reduce litter, increase collection rates and improve the quality of materials captured for recycling. UK guidance and parliamentary briefing material both frame the scheme as part of a wider push to improve recycling outcomes and support a circular economy.

For breweries, however, DRS is not just a consumer-facing recycling initiative. It is also a new compliance framework that changes how in-scope products are placed on the market and tracked through the supply chain.

The potential benefits to brewers

DRS is built on a clear and well‑intentioned foundation, encompassing environmental outcomes and circular economy goals.

• Improved recycling rates: Similar schemes across Europe have reported high collection rates, with some models targeting returns of up to 90 per cent.
• Reduced litter and environmental impact: Governments point to long‑term reductions in waste and associated emissions.
• Consumer engagement: The deposit model is designed to actively encourage recycling behaviour.

There may also be a reputational benefit for brewers. Sustainability increasingly influences purchasing decisions, and participation in a circular economy can support brand positioning, particularly within premium and craft markets.

The challenges to brewers

These benefits, however, come with material implications for brewers when it comes to cost, complexity and operational impact. The impact is significant, particularly for smaller businesses.

1. Increased financial pressure

DRS introduces several new layers of expense, including:

• Producer registration and ongoing compliance fees
• Changes to labelling and barcoding
• Cashflow tied up in deposits
• Potential investment in additional logistics or reverse supply chains

For smaller brewers, these costs are disproportionately felt. Evidence from Scotland suggests that, without exemptions or phased implementation, schemes of this nature can place serious pressure on smaller producers and, in some cases, threaten commercial viability.

2. Increased operational complexity

Across the brewing and wider drinks industry, there is a growing perception that the operational requirements of DRS are being underestimated.

DRS requires brewers to adapt their operations in fundamental ways, including:

• Tracking and reporting every eligible container
• Managing returns and reconciliation processes
• Navigating differing rules across UK nations

This is not a marginal adjustment. It represents a significant change to how packaged products move through the supply chain and how compliance is managed.

3. Impact on hospitality and distribution

The effect of DRS goes beyond the brewery. In hospitality settings, pubs and bars effectively become part of the logistics chain, with responsibility for storing empty containers and reclaiming deposits through collection systems.

For brewers supplying pubs, bars and wholesalers, this adds friction and administrative burden across the entire route to market, extending the impact of DRS well beyond production alone.

Lessons from Scotland’s Deposit Return Scheme

If government is seeking a practical case study for implementing DRS across the UK, Scotland provides a clear one.

The Scottish DRS, delivered by Circularity Scotland, was ultimately abandoned following repeated delays, regulatory challenges and sustained industry concern. Criticism focused on the scheme being:

• Overly complex and insufficiently prepared
• Misaligned with UK‑wide policy, particularly in relation to glass
• Financially high‑risk for participating businesses

The consequences were significant. Circularity Scotland entered administration, tens of millions of pounds were spent preparing for a scheme that never launched, and industry confidence was badly undermined. Alongside public expenditure, substantial private sector investment was also lost.

For many brewers, this experience reinforced a key concern: policy ambition was not matched by delivery capability.

How DRS can best support brewers’ needs going forward

If DRS is to work effectively across the UK, several principles are critical:

• Simplicity: the system must be easy to understand and operate for all stakeholders
• UK‑wide alignment: fragmentation increases cost and confusion
• Support for small brewers: thresholds or phased entry could help avoid disproportionate impact
• Realistic timelines: businesses need adequate time to adapt systems and processes

What brewers can do now to start preparing for DRS

DRS is still some time away from implementation, but with the legal framework taking shape and appointment of the UK Deposit Management Organisation, DRS is looking like a reality at some point. Breweries can take preparatory steps:

• Identify which products are likely to fall within scope, based on material, size and use.
• Review packaging and label requirements.
• Assess cashflow impact of DRS.
• Check how on-trade and off-trade sales may be treated.
• Communicate with wholesales, retailers and hospitality in terms of their plans and shared DRS responsibilities.
• Take early legal advice on compliance planning and contractual risk.

Should you wish to seek advice from Napthens, get in touch via the form and we’ll be happy to discuss in more detail. As the legal advisor of the Society of Independent Brewers, we offer a free consultation session to all SIBA members, so do make sure to take advantage of this.

Conclusion

Deposit Return Schemes are not inherently flawed. When well designed, they are a key tool for improving recycling rates and reducing waste.

For brewers, however, the concern is clear. Without careful design and effective implementation, DRS risks becoming another cost pressure in an industry that is already under strain.

The failure of the Scottish scheme should not be overlooked. It is a clear reminder that good intentions alone do not guarantee good outcomes. For the UK’s brewing sector, the question is no longer whether DRS will be introduced, but whether it can be delivered in a way that supports, rather than undermines, the businesses it depends on.

As DRS proposals evolve, early advice can help brewers understand their obligations and reduce risk. Our team advises businesses across the brewing and drinks sector on regulatory change and practical implementation. If you’d like to talk through what this could mean for you, explore our commercial services or get in touch today.

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