Ireland’s Deposit Return Scheme: Potential implications for the UK market

A major industry shift in Ireland

One of the most significant changes in the FMCG industry in Ireland is the introduction of the Deposit Return Scheme (DRS). This initiative aims to increase recycling rates, reduce litter, and support a circular economy. The impact on FMCG manufacturers operating in these markets is substantial.

What is the Deposit Return Scheme?

The DRS requires consumers to pay a small deposit on drink containers, which they can reclaim upon returning the empty container to a collection point. The scheme applies to plastic bottles and aluminium cans in Ireland, Scotland, and England (plus will also be applied to glass bottles in Wales).

• Ireland’s DRS launched in February 2024.
• Scotland, England and Northern Ireland will implement their schemes in 2027.
• Wales has delayed its scheme, and now also aims to implement it in 2027

The Republic of Ireland deposit costs

The deposit fee varies depending on container size:

• 150ml to 500ml: €0.15 deposit
• Over 500ml to 3L: €0.25 deposit

Republic of Ireland retailer compensation

Retailers receive a ‘handling fee’ to ensure the DRS remains cost-neutral. This fee covers the cost of accepting and sorting returned containers. The handling fee remains the same for plastic bottles and cans but varies depending on whether containers are collected manually or via a reverse vending machine.

Potential challenges for UK manufacturers

According to an article in The Guardian (Oct 2024): 

“After initial consumer confusion and irritation, Ireland’s first ever deposit return scheme for plastic bottles and cans has finally been embraced by the public”. 

Ciaran Foley, Chief Executive of Re-Run - the company tasked with implementing the scheme in Ireland - was quoted: 

“Ultimately, it’s a pretty easy way for people feeling good about themselves, because a lot of people do want to recycle, to do the right thing for the planet”. 

Speaking about the challenges the UK could face in implementing the scheme, Foley said the challenges should not be underestimated: 

“When we went live, we got lots of resistance from the public. Social media can be brutal. There were issues with the machines: retailers were taking time to get used to them so bins were filling up and were not being changed quickly enough. The public were also complaining they already had a perfectly good recycling scheme with their bins.”

Operational changes & cost pressures:

• Labelling & packaging adjustments: New labelling requirements introduce additional design, printing, and production costs.
• Deposit costs & cash flow implications: Brands and retailers may front the deposit cost, creating cash flow challenges, especially for high-volume producers.
• Reverse logistics complexity: Managing container returns will likely require investment in infrastructure and partnerships.

Retail & eCommerce disruptions:

• On-shelf pricing & consumer perception: Displaying pricing with and without the deposit may confuse consumers and influence purchasing behavior.
• Retailer readiness: Retailers must efficiently manage high return volumes, which remains uncertain.

Regulatory & compliance changes:

• Multi-market complexity: Brands will need to navigate different implementation timelines, deposit levels, and compliance regulations across Ireland, Scotland, and the UK.
• Reporting & auditing: FMCG brands may need to track deposit flows and comply with regulatory requirements, increasing administrative burdens.

Potential DRS pricing implications: What have we seen in Ireland

We analysed average daily shelf prices (without the deposit cost) for 500ml, 1L, and multipack containers from February 1, 2024 (scheme introduction) to 31st March 2025:

Chart 1: 500ml bottle size: Prices increased by an average of 4.4%

Chart 2: 1L bottle size: Prices increased by an average of 9.9%.

Chart 3: 4x330ml multipacks: Prices increased by 9.9%

Chart 4: 12x330ml multipacks: Prices decreased by -4.3%

Despite the additional deposit cost, the average daily price of 500ml, 1 litre, and 4x300ml containers has increased since the introduction of the scheme. With the expectation of 12x330ml multipacks. 

This decrease in average daily price of 12x330ml multipacks may be because the deposit cost for a multipack is much more considerable, and potentially retailers are keeping price inflation to a minimum in order to limit the impact on the consumer.

As an example, to purchase Coca-Cola Zero 12x300ml sold in Tesco Ireland, customers can expect to pay an additional €1.80 (€0.15 for every can in the multipack).

Other potential UK market implications

Potential consumer preference shift to multipacks:

• Per-unit deposit fees might make single bottles appear more expensive upfront.
• Consumers may opt for multipacks to reduce the perceived cost per liter.
• Retailers and brands may respond by discounting multipacks to sustain volume sales.

Retailer promotions & price adjustments:

• Brands and retailers may absorb part of the deposit to stay competitive in high-competition categories.

Operational costs & supply chain adjustments:

• Increased compliance and logistics costs could lead to higher prices for single large bottles.
• Multipacks may continue to benefit from greater efficiency in logistics and cost absorption

Consumer perceived value:

• Consumers may find cans more convenient and easier to return than large bottles.
• Retailers may likely keep multipacks competitively priced while allowing bottled formats to increase in cost.

For deeper insight into pricing, promotion, and assortment changes seen in Ireland since the launch of DRS, contact