That was the topic under discussion at a round-table debate hosted by Independent Retail News and sister title Packaging News in London last month (March). The event was sponsored by manufacturer Britvic Soft Drinks, responsible in the UK for brands including Pepsi, Tango, 7Up and Drench.
Schemes under consideration across the country have focused their attention on the use of so-called reverse vending machines, or RVMs, which allow consumers to insert their used bottles or cans before getting back their deposit. Because such machines take up quite a bit of floor space (about the same footprint as an ATM machine), there have been suggestions smaller shops could instead take back containers over the counter if they are included in the scheme.
Manual returns
But Chris Noice, head of communications and research at the Association of Convenience Stores, said it was essential that a well-designed system does not force small retailers to take back containers manually. He said: “Our members are telling us there are a number of issues around manual returns – firstly, the potential health and safety and hygiene issues. These are retailers that are already having massive problems with environmental health officers because they are trying to do more food-to-go. Just handling cash and food-to-go is a problem, so having cash and food, and then potentially dirty bottles too, is a real issue.”
There were also concerns around the time needed to take back containers over the counter, especially in a small, one-till store. “For a business that’s supposed to be conv
enient, that becomes pretty inconvenient, pretty quickly,” Noice said. A further worry was that manual returns could create conflict if customers are trying to bring back dirty or ineligible containers. “For retailers and their staff, any additional flashpoints, any additional cause for verbal abuse is a real problem, so taking the interaction out of the process is probably the safest and most consistent way of doing it, especially in small stores.”
Retailer Dennis Williams, who is testing out an RVM at his 1,700sq ft Premier convenience store in Edinburgh, agreed that taking back returns by hand would be “quite a tough call”, especially as he offers Hermes parcel collection and already has limited space both behind the counter and at the back of the shop. His machine is taking some 180 to 200 containers a day, about 60% of them cans and 40% plastic.
Unintended consequences
And while, in overall terms, Williams favours the introduction of a DRS, he has also seen several unintended consequences during the first six weeks of the trial. “When we first started off, it was getting abused, big time,” he said. Issues included an alcoholic who was collecting empty bottles from a local park and then wanting to spend his redeemed vouchers on alcohol, while local school children were trying to buy sweets, crisps and sugary drinks with their vouchers. “That’s a worrying factor,” Williams said, particularly given concerns around childhood obesity. “I’m excited about this scheme and I hope that going forward, it really works, but that doesn’t sit right with me.” The store has now limited customers to returning 10 items at a time, with the maximum voucher value they can redeem pegged at £1.
But Richard McIlwain, deputy chief executive of Keep Britain Tidy, said there was a danger of getting side-tracked. “There is a very good, valid reason why a DRS works, and some of the issues associated with homelessness, alcoholism and the ability for children to buy sweets are beyond the remit of a DRS. They are bigger societal issues.” In any case, if a DRS was successful in cutting litter to a minimum, there would be fewer containers lying around for people to collect. Truls Haug, managing director of reverse vending specialist Tomra Collection, asked whether retailers thought under-18s should be banned from taking back containers. Noice said: “No, but for a retailer that’s supposed to be trading responsibly and in a community where they know the parents, that’s a decision they are going to have to make.” A further downside, said Williams, was that if containers had been not emptied properly, you ended up with spills on the floor. “We wipe it right away, because it’s sticky.”
Positive outcomes
But there were also a number of upsides to the trial, he added. The store has worked closely with its local primary school to educate pupils about the scheme, which has helped raise the profile of the business within the community. “Working with the school has been fantastic,” said Williams. The scheme has also boosted the store’s environmental credentials and helped create a “feelgood factor”. He added: “I think it’s brought in some new customers, so that’s been good, and it’s also an opportunity to raise money for good causes. The machine is compact, it’s clean, it’s reliable, and the other thing is, it does reduce litter. There’s not an empty plastic bottle near my shop now; every one has been lifted.”
One of the key reasons for introducing a DRS alongside existing kerbside schemes is that recycling rates for packaging of products consumed on-the-go are far lower than for those consumed at home. Therefore, it is essential that RVMs are sited in convenient locations, such as c-stores, said Jane Bevis, chair of not-for-profit company OPRL, which oversees the UK’s on-pack recycling labels. “It’s not about putting it in a supermarket car park where people go once a week. You want to put something at the exact point that someone stops consuming the product.
“Consumers won’t walk more than about 50 metres to put something in a bin. If the facility isn’t right there where they want to dispose of it, it’s not going to work.”
She added: “I live in a community in south London where 68% of people do not have access to a car. For those people, being able to take it to their local corner shop where they do their shopping will be the key.” But she also pointed out that if there were lots of c-stores in a small area, collecting returns from all of them might not be practical, or very environmentally friendly.
Perfect location
Haug said Williams’ store was the perfect location for a DRS and argued the shop would lose out to multiple competitors if it failed to take part. “I think it’s extremely important for Dennis to offer this service,” he said. “You will reduce the turnover in the convenience sector if you force them to do their shopping in another location.” But Noice said it was important small stores are not forced to take part. “In a well-designed system, you could absolutely have stores that take the decision they are in an area that would be able to support returns and that can fit in an RVM, and there are some quite small machines out there that can do this. Those retailers should absolutely be able to be part of the scheme. Where we’re concerned is where there’s mandating of stores for everyone to be involved. There will be a lot of stores where it’s just not right for them and you can’t expect those stores to put significant investment into a RVM or a manual system. But we absolutely would be in favour of strategic RVMs in small stores and we could see that would work.” Williams agreed. “It should be optional, definitely,” he said.
With Scotland having recently created an expert advisory group to thrash out the practical details of DRS and the consultation for England, Wales and Northern Ireland still under way, it is still far from clear what shape any future scheme would take. Unanswered questions include the size of the deposit, which materials and pack sizes will be included, and who will pay for the scheme.
The level of deposit being talked about in the UK ranges from 10p to 20p, but McIlwain said: “You need to be going for the upper end of that if you want to incentivise people. So 15p or 20p feels like the sort of level that would make a difference. I’d worry that something like 10p may be low enough for people to see past it.” Larissa Tabacaru, commercial manager at recycling company Viridor, said: “If we decide on something like 10p and there’s no consumer engagement, then the system fails.” Haug said the country with the highest recycling rate via a DRS was Germany, which has imposed a 25 euro cent charge, but he thought that was too high. “It should be at aW level where it’s not a hurdle.”
Multi-pack confusion
Noice said retailers were concerned there would be a disincentive for people to purchase drinks if they were faced with a big additional out-of-pocket price. A 12-can multi-pack, for example, would attract an additional upfront charge of £2.40 if the deposit was 20p per item. “Given that by and large multi-packs are not consumed on-the-go, they should probably be covered by the kerbside system,” he said. McIlwain thought multi-packs should be included, in order to keep the system as simple as possible. “If you have some bottles without deposits and some with deposits, you very quickly end up with people getting confused.”
A further question is whether bottles over a certain size, such as 750ml, should be excluded, as these are also most often consumed at home. But McIlwain said unpublished data from Keep Britain Tidy showed between 13% and 15% of plastic bottles found in a litter survey of 7,200 sites were over a litre, suggesting these should be included if one of the aims is to reduce littering. James Piper, chief executive at recycling specialist Ecosurety, said that by excluding larger sizes, there was a risk unscrupulous manufacturers could simply create bottles slightly above the maximum size, say 752ml, in order to slip below the deposit threshold. “We have seen that in other counties,” he said.
Another key question is which materials should be included. Rick Hindley, executive director at aluminium packaging specialist Alupro, said: “We believe all materials need to be in – so glass needs to be included, cans and plastic, possibly even Tetra Pak”. Trystan Farnworth, director of sustainability at Britvic, said: “We are in favour of a broad range rather than a narrow range of containers. That’s our general principle and there are clearly some choices as to where we draw that line. But broadly, in the spirit of standardisation, that’s the right thing to do.”
Financial model
Also unknown is the question of who will pay for the scheme. A number of different models exist around the world, some run by government, some by commercial and non-commercial bodies, some by manufacturers. Haug at Tomra said: “In a deposit system, it’s usually the producers that pay and then the stores get a handling fee, based on the investment in time for the person in the store to handle it and the space you put aside to facilitate the take-back.” He said it was vital that small stores lobbied to make sure they were paid an appropriate fee, as it would cost them three to four times more to implement, per container, than it would a large multiple supermarket.
Haug said figures that have been quoted of an RVM for a small store costing up to £32,000 were “ridiculously high” and that small compacting machines were available for £11,000 to £12,000. There were also financial models in which there were no upfront costs for the retailer in buying RVMs. Said Noice: “We’ve heard all possible options. One thing I would say is that if the idea is that broadly it’s going to be cost-neutral, you have to factor in that if it is an RVM, that space in the store is then something you are not making margin on. You are then making a sacrifice on that amount of space. That does have to be taken into account, because for retailers, if it’s not going to make money, then they are probably not going to do it.” Williams agreed. “Trade in our sector is harder now than it’s ever been. We’ve got rising costs all the time. It’s tough out there. We don’t need any more costs in our business.”
McIlwain argued: “The point of a well-designed DRS is it’s not about pushing costs on to the retail sector. It’s about adequately compensating you – in fact, giving you a guaranteed income for that floor space that you are giving up to host an RVM, in addition to the additional footfall that comes into shops to redeem bottles. A scheme that’s well designed should not be seen as an imposition on retailers, it should be seen as a benefit.”
Consistent message
What everyone around the table agreed on was that a successful DRS needed to be easy for consumers to understand and there had to be clear and consistent messages to help educate the public about how it works and the reasons behind it. Said Farnworth: “Whatever we do has to be about making it easier for the consumer. We need to make it as easy as watching TV. Ultimately, for the scheme to be truly sustainable, it’s about increasing the quality and quantity of what we collect. Making it easy for the consumer will generate more and betterquality returns and it will get better over time.”
They also agreed any scheme needed to be the same across the UK. Noice said: “Consistency of schemes across England, Wales and Scotland is vital. Having schemes that come in at the same time, that have the same parameters, is extremely important.” Farnworth said: “The key consideration would be complete standardisation across the board geographically. The more you fragment, the less effective it will be.”
Sponsor’s comment – by Trystan Farnworth, director of sustainability, Britvic Soft Drinks
❝Britvic is supportive of a full-scale, well-designed deposit return scheme (DRS) for PET and metal-can beverage containers of all sizes. The key phrase here is ‘well-designed’.
In simple terms, this means: a GB-wide scheme, rather than separate schemes by region; a mandatory, rather than optional, scheme for all in-scope drinks manufacturers and retailers; managed by an industry-run body and run on a not-for-profit basis. Everything has to be in service of creating a more circular economy, improving the quantity and quality of recycling by consumers to enable drinks manufacturers to use more recycled material. We also want to see a DRS scheme that keeps the very specific needs and complexities of the convenience sector in mind.
It was encouraging to hear there was broad alignment with our principles from a number of key industry bodies around the table. We heard that everyone has to buy into DRS for it to work.
“It was also fascinating to hear from Dennis Williams. While he is not operating a full DRS scheme, he has trialled one of the ways in which DRS could work at the retail coalface – through a reverse vending machine that rewards shoppers for recycling cans and bottles. Shopper feedback was generally positive and it was interesting to get an understanding of the challenges and practicalities independent retailers will face. It is important that the whole industry takes these learnings and uses them effectively to lobby government to make sure the final scheme is genuinely well-designed. A good solution is possible – but there is a huge amount of work ahead to make sure this happens.❞