Executives from some of the UK’s biggest drink and supermarket firms have written to First Minister Rhun ap Iorwerth warning that his government's policy could mean higher prices, reduced consumer choice and increasing uncertainty for businesses. The retail chiefs from Sainsbury, Coca-Cola and the Co-op are urging the Welsh Government not to pursue a different type of scheme to encourage recycling of empty bottles and cans, known as a deposit return scheme (DRS).
DRS launch and alignment across the UK
The DRS scheme is due to launch October 1, 2027, and will see customers pay a 20p refundable deposit when buying single-use plastic bottles, steel and aluminium cans. People will get the 20p back when they return the clean, uncrushed container to an approved return point. England, Scotland and Northern Ireland are all adopting aligned schemes with Exchange for Change having been appointed in May 2025 to operate the return scheme in all three nations. The schemes across the UK are designed to reduce litter and increase recycling rates.
The Welsh Government has yet to confirm an administrator to run its DRS as the Plaid Cymru government has indicated that it wants to add glass bottles to the scheme when it becomes feasible to do so.
Signatories urge appointment of Exchange for Change
Signatories to the letter include general manager of Coca-Cola in the UK, An Vermeulen, chief executive of Tesco Ashwin Prasad, chief executive of Sainsbury’s Simon Roberts, chief executive of Carlsberg Britvic, Paul Davies, chief executive of the Co-operative Group Kate Allum and chief executive of AG Barr Euan Sutherland. In the letter to the First Minister the executives argue that appointing Exchange for Change is the only realistic route to delivering a DRS in Wales on time while also creating interoperability benefits between the four nations.
They write: “Our businesses are looking forward to working closely with you and your government across a wide range of areas, including the urgent issue of the Welsh Deposit Return Scheme . We recognise that your government has inherited significant delays to the process of appointing a scheme administrator from the previous administration. It rejected the industry-backed bid by Exchange for Change to run the Welsh scheme, despite its application containing a pragmatic compromise on glass and complying with the regulations. We welcome your government’s recent constructive engagement with industry and Exchange for Change to find a way forward, building on your manifesto commitment to include glass only when it becomes practically feasible.
“There is now less than fifteen months until the scheme’s legislated launch date in October 2027. Based on our experience with other schemes and the preparation they require, the only realistic option for staying on schedule in Wales is appointing Exchange for Change and working with them to deliver a scheme. Unless this happens by the end of July, commercial and operational realities that our businesses have to respond to will create negative economic outcomes for Welsh consumers, reducing choice and increasing the costs of products on shelves.”
Cost implications of including glass
Any retailer selling in-scope drinks containers would be required to set up a collection and payment system. Many will use RVMs (reverse vending machines) in store, which read barcodes as bottles are inserted and provide a receipt or returns, which are then paid at the counter. The initial cost of the RVMs would be borne by the supermarket or convenience store. Standard RVMs cost around £15,000 per unit, but the soft-drop RVMs required to collect glass in Wales could cost £30,000.
They add: “We share your ambition for a DRS that builds on Wales’ world-leading rates of recycling. Alongside wider industry, our businesses are investing over £1bn establishing DRS (across the UK by next year) which, if aligned across the four nations, could halve litter and push recycling rates above 90%. We remain committed to working with your government and officials at pace on appointing Exchange for Change to deliver a scheme that works for the people of Wales as part of a DRS aligned across the UK.”
The industry has previously raised concerns that requiring full-scale glass collection at every return point from day one in Wales could add around 50p to the cost of every drink sold in a glass bottle. There is also concern that, if a functioning return network is not ready in time, Welsh consumers could be required to pay deposits on eligible containers without a practical way of getting that money back.
Industry calls for urgent action
A spokesperson for Coca-Cola Europacific Partners, said: “A well-run DRS reduces litter, boost recycling rates, reduce carbon emissions and create a cleaner environment for communities – every week without a scheme administrator for the proposed Welsh scheme makes delivering those benefits more challenging. Businesses want to focus on building a scheme that genuinely serves Welsh consumers and the environment. Therefore we respectfully encourage the Welsh Government to move forward appointing a scheme administrator before recess.”
A spokesperson for The Co-operative Group, said: “Action to protect the environment is a consistent priority for Co-op members, and we have long welcomed a Deposit Return Scheme that increases recycling rates and decreases litter. We want to see accelerated progress towards a more circular economy, to protect the range and cost of drinks available to consumers, and to continue to serve communities through our stores right across Wales – all of which can only be achieved if the Welsh Government moves with pace and pragmatism to appoint Exchange for Change without any further delay.”
Andy Bagnall, director general, British Soft Drinks Association, said: “Industry has a lot of sympathy with the new Welsh Government which has inherited the delays to the Welsh DRS from its predecessor. There is still time to deliver a scheme that works for shoppers, businesses and retailers alike, but that window is closing rapidly. Appointing Exchange for Change offers the quickest and most practical route to delivering the scheme on time and alongside the rest of the UK. That also means taking a pragmatic approach to including glass in the Welsh scheme and not repeating the mistakes of the previous administration by trying to include full scale glass collection on day one, which is simply unaffordable for Welsh businesses and consumers.”
The Welsh Government were asked to provide an update on the procurement process. It was also asked if Exchange for Change isn’t appointed whether it would seek to implement and fund its own DRS. It has been estimated that running its own scheme could cost £100m.
A Welsh Government spokesman said: “We are working at pace on a formal process to appoint a deposit management organisation which will be concluded soon. It would be inappropriate to prejudge the outcome of this process.”
