From October 2027, England and Northern Ireland will enforce a mandatory deposit return scheme for drinks containers. This marks a significant shift in environmental regulation – one that will reshape how manufacturers, retailers and hospitality businesses operate. In this article we unpack what’s changing, who’s affected, and how businesses can stay ahead.

Published 21 March 2025

What are the basic requirements?

The Deposit Scheme for Drinks Containers (England and Northern Ireland) Regulations 2025 came into force on 24 January 2025. They create a deposit scheme for ‘container drinks’ (drinks in securely closed containers) that are supplied in England or Northern Ireland. The scheme will launch on 1 October 2027.

Any person who buys a container drink must pay a deposit to the person who supplies them with that container (which must be marked with a logo and return code to allow for easier identification). Any person who returns an empty container to a collector (normally a retailer) will be entitled to a refund.

Manufacturers and importers of container drinks and persons filling container drinks to order (known as ‘scheme producers’ must register with the scheme administrator (to be known as the ‘Deposit Management Organisation’ or ‘DMO’). The government is aiming to appoint the DMO in April 2025. Registered scheme producers must pay the DMO a deposit for each in-scope item which the scheme producer supplies to any person.

Retailers will be prohibited from selling to consumers in-scope items that have not been produced by a registered scheme producer that are marked with the appropriate logo and return code. They must charge a refundable deposit (to be set by the DMO) on all in-scope items. The deposit must be clearly indicated on the product labelling and included in the price charged to consumers.

Groceries retailers (with some exceptions) must also operate return points for consumers to return used containers and pay them a refund. Return points can be manual or automated using a reverse vending machine. Refunds can be paid as cash, a payment to a credit or debit card, or a voucher. Returned containers must be kept for collection by the DMO, which must pay the retailer an amount equal to the total of the amount of refunds paid by the retailer in respect of those containers, plus a handling fee. The DMO must then ensure that the collected containers are recycled.

What types of container does the scheme apply to?

The scheme applies to single-use closed bottles and cans with a capacity between 150 millilitres and 3 litres made from:

• Polythylene terephthalate (PET);

• Plastic;

• Steel; and

• aluminium.

Containers made from glass, high-density polyethylene (HDPE), such as milk bottles, and those used for liquid medicines or flavour enhancers are excluded.

What information do retailers have to give customers about the scheme?

Retailers must provide or display information clearly and accessibly at any premises where in-scope container drinks are displayed or offered for supply, including:

• A statement that the retailer is required to charge a deposit for each in-scope item supplied;

• For each in-scope item displayed or offered for supply:

• The amount payable for the item, excluding the deposit;

• The deposit level; and

• The amount payable for the item, including the deposit; and

• A statement on how a person can obtain a refund for any in-scope item supplied to them.

Retailers do not, however, need to duplicate in the information they provide or display about the scheme any selling price or unit price they are required to indicate under the Price Marking Order 2004.

Can a retailer refuse to pay a refund?

Yes, if it has a ‘reasonable excuse’ not to accept a returnable item. Examples of a ‘reasonable excuse’ include:

• It cannot identify the item as a returnable item (including where it has no scheme logo or return code);

• The item is soiled;

• The item is not empty;

• The item is not intact;

• The item is a container for a drink which the retailer does not or would not supply for reasons of faith or belief;

• The person is attempting to return a number of returnable items which is disproportionately greater than the average number of items that the retailer would supply to a consumer in a single transaction.

Are there any exemptions under the scheme?

There are some specific exemptions available to mitigate the scheme’s impact, particularly for small businesses.

• Producers with fewer than 6,250 containers in a product line in the first year of the scheme or 5,000 containers in a product line in subsequent years can register the products in those product lines as ‘low volume products’. There is then no requirement for retailers to charge a deposit on them and refund the deposit if the empty container is returned to them at a return point.

• Groceries retailers in urban areas with a retail space of less than 100m2 are exempt from the requirement to provide a return point (but can still apply to the DMO to operate one voluntarily).

• Businesses such as cafés, restaurants and pubs that sell drinks for immediate consumption on the premises can choose not to charge the deposit at the point of sale but must collect and store the drinks containers for collection by the DMO, which will refund the deposit. If they also sell drinks to take away, they can choose to apply the deposit only to drinks sold to take away.

How will the scheme be enforced?

In England the enforcement of the scheme will be split between the Environment Agency and local authority trading standards. The Environment Agency will enforce provisions such as the requirement for manufacturers and importers of container drinks to register with the DMO, while local authority trading standards will enforce provisions such as the requirement for in-scope container drinks to carry the scheme logo and a return code, and the requirement for retailers to charge a deposit.

In Northern Ireland the scheme will be enforced by the Northern Ireland Environment Agency.

The scheme will be enforced primarily through civil sanctions comprising fixed monetary penalties (£500 or £1,000, depending on the breach), variable monetary penalties, compliance notices and enforcement undertakings. Enforcing authorities can also recover their administrative and investigation costs incurred in issuing a variable monetary penalty or compliance notice.

Additionally, obstructing an enforcing authority or breaching a civil sanction (for example, failing to comply with a compliance notice) is a criminal offence, carrying a maximum penalty of an unlimited fine. Directors and senior managers of organisations including companies, partnerships and unincorporated associations should be aware that they can also be personally liable for an offence committed by their organisation if the offence is committed with their consent or connivance, or as a result of their neglect.