A recycled mistake

The philosopher George Santayana is reputed to have said “Those who fail to learn from history are doomed to repeat it”. And it looks like the Welsh government are planning to test out this maxim in following the example of their Scottish counterparts in trying to go it alone with a recycling scheme for drinks containers.

Last year, the Westminster government gave the go-ahead to the Scottish proposals for a Deposit Return Scheme (DRS), but only on the condition that they excluded glass, confining it to cans and plastic bottles. Rather than proceed with a modified scheme, the Scottish government in something of a fit of pique decided to scrap the whole thing so they would have to await the implementation of a UK-wide scheme later in the decade. I wrote about this here.

The UK government wanted glass removed from the scheme because of internal market concerns. It would in effect create a trade barrier between two parts of the same country, which would be bad for both businesses and consumers. Some of the respondents to my post seemed to fail to grasp this point, but every business operating the scheme would have had to introduce Scotland-specific packaging, so that deposits could only be reclaimed on containers that had paid it in the first place, pay a fee to register for the scheme, and potentially be subject to fines if an insufficient proportion of their containers were returned.

Not surprisingly, many smaller businesses decided that the cost and bureaucracy would not be worth it if they were only selling small quantities in Scotland in the first place. This would have especially affected small producers of alcoholic drinks. We could potentially have ended up with the ridiculous situation of small Scottish brewers refusing to supply Scotland, while being happy to sell beer in the rest of the UK.

Glass already had a much better recycling rate than cans and plastic bottles, and was also the medium overwhelmingly used by smaller producers, so it made a lot of sense to exclude it. Mass-market producers of beers and soft drinks, who used cans and plastic bottles, would have found it much easier and more worthwhile to come within the scheme.

The UK government have committed to introducing a UK-wide deposit return scheme from 2027, which would exclude glass. However, the Welsh government have indicated that they intend to opt out from this and introduce their own scheme that would include glass. So we are likely to see exactly the same issues of smaller producers refusing to supply Wales, and Welsh brewers deciding it is not worthwhile to sell in their home country. Wales only accounts for 5% of the total UK population, so many producers will conclude it isn’t worth the effort and expense. The range of packaged alcoholic drinks available to Welsh consumers will be drastically reduced. In contrast, the UK as a whole, with a population of 68 million, is a market worth making specific provision for.

UK Hospitality have expressed their serious concerns about the plan, and there must be a strong possibility that the story will play out the same way, and the UK government will ultimately refuse to approve the Welsh scheme because of single market concerns. But, of course, after the Senedd elections in 2026, the Welsh political landscape may look very different...

Note that this is not about the desirability of a DRS in principle, but the practicalities of how this particular scheme would actually work and its effect on the markets that it would cover.