Glass deposit return scheme 'risks £300m fraud', industry warns

Plans to include glass in Wales's deposit return scheme (DRS) could drive up prices for consumers, according to a joint letter to the first minister from hospitality, retail and drinks bosses.

The letter said the move to include glass in Wales, which will not be adopted by other UK nations, risks additional costs in delivering the scheme and potentially up to £300m in cross-border fraud.

The coalition of industry organisations has also called for the Welsh government to urgently appoint an administrator for the scheme, warning Wales may otherwise miss the October 2027 launch date.

The Welsh government said laying regulations for Wales's DRS was a major step towards ending throwaway culture.

Under UK-wide plans, England, Scotland and Northern Ireland will introduce a DRS covering plastic bottles and metal cans from October 2027, with Wales following the same timetable.

The goal is to create a co-ordinated approach designed to cut litter, boost recycling rates and support a circular economy.

Industry groups say they have already invested more than £1bn to support the UK-wide rollout, which will include the introduction of reverse vending machines.

But Wales's decision to include glass has become a major fault line with industry representatives.

In the joint letter, seen by BBC Wales, organisations from the soft drinks, retail, hospitality, alcoholic drinks and bottled water sectors say they support a unified UK-wide scheme for collecting plastic bottles and aluminium cans but raise serious concerns about Wales's decision to include single-use glass.

The signatories point out that "an impressive 92% of household glass is already being recycled in Wales" and warn that including glass risks "disrupting existing successful recycling systems" and could undermine an approach that already works well.

The industry figures argue that glass-enabled reverse vending machines would dramatically increase costs and logistical pressures especially for small shops struggling with space.

Machines capable of taking glass are significantly more expensive and bulkier than those used for plastic bottles and cans.

The cost of implementing separate glass requirements in Wales - a market representing just 4.6% of UK drinks sales - would inevitably be passed on through higher fees and ultimately higher prices for consumers.

The joint letter to the first minister was signed by the heads of organisations representing 9,000 UK businesses, including:

• Andy Bagnall - British Soft Drinks Association
• David Harries - Food and Drink Federation Cymru
• Emma McClarkin - British Beer and Pub Association
• Helen Dickinson - British Retail Consortium
• Hetal Patel - The Federation of Independent Retailers
• Kinvara Carey - Natural Source Waters Association
• Kate Nicholls - UK Hospitality

The letter warns that if Wales does not appoint a scheme administrator "as soon as possible", the country may miss the October 2027 launch date planned across the UK.

It is a delay the industry claims risks "an annual fraud bill of up to £300m" if people exploit differences between the Welsh scheme and those operating in England, Scotland and Northern Ireland.

They say this danger arises "if an administrator is not appointed soon" and Wales is left without a functioning system when the rest of the UK goes live.

The Welsh government said: "Our scheme builds on our world class recycling system and draws from global best practice to tackle litter and begin the transition into reuse.

"Appointing the deposit management organisation is a key decision and we are following a rigorous, transparent process to ensure the scheme will deliver for Wales whilst supporting interoperability with the other UK schemes.

It added that the appointment process began in November with extensive industry engagement throughout."

Plaid Cymru has suggested a staged introduction, and that glass should be introduced when it becomes more practical, in line with the rest of the UK.

Party economy spokesman Luke Fletcher MS said: "Plaid Cymru understand the legitimate concerns of the sector, especially small Wales-based businesses, of having a different set of regulations in Wales compared with the rest of the UK.

"We believe that it's important to press ahead with a Deposit Return Scheme as soon as possible, and that the way to do this is to proceed with plastic and metal drinks initially, to reduce litter and drive higher rates of re-use and recycling."

The Liberal Democrats said the party opposed "divergence for no good reason" and said a "split" from the UK scheme risked harming Welsh businesses.

The Welsh Conservatives said they would "ensure alignment" between Wales and the rest of the UK on deposit return schemes "to avoid confusion, unnecessary costs, and ensure consistency for retailers and manufacturers."

Reform and the Green Party have also been asked to comment.