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After years of consultation, delay and debate, the UK government has officially confirmed that a deposit return scheme (DRS) will launch in England and Northern Ireland on 1 October 2027.

Set to transform how single-use drinks containers are bought, returned and recycled, the scheme has major implications for food and beverage manufacturers – impacting everything from labelling and logistics to retail partnerships and cost structures.

So, what exactly is changing, and how can businesses get ahead of the curve?

How it works

At its core, the DRS is simple: consumers will pay a small deposit (expected to be around 20p) when they purchase a drink in a plastic bottle or metal can. They will get that deposit back when they return the empty container to a designated return point – either manually in-store or via a reverse vending machine (RVM).

But behind the scenes, the scheme’s rollout is anything but straightforward.

The government has confirmed that the scheme will apply to PET plastic bottles and aluminium or steel cans between 150ml and 3l. Glass bottles, controversially, are excluded from the England and Northern Ireland rollout – a move that diverges from Scotland’s shelved DRS plans and has prompted backlash from environmental campaigners and some drinks producers.

All in-scope drinks must carry a DRS-specific label and be sold only by registered producers. Retailers will also be responsible for setting up return points or applying for exemptions.

What this means for F&B manufacturers

For food and beverage companies, the DRS represents a fundamental shift in packaging, pricing and accountability. Here are a few considerations:

1. It is time to redesign

From product labelling to invoice systems, manufacturers will need to overhaul operational processes to comply with the scheme. Only containers marked with an official DRS logo will be allowed on the market, meaning packaging lines and labelling software must be updated accordingly.

This poses a particular challenge for small- to medium-sized producers who may not have the infrastructure or budget for large-scale packaging overhauls.

2. New costs on the horizon

While the deposit will be paid by consumers and returned to them, the administrative costs will not disappear so easily. Manufacturers will be expected to contribute to the scheme’s operational costs – covering everything from material handling to data reporting.

Retailers installing RVMs could face upfront costs of £30,000 or more per machine, with further expenses for maintenance, space allocation and staff training. While this burden will not fall entirely on producers, it will inevitably feed back into pricing and distribution negotiations.

3. Changing how drinks are sold and returned

The introduction of return logistics marks a new layer of complexity in the supply chain. Collaboration with retail partners will become even more crucial, especially for brands that rely on convenience or impulse channels. Smaller stores may apply for exemptions, but larger retailers will be required to manage container returns on-site.

This could impact product placement, promotional strategies and even which formats are stocked where. Producers using harder-to-recycle formats may find their shelf presence diminishing in favour of DRS-friendly packaging.

4. Different rules for different sectors

For drinks consumed on premises – think pubs, cafes or restaurants – businesses will not need to charge a deposit or provide a return point. However, those selling takeaway drinks will be subject to the same rules as retailers.

Online and direct-to-consumer sellers, meanwhile, will need to plan for the additional headache of managing returns remotely – a logistics challenge that has yet to be clearly resolved by government or industry bodies.

A window of opportunity?

Despite its challenges, the DRS could also be an opportunity for brands to double down on sustainability credentials. With consumers increasingly aware of packaging waste and circularity, early adoption and clear communication could boost brand perception.

The scheme also promises to improve the quality of recycling in the UK. By collecting cleaner, uncontaminated materials through a controlled system, the DRS could help tackle the shortfall in high-grade recyclables that manufacturers depend on for new packaging.

The Deposit Management Organisation (DMO) – the body that will run the scheme – has officially been announced as the operator of the new £1.13 billion DRS for single-use plastic and metal drinks containers in England, Northern Ireland and Scotland.

The British Retail Consortium (BRC), a key stakeholder in the DMO’s creation, welcomed the news. “A well-designed DRS, with retail at its heart, will be an important contribution to delivering a circular economy in the UK,” said Andrew Opie, BRC director of food and sustainability.

“Retailers and the BRC have been central to the DMO’s development, committing significant funding, time and resource to get to this point… We look forward to engaging with them and the government to ensure that DRS makes a meaningful difference to recycling across the UK.”

The statement continued: "Our work is already underway, and we’ll be working closely with governments, businesses of all sizes, environmental groups and consumer bodies to move forward as quickly as possible.”

Other industry leaders have backed the scheme. British Soft Drinks Association director general, Gavin Partington, welcomed the government’s appointment of UK DMO as scheme administrator for its DRS.

Partington said: "This appointment marks a key milestone in realising the opportunities of a more circular economy, driving £1.13 billion of industry investment over the next three years and creating more than 4,000 jobs across England, Scotland and Northern Ireland. The British soft drinks industry looks forward to playing our part in ensuring successful delivery of a DRS by October 2027.”

Meanwhile, Elise Seibold, COO at Suntory Beverage & Food GB&I, told FoodBev that the appointment of the UK DMO is another significant step towards a circular economy for drinks containers.

"Through cross industry collaboration, we show our commitment to delivering a scheme that works for everyone - drinks producers, consumers and retailers," She said. "As well as long term benefits such as reduced litter and increased recycling rates, an October 2027 DRS is also a critical step for businesses, and the UK, to achieve net zero. Together we can create a scheme that reduces waste, fosters sustainable habits and sets a global standard for environmental leadership.”

The role of digital solutions in the DRS

As the UK moves forward with the DRS, digital solutions are expected to play a crucial role in its success. Polytag recently trialled the world-first digital DRS scheme with Ocado, aiming to increase the recyclability of the retailer's milk bottles. This pilot demonstrated the potential for a more flexible and accessible model, particularly as the UK integrates digital components into its national system.

Alice Rackley, CEO of Polytag, commented on the appointment of the DMO as a significant milestone for the scheme. She said: "The appointment of the DMO is a positive and much-needed step forward for the UK’s DRS. It’s certainly encouraging to see momentum returning and some real progress being made towards something that we know will deliver clear environmental and economic benefits across the UK – the unified system we’ve been waiting for."

She continued: "With the announcement of a board made up of digital-focussed organisations such as Co-op, Tesco, and Coca-Cola, it’s clear we are on the path towards a flexible, accessible model that can include a digital component. These organisations have already demonstrated a strong interest in digital solutions, with Coca-Cola using serialised codes for traceability in other global markets and Co-op recently supported our industry-led letter to government calling for a digital DRS approach."

Rackley also highlighted the growing optimism within the industry: "The direction of travel is undeniable, and the industry should take a positive stance. Things are moving forwards, and the foundation is being laid for a DRS, with digital in mind, that is fit for purpose."

What businesses can do now

With more than two years before the go-live date, there is still time to prepare – but not to wait.

Audit your product range: Identify which stock keeping units (SKUs) fall under the scheme and begin exploring packaging adjustments.

Speak to suppliers: Ensure your packaging providers are ready to deliver DRS-compliant formats.

Engage your retail network: Retailers will be your front line in delivering the scheme, and so collaboration is key.

Factor in the costs: Ensure you budget for future compliance and keep an eye on how the DRS might affect your margins.

Monitor updates: Sign up to government updates and industry forums in order to stay ahead of any regulatory shifts.

Final sip

The DRS is more than just a policy change – it is a structural shake-up of how we produce, sell and recover drink containers. For food and beverage manufacturers, the challenge is not just compliance, but adaptation: how to stay flexible in a market increasingly shaped by sustainability, accountability and consumer expectation.

Whether you are a multinational brand or a craft drinks maker, the countdown to 2027 is well underway. Better to prepare now than be caught flat when the deposit drops.