Select Committee on Environment, Transport and Regional Affairs Fifth Report


  Thank you for inviting INCPEN to give oral evidence. We have noticed that other witnesses have also been asked questions about packaging. In particular the Minister for the Environment was asked last week about deposit/refund schemes for containers.

  We appreciate that such schemes may seem like an easy solution but in practice they are seldom efficient especially for small items like packaging. Enclosed is a brief note on the subject that we hope is helpful.

Jane Bickerstaffe


  Mandatory deposits seem like an easy way to encourage people to return containers but they are usually administratively expensive, they are only feasible for a small proportion of the products in the waste stream (drinks containers) and often have unintended effects.

  There are three reasons why in some countries a monetary deposit has been applied by law to a package:

       1.  As an anti-litter measure in the hope that litterers will be encouraged to return a container rather than litter it and forfeit the deposit.

       2.  To encourage the use of refillable containers in the mistaken belief that refillable systems are always environmentally preferable and, indeed, do not generate waste.

       3.  To encourage the return of containers for recycling.


  Nine American States, three Canadian provinces and one Australian State introduced mandatory deposit laws in the 1970s. They aimed to reduce litter by requiring all beer and soft drink containers to carry a deposit, refunded on return of the container to the retail outlet that originally sold it.

  They succeeded in reducing litter from drinks containers (about 10 per cent of litter) but did nothing about other littered items and in some instances, in New York for instance, it led to an overall increase in litter.

  It was thought that if all empty containers carried a deposit, then even if they were littered, someone would collect them and redeem the deposit. As expected, drinks containers were collected from street and litter bins but the newspapers, bus tickets and other discarded items that were emptied from the bins, in the search for containers, were left to blow around the streets.


  In the US, faced with the requirement to take back and pay a deposit on all containers, retailers quickly discovered that it was easier to toss cans and plastic bottles in a sack in the corner than place glass bottles carefully in stacked crates, which took up much more space. The result was exactly the opposite of the law's intention—glass bottles disappeared from the market.

  The effective operation of refillable bottle systems is not dependent on deposits. One of the most successful systems over the years has been the British doorstep milk delivery system and that works without a deposit.

  Industry uses refillable, returnable systems when they make environmental and economic sense. Refillable bottles are still used in the pub trade, and there is increasing use of reusable packaging for business-to-business use (for example, collapsible crates are often used to ship components to an assembly plant).

  However, because refillable containers have to be strong enough to withstand repeated journeys and fillings, they are heavier and take up more space than single trip containers. This means that they often use more resources and energy.

  Choice of container system depends on a huge range of technical, social and environmental considerations, including the nature of the distribution systems used and consumer behaviour and preferences. Small corner shops continued to stock refillable soft drink bottles for many years after non-refillable bottles and cans established a dominant share of the take-home trade, but they went into decline because consumers rarely bought them and when they did, they failed to return the empties—despite the deposit. There is nothing more wasteful than a returnable pack that does not get returned.


  While mandatory deposits may be an effective way of collecting drinks containers for recycling, their practicality diminishes as the number of products covered increases. It is not feasible to expect people to queue up to reclaim the deposit on every item of recyclable packaging used in the home. Thus mandatory deposits are unsuitable as a way of collecting products bought in large quantities at great frequency.

  If non-drinks packaging is to be recycled—and newspapers—kerbside collection and bottle, can and paper banks will still be needed. Mandatory deposits undermine the economics of collecting other materials from the household, since without the critical mass offered by drinks containers, the costs per tonne collected is much higher. Thus mandatory deposits are inappropriate as a collection mechanism since they single out used packaging for certain products from similar packaging for other products.


  Deposit system result in increased prices. They cost more to run than industry can make from them through the retention of unclaimed deposits and the value of the reclaimed material, since they require extra non-revenue-generating activities which build inefficiencies into distribution operations.

  For retailers, the additional handling and sorting costs and space requirement reduce the profitability of drinks in relation to other products carried, which leads to lower prices to the supplier as well as higher prices for the consumer. Retailers tend to respond to the introduction of mandatory deposits by reducing the shelf-space allocated to deposit-bearing products and the number of varieties stocked, so the consumer also loses out through restriction of choice.

December 2000

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