Deposit return scheme consultation: analysis of responses

10 Level of deposit (Q25 and Q26)

10.1 The consultation paper outlined the deposit levels used in other schemes around the world and discussed various factors which needed to be considered in setting the deposit level for the proposed scheme in Scotland – e.g. the impact on consumer behaviour, equalities and potential for fraud – and the need to strike the right balance between these factors. The option of having a flat rate or variable deposit level was also discussed. The consultation paper asked two questions on the issue of the deposit level.

Question 25: Do you have a preference for what level the deposit should be set at? [Yes / No / Don’t know] Please explain your reasoning for choosing this level.

Question 26: Do you think that certain types of drinks containers should carry a different deposit level? [Yes / No / Don’t know] Please explain which ones and why you think the deposit should be varied.

Preferences regarding the deposit level (Q25)

10.2 Question 25 asked for respondents’ views on the level at which the deposit should be set. This was a two-part question: the first part of the question was a closed question asking respondents to indicate (Yes / No) if they had a preference regarding the deposit level, while the second part asked respondents to indicate what level the deposit should be and to explain their reasoning in choosing this level.

10.3 Overall, 70% of respondents answered ‘yes’ to indicate that they had a preference regarding the level of the deposit. Organisations were less likely than individuals to say this (58% vs 71% respectively) (Table 10.1).

Table 10.1: Q25 – Do you have a preference for what level the deposit should be set at?  

	Yes		No		Don't know		Total
Respondent type	n	%	n	%	n	%	n	%
Public sector organisations	6	27%	13	59%	3	14%	22	100%
Food and drink producers	10	45%	3	14%	9	41%	22	100%
Charities	16	94%	–	0%	1	6%	17	100%
Retailers	8	44%	6	33%	4	22%	18	100%
Recycling / waste mgmt orgs	10	71%	3	21%	1	7%	14	100%
Packaging manufacturers	5	38%	7	54%	1	8%	13	100%
Community bodies	8	89%	1	11%	–	0%	9	100%
Environmental consultancies	6	86%	1	14%	–	0%	7	100%
Hospitality and restaurant trade	2	33%	3	50%	1	17%	6	100%
DRS companies	4	100%	–	0%	–	0%	4	100%
Other organisations	6	86%	1	14%	–	0%	7	100%
Total organisations	81	58%	38	27%	20	14%	139	100%
Total individuals	1,322	71%	345	19%	186	10%	1,853	100%
Total (organisations and individuals)	1,403	70%	383	19%	206	10%	1,992	100%

Percentages may not total 100% due to rounding.

10.4 Among those who provided comments at Question 25, around 85% suggested a specific individual amount or range, or stated a preference for a system incorporating a variable deposit level within their comments (see also Question 26 below). The suggestions made by these respondents are summarised in Table 10.2 below. 

10.5 As can been seen, respondents suggested a wide range of deposit levels. However, more than half of all respondents suggested deposit levels of between 15 and 20p (32% suggested 15 to 20p, 2% suggested 15p and 24% suggested 20p). Organisations were somewhat more likely than individuals to favour lower deposit levels although for both groups the median amount suggested was very similar (15–20p for organisations and 20p for individuals). The overall median deposit suggested was 20p.

10.6 In a small number of cases respondents said that the deposit should be ‘zero’ as they were opposed to the introduction of a DRS or did not think a return scheme should operate on the basis of consumer deposits – these responses are not included in Table 10.2.

Table 10.2: Q25 – Do you have a preference for what level the deposit should be set at? 

	Individuals		Organisations		All respondents
Level of deposit suggested	n	%	n	%	n	%
Less than 10p	27	2%	4	5%	31	2%
10p	65	5%	11	14%	76	6%
10-20p	49	4%	12	15%	61	4%
15p	31	2%	1	1%	32	2%
15-20p	413	32%	20	25%	433	32%
15-25p	15	1%	1	1%	16	1%
20p	313	24%	10	12%	323	24%
20-25p	17	1%	0	0%	17	1%
More than 20p	29	2%	0	0%	29	2%
25p	26	2%	0	0%	26	2%
30p	15	1%	1	1%	16	1%
50p	21	2%	0	0%	21	2%
More than 50p	17	1%	2	2%	19	1%
Other monetary range / amount	89	7%	2	2%	91	7%
Variable level	165	13%	17	21%	182	13%
Total	1,292	100%	81	100%	1,373	100%

Percentages may not total 100% due to rounding.
Notes to table: The individual amounts or ranges shown were proposed by respondents (with the exception of the categories of 'Less than 10p' and 'More than 50p'). Note that the categories are not mutually exclusive – e.g. 10–20p overlaps with 15–20p.
Less than 10p: Includes individual amounts below 10p and ranges up to and including 10p – e.g. 5–10p.
More than 50p: Includes individual amounts above 50p, and ranges from 50p upwards – e.g. 50–100p.
Other range or amount: Some ranges were wide ranging – e.g. 10–100p, 50–200p), and some ranges / amounts were suggested by small numbers of respondents only.
Variable level: This category includes responses from those who thought the deposit amount should vary according to a range of factors – e.g. product, container size, packaging material, sale price, etc. Around half of these respondents provided an indication of upper and lower deposit levels – e.g. 15p for small bottles, 50p for large bottles.

10.7 Table 10.3 below shows the views of those who responded online or via email alongside those who responded via the HYGTB postcard campaign. Again, the median deposit suggested when online, email and postcard responses are considered is 20p.^[22]

Table 10.3: Q25 – Do you have a preference for what level the deposit should be set at? (online / email responses and campaign responses)

	Online / email respondents		Postcard respondents		All respondents
Deposit level suggested	n	%	n	%	n	%
Less than 10p	31	2%	69	7%	100	4%
10p	76	6%	214	23%	290	13%
10-20p	61	4%	2	0%	63	3%
15p	32	2%	34	4%	66	3%
15-20p	433	32%	0	0%	433	19%
15-25p	16	1%	0	0%	16	1%
20p	323	24%	371	40%	694	30%
20-25p	17	1%	0	0%	17	1%
More than 20p	29	2%	0	0%	29	1%
25p	26	2%	69	7%	95	4%
30p	16	1%	61	6%	77	3%
50p	21	2%	86	9%	107	5%
More than 50p	19	1%	16	2%	35	2%
Other monetary range / amount	91	7%	14	1%	105	5%
Variable level	182	13%	3	0%	185	13%
Total	1,373	100%	939	100%	2,312	100%

Percentages may not total 100% due to rounding.

10.8 The following sections discuss the views of respondents about deposit levels. (Note, however, that the views of those who favoured a variable deposit level are discussed with comments made at Question 26 below.)

10.9 In explaining their views, respondents made three main points in terms of the factors that should determine the deposit level. They highlighted the following, largely reflecting the arguments outlined in the consultation paper:

• The potential financial impact on consumers: Respondents were concerned about the potential impact on consumers, and those on low incomes or tight budgets in particular. There was a concern that setting the level too high (particularly in relation to low-value basic items) would affect the affordability of products and have a disproportionate impact on those with limited means, or those who might find it harder to access return points to get their deposit back. However, some offered a different view, suggesting that the deposit level did not matter as it would be returned to consumer in due course.
• The potential impact (financial and administrative) on retailers and manufacturers: Respondents were also anxious that the deposit level did not distort the market by influencing consumer choices, impacting on sales or profit margins, or encouraging retailers to change their packaging to a material outwith the DRS. In addition, there were some concerns about business cash flow and passing scheme costs on to consumers. However, there was also a view that an appropriately set deposit level could be effective in bringing about change in the use of packaging by manufacturers.
• The need to incentivise participation in the scheme: Respondents stressed that the deposit had to be high enough to make it ‘worthwhile’ for people to collect and return their containers, or gather up other people’s discarded containers to claim the deposit (in the case of children in particular). It also had to take account of people in rural areas with less access to return points. At the same time, it was noted that the deposit level was not the only factor which would affect return rates.

10.10 Less often, respondents noted (i) the need to protect against fraud, and suggested that a ‘lower’ level of deposit was required for this reason; (ii) the importance of ensuring that the deposit level supported the economic viability of the scheme and the reprocessing industry; and (iii) the importance of raising awareness and encouraging longer term changes in attitudes and behaviour with regard to recycling.

10.11 Occasionally, the following points were also made: 

• The deposit should be a single coin or a ‘round’ figure as this would make refund transactions simple for both retailers and consumers.
• Deposit levels should be consistent with any other future UK-wide schemes.
• Decisions about deposit levels need to consider the combined effect on retail prices of a deposit and the recently introduced minimum unit price for alcohol or the proposed tax on sugary drinks.

10.12 It was common for respondents to discuss more than one factor that should be considered in determining the deposit level for the scheme. Most often, discussion focused on the financial impact on consumers and the need to incentivise behaviour change, with respondents stressing the need to strike the right balance between these two considerations – i.e. they thought the deposit level should be low enough not make the initial outlay on products unaffordable, but high enough to encourage people to participate in the scheme by returning their containers. Less often, respondents talked about the need for the deposit to be high enough to encourage returns but not so high as to encourage fraud.

10.13 It was notable that respondents put forward similar reasons and emphasised the need for balance, regardless of the level of deposit that they favoured. 

10.14 While many of the points above were made by a range of respondents, some organisations did not give a view on the deposit level – they felt this was a matter for the scheme operator who should be able to set the deposit at a level that met the scheme objectives, and vary this as appropriate as the scheme developed.

Views on variable deposit levels (Q26)

10.15 Question 26 asked for views on the specific option of a system incorporating different deposit levels for different types of drinks containers. The consultation paper briefly discussed the advantages and disadvantages of such an approach.

10.16 Table 10.4 below shows that just a third of respondents (34%) favoured variable deposit levels for different containers. However, there were notable differences between the views of individuals and organisations, with organisations much less likely to support this option (12% compared to 36%), and more likely to reply ‘no’ (74% of organisations said ‘no’ compared to 48% of individuals).

10.17 Moreover, the proportion of individuals agreeing that different drinks containers should carry a variable deposit level (36%) was markedly higher than the proportion who expressed this view at Question 25 (13% made comments suggesting a preference for a ‘variable level’ deposit at Question 25 – see again Table 10.2 above).

Table 10.4: Q26 – Do you think that certain types of drinks containers should carry a different deposit level?

	Yes		No		Don't know		Total
Respondent type	n	%	n	%	n	%	n	%
Public sector organisations	3	14%	13	62%	5	24%	21	100%
Food and drink producers	3	14%	14	64%	5	23%	22	100%
Charities	1	6%	15	88%	1	6%	17	100%
Retailers	1	6%	14	82%	2	12%	17	100%
Recycling / waste mgmt orgs	2	17%	10	83%	–	0%	12	100%
Packaging manufacturers	1	10%	6	60%	3	30%	10	100%
Community bodies	2	22%	7	78%	–	0%	9	100%
Environmental consultancies	2	29%	5	71%	–	0%	7	100%
Hospitality and restaurant trade	–	0%	4	67%	2	33%	6	100%
DRS companies	–	0%	4	100%	–	0%	4	100%
Other organisations	1	13%	7	88%	–	0%	8	100%
Total organisations	16	12%	99	74%	18	14%	133	100%
Total individuals	573	36%	761	48%	261	16%	1,595	100%
Total (organisations and individuals)	589	34%	860	50%	279	16%	1,728	100%

Percentages may not total 100% due to rounding.

10.18 The following sections consider, in turn, the views of those in favour and those opposed to variable deposit levels. Those respondents who selected ‘don’t know’ made broadly similar points to those who answered ‘yes’ or ‘no’, and their views are also covered in the sections below. (Note that comments on a variable deposit level made in response to Question 25 are also covered here.)  

Opposition to a system based on variable deposit levels

10.19 Table 10.4 above shows that around half of individuals and three-quarters of organisations did not support a scheme based on different deposit levels for different container types. Comments from this group generally echoed points made in the consultation paper. In particular, they favoured a flat rate deposit because they thought that this would be simpler for consumers to understand and would make the system easier to operate and administer for all parties (consumers, retailers and producers). This included making manual deposit return transactions more efficient and straightforward. 

10.20 Some respondents also thought that variable deposit levels may have unintended consequences in (i) influencing consumer purchase decisions or (ii) leading consumers to believe that it was more important to return some types of containers rather than others. By contrast, they thought a flat rate would (i) be more effective in influencing producer decisions about packaging; (ii) be fairer for low-income families; and (iii) protect against fraud.

10.21 There was also some support for the suggestion in the consultation paper that a variable producer responsibility fee might be used alongside a flat rate deposit to reflect the different value of different materials collected via the scheme. 

Support for a system based on variable deposits

10.22 Those respondents (mainly individuals) who supported a system based on variable deposits identified a wide range of inter-related factors which they thought were relevant to setting the deposit level in such a system. These included the following:

• The material the container was made from (respondents often distinguished between glass and plastics), the amount / complexity of packaging used and the related environmental impact
• The size / volume / weight of the product
• The cost of the product, with various suggestions for percentage-based or band-based systems
• The complexity and costs associated with reprocessing different materials and the value attached to the material in the reprocessing industry 
• The nature of the product (e.g. ‘on the go’ products, essentials vs luxuries, ‘healthy’ vs ‘unhealthy’ products, multipacks vs single items), or the context in which it was purchased (e.g. at an airport)
• The scale of the litter problem associated with particular products and the need to improve recycling rates for certain types of containers / products. 

10.23 It was common for respondents to offer a combination of factors which they thought might be used to determine deposit levels.

10.24 Respondents in this group often advocated using the deposit level as a tool to influence consumer, retailer or producer behaviour (in terms of purchasing and recycling behaviour, and in terms of encouraging less environmentally damaging packaging).

Other comments related to setting the deposit level

10.25 Across all groups, some respondents suggested the following:

• The deposit should be reviewed and adjusted over time in the light of experience, and to reflect changes in consumer prices. There were calls for an initial low deposit, an initial trial period, or a transition period.
• Deposit levels would depend on the scope of the scheme, which was yet to be decided.
• Evidence and experience from existing and historical UK schemes (including the plastic bag levy), from schemes elsewhere, and from existing or future research and modelling exercises could provide pointers for setting the deposit level (or levels). Some respondents provided evidence as part of their response.
• The scheme should use vouchers, tokens or points or offer a system for ‘banking’ deposits with a bonus for doing so.