Evaluating the Impact of Deposit Return Schemes on Producer Risk in the UK Soft Drinks Industry

Abstract

This thesis examines how Deposit Return Scheme (DRS) architecture shapes the financial exposure of soft drinks producers. A UK-wide DRS is planned to launch in 2027 to improve recycling rates for beverage containers. However, uncertainty remains regarding scheme operation, financial settlement and interaction between devolved administrations. Divergence across the UK home nations, alongside concurrent packaging waste regulation, creates structural complexity for producers operating across jurisdictions. Although the literature typically frames DRS as a cost transfer mechanism, this study argues that exposure is structurally generated through governance design, allocation rules and settlement sequencing rather than arising as a fixed compliance cost. The research adopts a systematic informed literature review. Core themes were reconstructed as exposure transmission mechanisms and analysed across governance structure, allocation geometry and liquidity timing to explain how obligations are embedded and amplified across settlement cycles. Findings demonstrate that UK-style DRS design creates endogenous exposure pathways through advance deposit financing, reconciliation uncertainty and inter-jurisdictional divergence. Exposure accumulates across cycles rather than dissipating as the system matures. The analysis identifies an efficiency-exposure paradox in which higher recycling performance increases financial impact. Policy layering and incomplete harmonisation further shape exposure scale and persistence. The thesis contributes a governance-centred analytical framework that shifts debate from distributive cost transfer to architectural exposure generation. It provides managerial and policy recommendations to reduce amplification while preserving environmental objectives.