Industry sources indicate that Exchange For Change – the appointed DMO for England, Scotland and Northern Ireland – was the sole applicant during the first round but was not selected.
The decision leaves Wales without a confirmed scheme administrator less than 18 months before its DRS is scheduled to launch in October 2027.
The move comes as the Senedd has been dissolved ahead of the elections on 7 May, meaning that a DMO cannot be appointed until after the next government takes office.
A second application window has now been openly, with submissions closing on 2 June 2026.
Wales’s proposed DRS differs from the rest of the UK in that it includes glass drink containers, adding complexity to the scheme’s design and delivery.
The Welsh Government has confirmed it is unable to comment on the decision due to pre-election restrictions on communications.
A spokesperson for Exchange For Change said: “We are disappointed that our application to be the scheme administrator for the Deposit Return Scheme in Wales has not been approved at this time.
“Industry has always been clear that the right outcome for Deposit Return Schemes is for there to be a fully interoperable scheme across all four nations from October 2027 – one that reflects the realities of how the UK drinks market operates. We strongly believe that having one scheme administrator across all countries within the UK is the best way to achieve this.
“While we were clear in our application that significant challenges existed with the regulations in Wales, we believe that our application suggested practical and effective ways to overcome these.
“Nevertheless, we fully respect the outcome of the application process and will continue to engage closely with the Welsh Government in our role as the scheme administrator for DRS in England, Scotland and Northern Ireland.
“Our focus remains firmly on the setup of the scheme across the rest of the UK, and our work continues at pace to build a scheme that is as effective and efficient as possible from October 2027.”
‘A major disappointment’
Trade bodies and industry representatives have expressed concern at the delay, warning that the lack of progress risks undermining the scheme’s viability.
Ed Woodall, Chief Executive of the Association of Convenience Stores (ACS), said: “We know from over a decade of working on the introduction of DRS in the UK that it takes time to get the details right.
“This is a change that requires major infrastructure and logistics, new facilities in hundreds of stores, and strategic mapping of return points across the country.
“It is extremely concerning to see the Welsh Government fail to make progress on the appointment of the scheme administrator.”
British Soft Drinks Association Director General Andy Bagnall added: “Rejecting the only viable applicant to be the Deposit Return Scheme administrator for Wales on the day the Senedd is dissolved for elections is a major disappointment for anyone who wants to kickstart the circular economy, see litter cut, and boost recycling.”
Glass inclusion continues to be questioned
The inclusion of glass, and how the scheme will work alongside the other UK nations, have been ongoing concerns for some in the sector.
British Glass has called for a pause on the Welsh proposal to include glass beverage containers, warning that key questions over costs and system alignment remain unresolved.
Bagnall explained: “Industry needs certainty and a relentless focus on operational delivery to ensure the scheme for plastic bottles and metal cans can go live with the rest of the UK in October 2027.
“Industry also needs early engagement with the new government to find a practical way forward on the ambition for the Welsh scheme to include glass, so that unnecessary costs are not placed onto businesses and Welsh consumers.”
The DMO will be an independent, not-for-profit, private body responsible for managing the DRS in Wales.
Find out more about the latest DRS policy and regulation updates at the Deposit Return Scheme Conference on 30 April 2026 in London.
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