Two weeks away from target launch, bottle recycling scheme operator not yet ready to start operating

Exactly two weeks before the commencement of Malta’s long-awaited beverage container refund system (BCRS), administered by BCRS Malta Ltd, the company “continues to work closely with the national regulator…to be in a position to roll out its Beverage Container Refund Scheme”.

This statement comes just two weeks away from the launch date of 1st April, stated on the company’s own website, however retailers and businesses that are a key part of the scheme have told BusinessNow.mt that they are in the dark as to how it will work in practice.

In response, this newsroom reached out to BCRS Malta Ltd for an official update, where it revealed that a total of 331 Reverse Vending Machines (RVMs), used by consumers and possibly retailers to return used beverage containers, have been purchased via a €17 million private investment, but failed to clearly state how many are actually present in Malta at the moment.

Initially set to launch at the end of 2020, the scheme was then delayed to 2021, with Environment Minister Aaron Farrugia citing “certain administrative ECO Contributions issues relating to tax and delayed payments”.

A number of factors are likely to have played a part in the further delay, including the impact of the COVID pandemic on supply chains.

Firstly, how will it work?

The beverage recycling scheme intends to address waste management failures by adding 10c to the cost of beverages covered by the scheme, with consumers able to recoup the charge by depositing empty containers at the aforementioned RVMs or a ‘designated redemption location’ – which can also be a retailer.

Should consumers seek to get their deposit back at the retailer, it can only be reclaimed against a purchase at said retailer, with the deposit value deducted from the consumer’s bill, according to the BCRS Malta Ltd website.

This deposit will initially be paid by beverage importers and suppliers to BCRS Malta Ltd, and will then be passed on down the supply chain, with each step paying 10¢ to its predecessor, from the importer through to the distributor, to the retailer, be it a shop or hospitality venue, to the final customer.

Several small-to-medium sized bars and retail outlets selling beverages that spoke to BusinessNow.mt on condition of anonymity say they have received minimal communication about how the scheme will work in practice – particularly whether they are expected to return containers to BCRS Malta Ltd, or whether they too will need to deposit individual beverage containers in the RVMs the same way a consumer would. 

Another operator shared his frustration about how his establishment could possibly be expected to comply with the major demands to return potentially thousands of beverage containers, with no collection system yet available. 

Should retailers need to make use of the vending machines, the BCRS Malta website states that “closer” to the 1st April 2022 launch date, it will host an interactive map showing all locations around Malta. However, a look through its website shows that this map is not yet functional.

BCRS Malta has refuted complaints over a lack of communication in its response to a request for comment by this newsroom, saying:

“BCRS Malta Ltd, in conjunction with the regulator Circular Economy Malta, have been communicating to the business community for the last six months through a variety of communication channels both traditional as well as online. The company is currently assisting its many stakeholders from the Producers, Importers, Distributors, Retail and HoReCa sectors in their respective onboarding process.”

The company was incorporated by the Malta Beverage Producers Association, the Malta Beverage Importers Association and the Malta Beverage Retailers Association with the obligation, amongst others, to assume the collective extended producer responsibility on behalf of producers, importers and retailers of single-use beverage containers, and take the necessary  measures to achieve beverage container collection targets in terms of the Beverage Containers Recycling Regulations 2020.

The private operator has as its directors Malta’s largest beverage companies, from Farsons to Marsovin, and General Soft Drinks, among others. 

Asked how many of these RVMs are currently in the country, and how many are in place, BCRS Malta made no mention of how many are available for use today. 

Regarding where they would be placed, the company informed BusinessNow.mt: “RVMs will be placed in Retail Outlets and Public Kiosks as determined by a scientific market mapping study identifying the retail outlets and localities with the highest throughput of beverage containers.”

Separately, concerns have been raised about the requirement for small importers and producers to provide BCRS Malta Ltd with potentially commercially sensitive information, including the quantity of each product container placed on the market.

On this topic, BCRS Malta Ltd stated: “Data is protected with the deployment of latest IT technology available on the market both in terms of data protection, access rights and cyber security.

“This is supplemented by confidentiality policies and Chinese walls ensuring that access to sensitive data is highly restricted within the company, with systems programmed to output and report data in aggregate form only.”

The IT system used, was provided by “an international service provider who has already successfully implemented similar DRS systems in Europe. BCRS Malta Ltd takes the privacy of data extremely seriously.”

“The intrinsic typology (material, weight, and shape) and barcode of each seperate beverage container in scope of the Scheme on the Maltese market needs to be registered with BCRS Malta Ltd. so that it forms part of the Scheme’s national product library/database. This is mandated by the Regulations (LN 311/2020). BCRS Malta has developed and will maintain such database and its underlying infrastructure in a secure, reliable, and efficient manner.

“The product registration database, furthermore, provides the backbone to the nationwide Reverse Vending Machine infrastructure, which shall only accept returns of beverage containers which barcodes and typology are in the product registration library. Through such an infrastructural layout, powered through internet of things technology, the system ensures that deposit refunds to consumers are only conducted on beverage containers registered in the database.  Thus, each product barcode and typology needs to be registered separately in the database to enable consumers to claim the refund on each separate and unique product/barcode and as anti-fraud measure.”

Craft importers and producers have also been at loggerheads with BCRS Malta Ltd for months but have made some progress on particular topics.

For example, after a number of craft importers and producers sounded the alarm on a €100 registration fee for each product brought onto the market, stating that it would threaten the survival of their businesses, BCRS Malta Ltd proposed a compromise by which they would waive the fee.

The proposal means that participants would pay only a variable administration fee, depending on the number of containers placed on the market, thereby avoiding the disproportionate impact on craft producers and importers, but also requires the Government to grant the operator a number of concessions.

These concessions included disposing of its annual licence fee of €230,000 for its first year in operation.

It also asked that the Government would also assist and contribute on an ongoing bases towards its information and education campaigns to ensure the successful launch and continued functioning of the scheme.

Finally, it asked for a Government financial contribution onto the capital expenditure that it is currently embarking upon, which exceeds €17 million spent on its clearing centre, 350 RVMs, along with front-end and back-end IT systems. 

BusinessNow.mt has been informed that in the wake of this dispute and the other aforementioned ones around container registration, many importers and distributors have not yet registered their products for the system.

BCRS Malta Ltd has invited BusinessNow.mt for an interview with its CEO to discuss the scheme in more detail.