Return-refill system for beer puts environmental benefits into doubt

Germany | Once the pride of German brewers, the country’s much-touted return-refill system for beer bottles and crates is becoming more and more unmanageable, as brewers flood the market with proprietary containers, thus adding to the SKU deluge.  

The current controversy among brewers, whether to hike the deposit on crates or not, is symptomatic of their heedless investments in packaging, which all aim to underline the uniqueness of their products, all the while beer consumption continues to decline.  

Undeniably, the purchasing costs of new crates and bottles far exceed the deposits on them. Brewers pay EUR 0.14 for a new bottle (versus EUR 0.08 in deposit) and at least EUR 5 for a new crate (versus EUR 1.50 in deposit).

Also undeniably, glass manufacturers are already working at full capacity, which can cause huge delays if brewers want to replenish their bottle inventories, especially during the peak summer months.

However, the problem of no-returns or tardy returns is of the brewers’ own making. Originally, the return-refill system was designed for one type of generic crate and one type of bottle, which were shared by brewers through pools. It was not designed for thousands of bespoke containers which are shipped to regions far away from the breweries.

For example, if a southern Bavarian brewery sells its beer to a local wholesaler, who then sells it on to a friendly wholesaler in Berlin, who sells it to a bottle shop, where the beer is not in hot demand, you can imagine how long it takes until that route is being reversed and the bottles plus crates are returned to sender.

Worse still, too few brewers are prepared to pay for sorting through the empty crates and bottles. Rogue bottles in crates are a common nuisance. Breweries can either employ people to manually sift through piles and piles of crates, and pick out the strays, which is costly, or they can invest in an automated sorting system, which is probably even more costly. Alternatively, they can just dump the misdirected bottles and crates in recycling bins and buy new packaging. This may be the easiest solution but it certainly runs against the idea of the return-refill system.      

Obviously, it should be the wholesalers‘ job to make sure their brewery clients only receive crates and bottles which are theirs. But for some reason or other, many brewers don’t want to pay the wholesalers for this task. No wonder that wholesalers and retailers are vehemently against a hike in deposits because they would have to carry the changeover costs.

Many fear that by increasing the deposit on crates and bottles the whole return-refill system will become more and more unattractive for all parties involved.

Moreover, brewers could find themselves hard pressed to defend the ecological benefits of the return-refill system over non-returnable systems, if the madness of bespoke bottles and crates is allowed to rage on.