The company that runs Malta's bottle recycling scheme registered a loss of €1.31 million in 2023 and does not rule out further increases in fees to be able to balance its books.

In its 2023 financial report, published on Wednesday, the Beverage Container Refund Scheme (BCRS) also said any future capital expenditure will require "external funding".

The company controversially raised its administration fees for beverage companies this week, with some beverage companies already starting to raise the prices of their drinks for consumers.

The fee increases are separate from the 10c deposit consumers pay per bottle or can, which remains unchanged. BCRS raised the fees that producers and importers pay for each beverage container placed on the market.

The not-for-profit company says this is mainly how it generates income, and while it absorbed the losses in 2023 (while the scheme was still in its infancy), it has been forced to raise fees to recover losses.

"The nature of how the scheme operates dictates that administration fees are used as the primary medium to ensure that the total costs of operating the scheme are recovered in full.

"The increase will enable the company to operate at sustainable levels allowing the company to recover its initial losses in full over the remaining term of the concession," the report said, referring to last week's increase.

The fees were raised on Saturday: rates for glass bottles increased by 54% per coloured glass container while aluminium containers saw their fees rise by a staggering 143%. The cost of processing plastic and steel containers, meanwhile, rose by between 62% and 111%.

In audited accounts for 2023 which the company filed on Wednesday, directors said the company is not ruling out a further increase of those fees.

"While the company will continue to challenge and streamline its costs wherever possible, should it not recover the total costs, a further review of the administration fee may be necessary," they said.

Over 10,000 tonnes of material was exported and recycled in 2023. Photo: Matthew Mirabelli

The same report also notes the company employs 22 employees who were paid over €900,000 in salaries between them in 2023.

Last week, Prime Minister Robert Abela slammed the company for increasing its tariffs for processing bottles and warned that if it leads to an increase in prices, he would be “on the side of the people”.

He said he expected the company to “improve their efficiency, not demand higher tariffs".

Loss despite recycling success 

The company registered a loss in 2023 while surpassing its recycling goals for that year.

80% of eligible drink containers were returned for recycling in 2023, surpassing the 70% goal. This translates to 214 million containers, with 75% of glass, 81% of PET plastic, and 80% of cans collected and recycled.

Over 10,000 tonnes of material was exported and recycled.

The structure of the recycling scheme is such that BCRS makes money when beverage containers are not recycled, as in those cases it does not have to pay out the 10c fee to consumers.

In its accounts, the company in fact said the losses were primarily due to the recycling success.

"The fact that the company managed to achieve a collection rate of 80% instead of 70% inevitably had a significant negative impact on the operating results as it gave rise to a significantly higher level of redemptions and hence higher costs than originally envisaged," the report said.

The company also saw its equipment depreciate by €2.14 million. Photo: Matthew Mirabelli

That same year the company also saw its equipment depreciate by €2.14 million, which was factored in the final figure for the losses.

In its first few months of operation in 2022, the company's equipment had already depreciated by €230,000.

The company made €6 million from unredeemed vouchers and bottles that were not returned.

The company has 351 reverse vending machines located across Malta.

'No profits, zero'

BCRS CEO Alan Meilak had already told Times of Malta last year that BCRS was expected to report losses.

He said the company had made “no profits, zero”, instead running losses of “over a million euros”. 

As a not-for-profit company, BCRS is obliged to reinvest all profits in the company. 

The expected losses follow a similar performance in 2022 - in its financial statement for that year, the company reported losses of €1.4 million, with the shortfall down to repayments of loans the consortium took out for equipment at its inception.

The scheme caused frustration among consumers but was a recycling success nonetheless. Photo: Matthew Mirabelli

Scheme began in late 2022

The BCRS scheme began operating in late 2022, as part of an EU-wide drive requiring all member states to operate a beverage recycling scheme. 

Under the scheme, producers and importers are charged an extra 10c – in addition to administrative fees – per beverage container, with that 10c charge passed on to consumers who can then recoup the money by returning used containers to recycling points or at select outlets.  

The scheme has attracted complaints from consumers and producers, ranging from grievances over malfunctioning return machines and expired unredeemed vouchers to concerns over the amount of market data held by the company, which represents some of Malta’s largest producers.  

Despite the complaints, however, the scheme has outperformed the minimum collection rates specified by law and in 2024 saw a return rate of 84%, with hopes to achieve a 90% collection rate by 2026.