Tomra Shares Fall 6% as France Scraps Mandatory Deposit-Return Scheme

Shares in Tomra Systems ASA (TOM.OL) declined by more than 6% on Monday following a decision by the French government to abandon its plan for a mandatory nationwide deposit-return system (DRS) for beverage containers. The policy shift raises concerns about the company's growth trajectory, which is heavily reliant on the global adoption of such schemes.

France Alters Recycling Strategy

The French government will no longer impose a standardized, mandatory deposit-and-return program. Instead, local municipalities will be given the flexibility to choose their own methods to achieve the European Union's target of collecting 90% of beverage containers for recycling.

This revised approach could lead to investment in alternative solutions, such as expanded curbside sorting and collection infrastructure, rather than the reverse vending machines (RVMs) that are central to Tomra's business model.

Market Reaction and Growth Concerns

The stock's decline reflects investor uncertainty over the future pace of DRS adoption in Europe. The French decision creates a potential precedent for other jurisdictions to consider less stringent frameworks, which could temper the company's long-term growth prospects.

Ad

Monday's drop contrasts with the stock's recent momentum. In August, Tomra shares surged nearly 15% after reporting a 25% year-over-year increase in second-quarter revenue to €405 million, driven by a 45% surge in its Collection division on the back of new DRS rollouts.

Context and Company Outlook

Tomra's strong recent performance was fueled by new system implementations in markets including Poland, Portugal, Singapore, and Romania. Despite the setback in France, the company has maintained its full-year outlook.

Tomra also highlighted a contract to supply around 1,200 RVMs to a major UK retailer ahead of that country's planned 2027 deposit-return scheme. According to a Barclays estimate cited in the report, the total UK market could eventually represent around 17,000 machines for the company, indicating significant opportunities remain in other regions.