Previous analyses of deposit-refund systems (hereafter DRS) mosty concerned consumer-paid DRS. While there has been a trend to put more emphasis on the producers` responsibility in recycling, especilly in Europe, and the supplier-paid DRS has been enforced in Korea during the past decade, little attempt has been made to analyse rigorously the nature of the supplier-paid DRS. This paper looks into the effects of the supplier-paid DRS on firm behaviors and profits under the oligopolistic market structure. It is shown that, in the cournot model where firms strategically interact each other, when the deposit rate is high enough, firms` profit increase as the deposit rate rises. Furthermore, where the number of firms are sufficiently large, it can happen that, as the deposit rate increases, both social welfare and firms` profit improve.