Calls to delay Scottish DRS rejected

Plans for the launch of a deposit return scheme in Scotland have recently come under fire: from a powerful drink and food sector and from politicians within both the Scottish National Party and the UK Government. 

On 3 February, representatives from the drinks industry, including the Society of Independent Brewers, Wines and Spirits Trade Association, Scotland Food & Drink, Scottish Wholesale Association and Scotch Whisky Association, sent a joint open letter to the circular economy minister Lorna Slater, highlighting the “continued lack of clarity on how the scheme will work and the action that small producers need to take to prepare”.

Scotland deposit return schemeThen, speaking at First Minister’s Questions on 9 February, Fergus Ewing, Inverness and Nairn MSP, asked Scottish first minister Nicola Sturgeon what the Scottish Government’s response is to ‘reports that 600 drinks producers are concerned about the impact on their businesses, and the survival of them, in relation to the Deposit Return Scheme’ with many “in a state of fear and even despair”.

Fergus Ewing called on the first minister to instruct a pause of “this disaster of a scheme before it becomes a catastrophe” saying that, in its current form, it “will damage Scotland’s reputation as a place to do business.”

Most recently, on 12 February in comments to the Scottish Mail on Sunday, Alister Jack (Secretary of State for Scotland) called for the current scheme for drinks containers, due to come into effect in August, be reconsidered while “a system that works for the whole UK” is designed: “I think we should be working to create a UK-wide system because that is the best way to maximise environmental benefits, minimise disruption to the drinks industry and ensure choice for consumers.”

Key concerns

One of the key concerns voiced is the feasibility for small producers to be able to adhere to the scheme without a legal grace period. In their letter to Lorna Slater, representatives from the drinks industry said “The DRS is particularly challenging for small producers who lack the financial resources and capacity to meet the regulatory requirements in time. This is in no small part due to a continuing lack of clarity on how the scheme will work and what actions they need to take.”

The group warned that without an 18-month legal grace period to allow small producers to adapt to the scheme requirements, many products will no longer be available in Scotland and prices will increase - “at a time when food inflation is running at more than 16%”.

The second concern is around the exclusion of glass, and the impact that might have on existing kerbside collections.

Calls for delay to DRS rejected

While Nicola Sturgeon rejected Fergus Ewing’s calls to pause the rollout of the DRS during First Minister’s Questions, she did reference changes already made to the legislation “in direct response to industry feedback”. She offered reassurance that “ We will continue to work with industry to ensure pragmatic approaches to implementation and we will do so right up to the point of implementation” and that the government “will consider any changes that can sensibly be made”.

Nicola Sturgeon also drew attention to the fact that many of the MSPs calling for a delay had previously criticised the three times the scheme had been delayed.

Specifically referencing concerns around small producers, she said “One of the issues that I am particularly concerned to consider further is whether there is yet more that we can do to reduce any impact on small producers, because some of the concerns that have been raised there are not unreasonable.”

In reference to the exclusion of glass, the first minister pointed out that, only four of the 44 deposit return schemes in operation exclude glass.

Lorna Slater's response

On 9 February, Lorna Slater - Minister for Green Skills, Circular Economy and Biodiversity - wrote a public letter to update MSPs on the scheme, reasserting that “The scheme will be a major part of our efforts to cut emissions and build a more circular economy. It will reduce littering by a third and increase recycling rates of single-use drinks containers from the current rate of approximately 50% towards 90%.

In her letter, Slater provides a status update on key elements of the scheme, including scheme administration; producer fees and registration; small producer involvement; retailer takeback services and handling fees; hospitality collections; local authority preparation; exclusion from the Internal Market Act, and VAT application.

Specifically, in reference to the challenge faced by small producers in preparing for the scheme, Slater says “We want businesses to be ready for the scheme going live on 16 August. However, the Scottish Environment Protection Agency (SEPA) has agreed that, where there are clearly evidenced operational challenges, they will take a proportionate approach to compliance.

She goes on to address “a number of incorrect assumptions” recently made about the scheme, clarifying that “only the very largest producers (those making more than 10 million units per year) would be required to underwrite costs”.

In her letter, Slater also references proposals announced in December to bring forward amendments to the DRS regulations, so that “only the largest grocery retailers will initially be obliged to provide an online takeback service from 2025 onwards”.

Concluding, Slater says “We will continue to work intensively with Circularity Scotland and industry to resolve any outstanding concerns ahead of the launch date. I remain committed to working closely with all partners including members across the Parliament to ensure this transformational scheme is a success and helps us achieve our net zero ambitions.”