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Cross-party report issues dire warning about Deposit Return Scheme

Published:  29 June, 2022

An inquiry led by the cross-party beer and pubs group in the Scottish Parliament has warned that a Deposit Return Scheme (DRS) cannot be successfully implemented without drastic changes to the scope and remit of the proposed initiative.

Quoting from the Scottish government's website, “the chances of the scheme successfully going live on time, within its full scope, are vanishingly thin and unless serious defects are addressed the scheme will not succeed and may prove a very costly failure.”

As reported by Harpers, the scheme was due to be implemented in 2022, however, a perfect storm of Covid-19, Brexit and a struggling hospitality sector delayed the introduction of Scotland's inaugural attempt to run a DRS.

According to the government, it is now due to go live in August 2023, presuming that these outstanding concerns can be addressed.

Commenting on the report issued yesterday (28 June), UKHospitality Scotland executive director Leon Thompson, said: “With little over a year until Scotland’s Deposit Return Scheme goes live, today’s report from the Cross-Party Group on Beer and Pubs should serve as a wake-up call.

“The complexity of the Scheme brings with it inherent financial risks to hospitality businesses. Scotland members continue to be concerned about secure storage, the theft of containers and the breakage of glass, all of which will result in the loss of deposits – a situation that would hit businesses hard.”

Thompson also highlighted a concern regarding the VAT paid on deposits. “Unless HMRC makes changes, then businesses and consumers will be paying 24p per container, but will only receive 20p back. DRS will become another form of taxation on businesses and customers, adding to the cost-of-living crisis,” she said.

“It is clear that all businesses will need to make significant changes to their financial and operating systems in order to comply with the complexity and variance in the regulations. This also threatens the prospect of a dramatic reduction in choice for Scottish customers as businesses withdraw from the market.”

A DRS is also due to be rolled out across England and Northern Ireland, at a later unspecified date.

However, DEFRA announced in March this year that glass bottles will not be included in the scheme, due to concerns over the feasibility of collecting and recycling glass bottles via reverse vending machines.