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Cashflow support fails to soothe Scottish DRS concerns

Published:  22 February, 2023

Circularity Scotland has announced that £22 million of cashflow support will be made available to Scottish producers preparing for the Deposit Return Scheme (DRS).

However, businesses plus hospitality and SME representative bodies have criticised the move as too late, with just one week to go before DRS registration.

UKHospitality (UKH) Scotland’s executive director Leon Thompson said: “This late move is symptomatic of the entire Deposit Return Scheme process where decision-making has not been timely or understanding of business needs.

“Frankly, with one week to go before registration for producers is set to close, this is a desperate attempt to boost the number of businesses signing up to be involved in the Deposit Return Scheme.”

The forthcoming implementation of the scheme has already seen retailers invest in changes to their infrastructure, while some smaller overseas producers supplying off- and on-trade alike have signalled that they will pull out of the market.

UKH Scotland said that “suppliers are highlighting a number of drinks brands and products that will not be available in Scotland after 16 August”, suggesting reduced choice for trade and consumer alike.

Meanwhile, the Scottish Wholesale Association (SWA) welcomed Circularity Scotland’s further announcement that upfront charges and retrospective payment charges would be removed for small producers, importers and wholesalers.

“We're pleased Circularity Scotland and the Scottish government have listened to our concerns about the cash flow issues facing businesses. However, many concerns remain unanswered around price-marked packs, GS1 compliant barcodes, bonded warehouses and other issues,” said SWA in a statement released today.

“SWA will continue to push for an 18-month grace period to allow those small producers/importers to prepare for DRS as well as for a de minimis exemption for low volume products.

“There are still too many unanswered questions for producers and importers to sign up to the DRS in a week’s time. The 28 February deadline must be shelved in writing by the Scottish government so businesses across the supply chain still have the confidence to keep trading in Scotland.”

Pressure to delay the start date of the scheme, currently set for August this year, has however been criticised in some quarters, with the Federation of Independent Retailers (FeD) among those cautioning against this.

"For sure there are many issues which are unclear and causing huge problems for shops – and we are now just six months from launch day. Many of our members are angry and frustrated,” said FeD deputy vice president Mo Razzaq.

"At the same time, many retailers have already invested in changes to the layout and fittings in their shops to accommodate the returned bottles and cans. Some shops are also investing money they can't afford in leased machines to handle the empties. We urge the Scottish Government to think carefully about yet another delay to this scheme as this could be of concern to some retailers.”

On the overall success or otherwise of the DRS, UKH Scotland added: “Four and half thousand producers have been identified by Circularity Scotland. However, there is speculation that the number of those registering are sitting well below this figure.

“It is hard to see how the scheme can operate without a critical mass of producers involved.”