Recycling row

Brewer accuses Circularity Scotland of ‘extortion’

Dougal Sharp at Ashton Lane Beer Kitchen
Dougal Sharp: ‘why should the industry be liable?’

Brewer and pubs chain founder Dougal Sharp has accused the body behind Scotland’s controversial bottle recycling scheme of using extortion tactics to bankroll the project.

Producers will be expected to pay between £50,000 and £1.5 million a month to cover any delays to the scheme which is due to launch in August.

In a letter to those who will be required to comply with the new deposit return scheme (DRS), Circularity Scotland has laid down “non-negotiable'” terms.

If they refuse to sign the agreement by the end of February they will not be allowed to trade in Scotland.

Dougal Gunn Sharp, who heads Innis & Gunn, said many producers simply cannot afford such payments. He adds that the proposals will double the price of beer in Scottish supermarkets compared to those in England and create a grey market with consumers crossing the border to buy supplies.

“We firmly believe that Circularity Scotland and the Scottish Government are extorting producers in Scotland,” he said. “You can only trade in Scotland if you sign up to Circularity Scotland’s supplier agreement.”

He added: “Contained in this agreement – which is a binding contract – producers will pay fees based on the size of their business if the DRS scheme doesn’t launch on the 16 August 2023.

“We have no control over this date, nor any responsibility for the scheme’s readiness to launch so why should the industry be liable?

“Circularity Scotland have publicly said that they are focused on delivering a DRS scheme that works for all businesses of all sizes and delivers for Scotland. So, how can they justify this latest move?

“Circularity Scotland’s position on the terms is that ‘if you don’t sign up to these onerous obligations you can’t trade in Scotland’. 

“The reality is that few companies will be in a position to pay these sums (penalties) on a monthly basis.”

Details of the demands from Circularity Scotland

Speaking to Daily Business, Mr Sharp said it is tantamount to an unsecured loan. He has raised his concerns with Circularity Scotland and Lorna Slater, the government minister behind the DRS, which has been roundly condemned by the industry as unworkable.

Circularity Scotland says there have been significant upfront costs. It said large producers have been asked to support the investment.

AG Barr, which manufactures Irn-Bru and a number of other soft drinks, said in a trading update today that its preparations for the scheme are “well advanced”, without elaborating. A spokeswoman for the company told Daily Business that the company has not yet shared his views.

“They are taking a pragmatic approach and getting on with being as prepared as they can be,” she said, adding that the company may have more to say about it when it announces full year results in March.

The latest twist in the DRS debate follows more concerns about the effect of rising costs in the hospitality sector.

Colin Wilkinson, managing director of the Scottish Licensed Trade Association, said a survey taken after Christmas revealed that three out of five outlets are operating restricted hours with rising costs, staff shortages and increases in energy prices.

“Our members are also concerned about the impact of Scotland’s deposit return scheme (DRS) and the proposed restrictions on alcohol advertising sponsorship which will impact on many everyday aspects of pub life – from sponsoring the dominos team to serving local beers in branded glasses,” he said.

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