Concerns remain over DRS despite cash support
Drinks groups say the cash support provided for the new bottle recycling scheme is not enough to ease a range of other concerns about how it will operate.
Circularity Scotland, which will oversee the deposit return scheme, yesterday announced a £22 million package to help Scotland’s brewers, distillers, importers and drinks manufacturers prepare for its introduction in August.
It will remove upfront charges for drinks producers with lower sales volumes and thereby ease concerns over cashflow. Producers will also have the option to use simpler self-adhesive barcode labels.
But drinks producers say many concerns remain unanswered, particularly around collection times, storage and security, bonded warehouses and hybrid hospitality venues where some off-sales transactions take place.
Colin Wilkinson, director of the Scottish Licensed Trade Association, said: we still have serious concerns that the scheme currently being proposed will increase costs for the consumer and reduce the amount of choice available.
“Many key questions remain unanswered and Minister for Green Skills, Circular Economy and Biodiversity, has been unable to tell us how many producers – so far – have signed up for the scheme. The level of producer registration is crucial to the scheme’s success.”
He said that at a meeting on Tuesday, the Circularity Minister Lorna Slater indicated that she was unaware of how many producers had registered with the scheme. Nearly 4,500 producers need to register by the end of the month to allow their products into the Scottish marketplace.
He added that Circularity Scotland’s announcement does not mention a grace period to allow those producers/importers to physically prepare.
“Our view is that this is crucial given there are still so many unanswered questions around the decisions they still need to make,” said Mr Wilkinson.
“We continue to call on the minister to cancel the 28 February producer registration deadline – this will give drinks businesses across the supply chain the confidence to keep trading in Scotland.
“Registration for retailers and hospitality operators begins on 1 March and there are still many issues that remain unresolved.
“We also require definitive exemption criteria for licensed hospitality (closed loop) businesses that provide food takeaway/deliveries and include wine/beer etc, can collection in high-volume premises, cash flow similar to the issues with SME producers that have just been given support, the scale of delisted products, and lack of information on what retailers and operators need to do – there remains an urgent need for clarity.”
The Scottish Wholesale Association said it will continue to push for an 18-month grace period to allow those small producers/importers to prepare for the DRS
“There are still too many unanswered questions for producers and importers to sign up to the DRS in a week’s time,” it said.
“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.”
The move by the scheme operator comes ahead of a debate in parliament today led led Tory MSP Maurice Golden who is calling on SNP members to support his call for it to be delayed.
Circularity Scotland is removing the day one and month one charges for all producers, up to a threshold of three million units per year.
It is also providing two month credit terms on deposits and fees up to the same volume threshold to reduce the working capital impact on all producers.
The three million unit threshold has been established to ensure that the thousands of smaller scale producers selling in Scotland benefit more proportionately from the cashflow support.
This aims to help companies such as craft brewers, wine importers and craft spirit producers. The two month credit terms will be made available to all producers, regardless of their size, ensuring all producers within the scheme are treated equally.
David Harris, chief executive of Circularity Scotland said: “Circularity Scotland was established by industry to meet their obligations under the deposit return scheme as efficiently and cost-effectively as possible.
“This announcement is further evidence of how we are continuing to innovate and identify additional ways to mitigate the pressure on businesses. We know that smaller producers in particular have been concerned about the cashflow impacts of the scheme, and these measures will address those concerns.
“Circularity Scotland has successfully secured over £100m of third-party funding to establish the infrastructure of the deposit return scheme, with only minimal up-front funding from the very largest producers.
“This funding approach allows producers both large and small to benefit on equal terms from this investment in world-class infrastructure and leading-edge technology and only pay their share of the costs once the scheme is in operation.
“We have already announced reductions in producer fees of up to 40%, while also being able to offer the highest return handling fees of comparable schemes anywhere in the world.
“These additional support measures further demonstrate our confidence in being able to deliver ongoing operational efficiencies once the scheme has gone live. We are committed to ensuring that the deposit return scheme works for Scotland, is cost effective for business and helps protect our environment for generations to come.”
Ms Slater said: “This is a big and welcome change that that responds directly to many of the concerns that have been raised, particularly those from smaller producers like craft brewers.
“It addresses initial cash flow challenges, and provides a pragmatic and simple solution to the issues raised around barcodes for smaller product lines. This is a package that gives businesses the clarity and confidence they need to be part of Scotland’s deposit return scheme.
“Over the last few months I have been meeting industry regularly to listen to their feedback and this industry-led solution has been designed in direct response to its concerns. I remain committed to a pragmatic approach to implementation between now and the 16 August.
“By working together we can lead the UK in delivering a deposit return scheme which will increase Scotland’s recycling rates from around 50% to 90%, cut emissions, tackle littering and address public concerns about the impact of plastic and other waste.”