Irn-Bru boss: ‘DRS is a burden, but it’s the law’
Irn-Bru boss Roger White says Scotland’s bottle and can recycling scheme is a “burden” that will cost his company “multiple millions”, but it has no choice other than to comply with the law.
Mr White said AG Barr, which produces Irn-Bru and other soft drinks such as Rubicon, will take a hit to its bottom line after being forced, like other drinks manufacturers, to spend money on packaging and distribution processes to comply with the deposit return scheme.
From August, 20p will be added to every drinks container within the scope of the scheme which will be refundable at participating retailers.
Many drinks producers have spent considerable sums on preparing for the scheme. At the weekend, AG Barr joined forces with other manufacturers, such as Coca-Cola and Britvic, to urge the government to press ahead with the scheme.
Speaking to Daily Business about the costs involved, Mr White said: “We do not know how [consumers] will respond but we have taken a view on consumer behaviour and the costs associated with it.
“We pay a producer fee – multiple millions – we have grossed it into operating costs.”
Asked about the claims by Innis & Gunn founder Dougal Sharp that these fees amounted to “extortion”, Mr White replied: “It is the law.”
He added: “There are challenges to overcome but we have that with all regulations.
“We have to change all our packaging. It is not a question of whether I am happy about that… I have to run a business and follow the law of the land.”
Other businesses have also spent considerable sums on infrastructure and staff to prepare for the launch in August.
Biffa, the company contracted to collect the recycled containers, said recruitment is well underway for an additional 500 people to work on the DRS.
A spokesman said: “We’re also investing £80 million on infrastructure, including opening processing centres in Motherwell, Aberdeen, Thurso, Inverness, Dundee and Grangemouth to count, sort and bale the plastic, glass and aluminium drinks containers collected through the scheme.
“Work has already started on most of these sites and several counting machines have already been delivered.”
Meanwhile, Bbeweries in England are labelling their products as “not for sale in Scotland” to avoid being fined under the deposit return scheme.
Andy Slee, the chief executive of the Society of Independent Brewers, said: “With only around 80 small brewers having registered for the scheme given its vast costs, complexity and lack of time to prepare, it’s likely that more and more will choose to stop selling into Scotland by August.”
The new First Minister Humza Yousaf is under pressure from retailers and hospitality businesses to either pause or drop the scheme because of major uncertainties over how it will operate.
During the SNP leadership campaign, Mr Yousaf said he was minded to give small businesses a year’s exemption to allow them to be properly resourced.
However, the Federation of Small Businesses says this could do more harm than good. Ruth McIlroy of FSB Scotland said: “We have reservations. When people return their bottles they are likely to continue to do their shopping at that store. But if these stores are exempt it will mean those people will go to the bigger businesses.”
Green minister Lorna Slater who is responsible for overseeing the DRS said this morning that she wanted small businesses to fully participate.
Circularity Scotland CEO David Harris told Holyrood’s Net Zero Committee: “Time is not on our side. The sooner decisions are made, and we can deal with certainty and plan accordingly, the better.”