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Drinks industry bodies in Scotland have called on the government to enact a “grace period” of 18 months following the upcoming implementation of the Deposit Return Scheme (DRS) in August.

In an open letter to the Scottish Minister for Green Skills, Circular Economy and Biodiversity, Lorna Slater, the beverage industry has requested the regulations have an 18-month deferment. It is warning that without action smaller businesses will be “disproportionately impacted by the scheme’s requirements”.

The letter to Slater states that “without a standardised, agreed and legal basis set out in regulations, there will be additional confusion in an already impossible situation“.

It has been signed by the Society of Independent Brewers, the Scottish Wholesale Association, the Wine and Spirits Association, Scotland Food & Drink and the Scotch Whisky Association.

The letter adds: “It will be very difficult for SEPA [the Scottish Environment Protection Agency] to agree different timetables for each of the thousands of small producers impacted by the scheme.”

One outcome of DRS implementation wans the letter is that, “supermarkets and other businesses will choose not to stock products produced by small brewers and other small producers.”

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The DRS is set to be introduced on 16 August and will require all drinks producers and retailers that sell single-use containers in Scotland to sign up for the scheme, under which a refundable GBP0.20 (US$0.24) deposit will apply to PET plastic, steel, aluminium or glass containers from 50ml to three litres in size.

Consumers will be able to return drinks containers to a number of shops and hospitality sites across Scotland. The scheme’s implementation authority, Circularity Scotland, claims the DRS should stop 90% of recyclable products going to waste.

However, the letter added: “There are now only a few weeks left to save thousands of small producers that will be banned from selling bottles and cans in Scotland from August. They lack the finances and resources to meet the scheme’s requirements on time and need an 18-month legal grace period in the regulations and the option to opt-in. Without this certainty, it’s likely that consumers will lose out through reduced consumer choice and increased prices.”

An independent report published last year by the Scottish government found a number of “major risks” regarding the proposed launch of the scheme. In its Gateway Review Final Report, a review team looking at the scheme stated the Scottish government should take a “softer approach” to its implementation. It gave the scheme an amber/red warning that “successful delivery of the project is in doubt with major risks or issues apparent in a number of key areas”.

A spokesperson for the Scotch Whisky Association told Just Drinks that: “As currently constructed, and with only 6 months to go before the planned introduction of DRS, neither business nor consumers have all the necessary information to achieve the successful launch of the scheme. This is despite engagement over many months seeking answers to key questions.”

Speaking to Just Drinks last week, the CEO of Global Brands Steve Perez said the scheme to charge a GBP0.20 deposit on single-use containers will be “an absolute car crash” and cause real issues for retailers and consumers. “We still haven’t worked out whether we’re going to charge VAT on it or not, things like that, or do we include it in part of the retail price, or have a ‘plus deposit’ price?” he added.

Beverage M&A round-up, January 2023 – What Just Drinks thinks