Scottish stores lose out to drinks producers in DRS funding

Scheme administrator announced £22m worth of cashflow support to drinks producers

DRS deposit return scheme

Scotland’s deposit return scheme administrator has come under fire for failing to address the financial concerns of small shops, as it prepares to hand out a £22m support package to drinks producers.

Circularity Scotland Limited (CSL) confirmed earlier today that it would be granting £22m in cashflow support measures to help Scotland’s brewers, distillers, importers and drinks manufacturers prepare for the introduction of DRS on 16 August.

The firm said this is specifically designed to help small businesses, who have previously voiced concerns about the impact of the scheme on their business’ cashflow. To address this, CSL is removing the day one and month one charges for all producers, up to a threshold of 3m 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 on all producers.

However, store owners have expressed “disappointment” over the news, claiming the financial concerns they’ve expressed over introducing the scheme, have been ignored.

Mo Razzaq, owner of Premier Mo’s in Blantyre, Glasgow told betterRetailing he is urgently trying to secure a meeting with minister Lorna Slater, to lobby the needs of small shops.

“They’ve given them a good package which makes sense,” he said. “But we need clarity, too. They need to stop playing games and help us get ready for this.”

Razzaq stressed costings on reverse vending machines (RVM) are still yet to be finalised, and funding would help retailers pay for them.

“We have to make a lot of changes in store which cost a lot of money,” he said. “Rising energy costs are sky high and this is adding to the financial pressure we are under.”

Elsewhere, CSL also confirmed it will be offering drinks producers the option to use self-adhesive barcode labels for producers, helping to provide a straightforward solution for independent producers and importers for whom the cost of changing packaging to introduce new barcodes could be prohibitive.

Chief executive David Harris said: “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.”

Slater added: “This is a big and welcome change 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.”

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