Scottish retailers risk losing money from DRS

The fees paid to retailers for handling containers as part of a deposit return scheme (DRS) in Scotland will not cover their costs, according to a trade body.

The Scottish Grocers’ Federation (SGF) said the risk of the scheme being a net expense to retailers would put their sustainability and business survival at risk with potentially thousands of businesses facing closure next year.

SGF represents the largest group of return point operators in Scotland and has been the convenience sector lead in all DRS discussions. It has issued a pre-action letter to Circularity Scotland Limited (CSL), which has been appointed by the Scottish government to administer Scotland’s DRS, asking for details on how the fees were calculated.

In its recent programme for government, the Scottish government confirmed it would launch its DRS on August 16th 2023. It will see the introduction of a refundable 20p deposit on billions of single-use containers with the goal to ensure that 90% of drinks containers are recycled and to drive Scotland’s move to a circular economy. 

All retailers and hospitality businesses that sell drinks to take away are legally required to operate a return point. For manual take back, CSL has proposed that retailers will receive 2.69p per container while for automated returns – through reverse vending machines – the fee proposed by CSL will be 3.55p for the first 8,000 containers received and 1.35p for each additional container.

SGF said the fees were insufficient. “SGF has been and remains fully committed to working with a range of stakeholders to ensure that Scotland has a world leading scheme,” said SGF CEO Dr Pete Cheema. “It is essential however that DRS remains cost neutral to return point operators and does not leave them with an additional cost burden or put them out of business.”

Cheema added that convenience retailers were “faced with the choice of taking on a significant financial burden to set up reverse vending machines, with no means of properly recovering this cost through the scheme, or being forced out [of] the scheme altogether and risk losing all their footfall to large businesses”.

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