“We’ve taken the decision to withdraw from Scotland” - UK companies on Scottish deposit return Scheme ‘disaster’

As concerns around the upcoming Deposit Return Scheme grow, Rosalind Erskine spoke to producers and business owners in England and Wales about whether they’ll still supply to Scotland.

Scotland’s Deposit Return Scheme, where shoppers will pay a 20 pence deposit on drinks that come in a single-use container made of plastic, steel, aluminium, or glass, is set to go live on 16 August, with producers expected to register for the scheme by next week. The scheme has come under widespread criticism as it is feared that it’ll cause price hikes and reduce consumer choice, with some producers outside Scotland already ceasing imports. Just this week,Fergus Ewing, SNP MSP for Nairn and Inverness, called the DRS a ‘disaster’, and a Scottish lawyer claimed that the scheme could create an unlawful trade barrier with the rest of the UK. With all this going on, what’s the reality of other UK businesses stopping their products being sold in Scotland?

Manchester-based Chris Jones, who is the manager director of Paragon Brands, which distributes drinks brands from around the world into the UK, said that they have already stopped their beers being sold in Scotland. He said: “One of the brands within our portfolio is a beer we make ourselves and which sells in multiple countries. We’ve taken the decision to withdraw the beer from Scotland. So while we're going to continue with it on draft format, because it's in a recyclable 50 litre keg, the cans and bottles, we're going to withdraw from the Scottish market.”

He described the DRS as a ‘slapdash’ saying: “I don’t know if Circularity Scotland have consulted with bigger businesses such as Diageo, but they certainly haven't consulted with businesses of our size. Scotland only represents less than 10 per cent of our business so we’re having to decide what to do. There are so many flaws in the scheme (including) that they haven't considered small to medium sized businesses, it seems to be based around large businesses only.”

The SNP Government in Holyrood is planning to implement its deposit return scheme (DRS) later this year. Picture: PA Wire

Siren Craft Brew in Wokingham have also stated that they’ll be withdrawing from Scotland, saying: “without some profound changes to the scheme I cannot see how small breweries, us included will be able to provide cans in Scotland. As it stands we shall be withdrawing small pack from Scotland.”

Another Manchester business, BeerNouveau, conducted a poll at the end of January to see breweries' thoughts on the changes they're planning to make if the Deposit Return Scheme comes into effect as it’s currently are proposed. At this time 56 per cent said they would stop supplying Scotland, 29 per cent still undecided and only 15 per cent said they will carry on. They also asked about moving to glass, which will be exempt in the scheme in England. 21 per cent said they were looking to move to glass with 31 per cent undecided yet 48 are planning to keep using cans. When asked about these results, they said: “Nobody seemed to be taking the DRS seriously when it was just for Scotland, but now it's impacting them it's likely too late. The short is it's going to stop a lot of small UK producers outside of Scotland selling into it. Overall it's bad for the consumer with the restricted choice that brings and I can't see there being enough upturn in Scottish brewing to replace that range for quite a while. It'll likely restrict Scottish producers selling into the rest of the UK too, because that market is going to get flooded by all the beer that used to be sold North. As with everything like this, designed by nationals and multinationals for their own benefit with no thought of how it'll actually work out for anyone else.”

Many importers are asking that glass be taken out of the current scheme, with Welsh wine importer, Daniel Lambert Wines writing that “The solution is simple. Remove glass from DRS like Germany for example. Hopefully Lorna Slater will pull her head out of the sand before the August start date, otherwise you really do have a much bigger problem coming your way when businesses stop supplying Scotland altogether.” Chris Jones agrees, saying that the Scottish Government should take pause and delay for 18 months. “If they took consultation and started to see that glass doesn’t need to be part of it. And, realistically, it should be part of a wider UK initiative.”

Brew Cavern from Nottingham have also spelled out their concerns, saying “A reasonable percentage of our turnover comes from sales into Scotland. What right does (Lorna Slater) have to strip that away because (there’s been) no engagement with small businesses to address their concerns? We sell products from over 100 breweries, cider and wine makers. It’s logistically impossible to ensure they’re all signed up to this scheme, especially as some are overseas breweries who may not see any value in registering.”

Chris Jones added: “we're just one company and there are hundreds of companies that supply alcohol in Scotland. But we have already taken the decision to end our supply of certain products within our portfolio in Scotland. We clearly can't make that decision for any products that sell into an Asda, for example, because it would threaten our wider UK listing. But we’ve been compelled to look at that.”

UK-wide drinks suppliers, business owners and producers as well as those in Scotland are all clear on the fact that they want a green initiative and that recycling needs to improve but, as Chris Jones says, “not this way.” He said: “None of us in the drinks industry who produce bottles and cans are in a state of denial that recycling needs to be improved. And we all need to participate. Nobody is putting our heads in the sand and saying ‘this shouldn't apply to us’. Everyone accepts that this is the right thing to do. Just not this way.”