Our food and drink manufacturers are a key part of the Scottish economy – they have an annual turnover of more than £10billion and provide 45,000 high quality jobs.
My role as policy manager is to gather views from the food and drink manufacturing industry and work with government and other policy makers to ensure food and drink manufacturers can operate in the best possible business environment in Scotland.
But many food and drink manufacturers are facing an uncertain future. As Brexit continues to loom on the horizon, a steady stream of manifesto commitments adds additional financial and legislative burdens to the sector. Today I am shining a light on the challenges faced by beverage manufacturers.
Beverages are already subject to additional charges as a result of government policies – the soft drinks industry levy on sugar sweetened beverages and the minimum unit pricing on alcoholic beverages in Scotland.
The full impact of these remains to be seen but the consumer has seen the price of some drinks increase over the last year.
More policies are on the way– the UK Government will soon be consulting on a deposit return scheme for England and Wales as well as changes to packaging and waste regulations in line with its support for the EU’s Circular Economy Package. The latter includes provisions that food and drink manufacturers should cover the full net costs of meeting future recycling targets.
These must be at least 80 per cent of the necessary costs, although the UK Government seems likely to push for 100 per cent.
In Scotland, the Scottish Government is pushing ahead with plans for a Scotland-only deposit return scheme having launched a detailed consultation at end of June.
So, what exactly is a deposit return scheme?
Essentially, as the customer, you initially pay more money for a drink in a can or bottle. This extra money is a ‘deposit’ on the container and means you get it refunded when you return your empty container, either to a shop or an automatic bottle recycling machine.
In principle it sounds like a great idea, and it has worked successfully in a number of European countries, but there remain challenges that the Scottish Government must consider very carefully to ensure the scheme increases recycling.
We have had great success with kerbside recycling and a deposit return scheme could, if designed well, complement this to reduce litter and drive up recycling.
But the emphasis here is on well-designed – to make this happen we urge the Scottish Government to work together with the other nations on a single system, suitable for the whole of Britain.
A single scheme that increases recycling across Britain makes sense. Different systems in England, Wales and Scotland could result in much higher labelling, warehousing, and transport costs for businesses, organised crime moving bottles between nations to make money, and more confusion for the consumer.
The industry is ready and willing to come together to set up and run the scheme on a not-for-profit basis and will be greatly assisted in this challenge if the decision is made to go forward with a GB-wide scheme.
Concerns about the proposed Scottish deposit return scheme remain – for example, how will the scheme work in our island and rural communities and what recognition has been given to the fact that the scheme could mean that low-income families might have to initially pay out an extra 60 per cent on a pint of milk if the deposit is set at the upper levels set out in the consultation?
What if the set-up costs for the scheme are too high for smaller manufacturers to participate and they choose not to supply Scotland, resulting in less choice on our shop shelves?
The industry looks forward to working constructively with the Scottish Government to answer these questions and ensure that the deposit return scheme for Scotland works well for businesses, consumers, and most importantly the environment.
Cat Hay, policy manager, Food and Drink Federation (FDF) Scotland.