Under the scheme, consumers will pay a 20p deposit when they buy a drink that comes in a single-use container (glass, plastic, steel, or aluminium). This will be refunded when they return the empty container to one of tens of thousands of return points being installed across the country.

The DRS is one of many ways the Scottish Government is aiming to improve recycling and reduce litter, but the proposed scheme has been criticised by many who claim it is more burdensome than similar proposed initiatives in the rest of the UK.

There are slight differences between schemes proposed for Northern Ireland, England and Wales, due to be implemented in 2025. For example, England is likely to exclude glass bottles, instead focusing on plastics, on the basis that recycling rates for glass are already high.

Colin Millar is a Partner, Wright, Johnston & Mackenzie

This has caused some confusion for traders and producers operating across the UK. For someone putting products on the market in Scotland, there will be an additional administrative burden. This will impact costs and potentially labelling.

Some say if Scotland had delayed, there could be a far more “streamlined” arrangement across the four UK nations, removing the need for producers who sell in the UK to tailor products just for Scotland or pay more under the Scottish scheme to use UK-wide labelling.

Smaller producers have also expressed concern that the scheme will disproportionately impact their businesses, in terms of administration and compliance.

Smaller retailers also stress they don’t have the same financial resources or infrastructure as supermarkets to install the machinery, known as reverse vending machines - sophisticated pieces of equipment that can identify customers’ drinks containers and refund deposits once the container has been scanned and validated. Importers and manufacturers also have to consider producer fees as well as the administration costs.

One issue our drinks sector team will be advising clients on is their obligations under the new Deposit Return Scheme for Scotland Regulations 2020, which will depend where they sit in the supply chain. At an early stage, we have looked after clients’ changes to agreements with customers, or changes to terms and conditions to allow for additional information, particularly on the reporting side, as a big part of the scheme will entail keeping track of bottles that go into circulation to enable the Scottish Government and SEPA to monitor the operation and impact of the scheme.

Most producers will need to understand not just their legal obligations, but also to what extent they should pass costs onto customers. We have conducted a detailed analysis of specific issues for clients set to be affected by the DRS, including the basic obligations to Circularity Scotland, the body responsible for the smooth operation of the DRS, and the legal requirement to accept returns of empty drinks containers, as well as paying the deposit on drinks sold.

It remains to be seen whether the scheme is implemented in August without further delay, but our advice to clients is to assume it will go ahead as planned and prepare accordingly.

Our team will work closely with clients over the coming months to ensure they are fully informed of any developments and can navigate matters as smoothly as possible.

Colin Millar is a Partner, Wright, Johnston & Mackenzie

Prepare as best you can for the Deposit Return Scheme - Colin Millar