Is Scotland ready for the deposit return scheme?

20 March 2023 by

Scotland is leading the UK in adopting a deposit return scheme for single-use containers, but operators have concerns about the extra 20p charge and passing it on to customers

From 16 August, Scottish hospitality operators will have to pay a 20p deposit for every single-use drinks container consumed on-site. It will form part of the nationwide deposit return scheme (DRS), the first to be implemented in the UK, which aims to see an additional 76,000 tonnes of material recycled each year.

Under the DRS, any container made of PET plastic, steel, glass or aluminium will have to be safely stored on hospitality premises and collected for recycling by the scheme administrators, Circularity Scotland (CSL).

The programme, which is being spearheaded by Scotland's circular economy minister, Lorna Slater, has been designed to capture 90% of registered containers for recycling and aims to cut carbon emissions by four million tonnes of CO2eq emissions over the next 25 years.

However, industry figures have expressed serious concerns that the scheme lacks clarity. Colin Wilkinson, managing director of the Scottish Licensed Trade Association (SLTA), told The Caterer: "Among the whole industry, I think most people are of the opinion that the DRS is really not fit for purpose at the moment. There's lots of questions unanswered, there's confusion about how this system's actually going to work, and a lot of people don't even understand the very basics of it."

Registration for producers closed on 28 February, following the announcement on 21 February of a £22m support package to reduce some of the up-front charges.

Hospitality businesses were asked to register from 1 March and, with less than six months to go until the official launch date, they are running out of time to prepare.

"There will be a few things we need to sort out collectively"

Donald McCalman, programme director of Circularity Scotland, told The Caterer that the scheme is due to go ahead on 16 August with "no shadow of a doubt", despite calls from the industry to postpone. The DRS had already been delayed in July 2022 due to the pandemic, and CSL – a not-for-profit organisation – believes the programme has "huge momentum" now from consumers and those attending its workshops and road-shows.

He said: "No one is expecting this to be perfect and no one is expecting every business to be perfectly ready. It's going to be a reasonably good launch, but there will be a few things we need to sort out collectively."


Leon Thompson, chief executive of UKHospitality Scotland, said that though his organisation is consulting with member and non-member businesses for the DRS, there is only so much that trade bodies can do to appease operational concerns without access to a full blueprint of the scheme. "The ball is very much in the court of CSL to come up with further information," he said.

He added: "Everybody says it's a cost-neutral scheme because money goes round in a circle, [but] businesses still have to come up with all those deposits first time round, and then they essentially never get that money back because they spend that on deposits.

"Hospitality venues will have to decide whether they are going to absorb the additional cost on drinks or whether they are going to pass those costs onto consumers."

Stephen Montgomery, spokesperson for Scottish Hospitality Group, said: "When this goes live, a case of 24 of any type of drink is going up by a minimum of £4.80 for the deposits. You will then have all the producer fees, all the handler fees, so you will probably see between 20 and 40 pence extra on every single can and every single pack.

"Your case could be going up by £8-10 overnight. Is that the right thing to do when we are right slap bang in the middle of a cost of living crisis, when every penny under a consumer's pocket is under lock and key?"

On top of rising costs, operators are particularly worried about potential imbalances in cash flow while waste collection cycles are in flux. The CSL website revealed that the deposit payment process begins "when the containers collected have been processed at the counting centre", but it did not specify lengths of time. It added: "Collection frequencies will be adjusted to meet demand and ensure efficient operation as the system beds in."

Storage space limits

The collection process timeline will also impact the amount of storage space available for hospitality businesses. Nick Stewart, managing director of Sneaky Pete's, a small nightclub venue in Edinburgh, said: "We have capacity for 100. We have a very small cellar and no extra storage space. Nightclubs and bars – especially in the city centre – have to use every square foot to make sure they make enough money to stay in business."

Under current regulations, crushed cans cannot receive the 20p deposit, which adds another burden to venues that are already tight for space. "If we can't crush the cans, we're going to be in a lot of trouble here," he added.

Meanwhile, Louise Maclean, business development director at Signature Pub Group, which operates over 20 bars, restaurants, and hotels across Scotland, is apprehensive about the timing of the launch.

She said: "16 August is right in the middle of the Edinburgh Festival, so delivery schedules are totally screwed when the festival is on. The population of the city more than doubles, everyone is under pressure for waste collection, so the start date couldn't have come at a worse time."

"On 16 August they're just going to close the doors. They can't make it work"

Maclean was also keen to stress that the industry's disapproval of the DRS should not be conceived as a dismissal of urgent environmental concerns. "Not one hospitality business I know of is questioning the principle of the scheme, but this scheme in its current guise [has] so many unanswered questions."

She added that she knows of many businesses – especially small breweries – that are only going to trade until 15 August. "On 16 August they're just going to close the doors. They can't make it work."

Operators like Russell Imrie, managing director of Queensferry Hotels, which owns Best Western Plus Keavil House hotel in Dunfermline, has called on the Scottish DRS to align itself with the rest of the UK. England and Wales are seeking to implement the scheme in October 2025.

He said: "Scotland should not be introducing a system which is completely different from the other areas of the UK. We should have a UK-wide uniform system that the industry has agreed to implement in tandem."

A spokesperson for the Scottish government said: "We understand that this is a big change, especially for smaller businesses, and we have always said that we are committed to a pragmatic approach to implementation."

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