TRUDY MORRIS: We can't just kick the 'can' down the road on DRS
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Trudy Morris, chief executive of the Caithness Chamber of Commerce, says the Deposit Return Scheme needs to be made workable for businesses
The new first minister has faced a hefty in-tray of issues upon his appointment to office last month, and his commitment to “always having an open-door policy for our business communities” will be eagerly watched by many.
Particularly, when recent findings, published in the Scottish Chambers of Commerce quarterly economic indicator, highlighted increased concern from businesses on current and future regulatory burdens including the deposit return scheme; short-term lets; alcohol advertising; tourism visitor levy and rent controls – to name but a few.
Recent announcements made by Humza Yousaf to delay implementation of the deposit return scheme (DRS) and re-address the excessive proposals to restrict the marketing of alcohol brands are welcome news.
This is a positive first step from government to addressing a constructive relationship with the business community – however, concerns rightly remain strong.
In its current format the new Scottish DRS legislation will now be implemented across Scotland on March 1, 2024, imposing significant compliance obligations on retailers, wholesalers, producers and importers of drinks in Scotland in single-use glass, metal and PET plastic containers.
The scheme is an example of extended producer responsibility, whereby businesses are given significant responsibility, financially and physically, for the treatment and disposal of post-consumer products. The vast majority of businesses selling drinks will soon be legally required to also operate a return point where customers bring back their empty containers in return for their initial 20p deposit.
The Scottish Government hopes by incentivising positive behavioural change the DRS will improve recycling rates and reduce litter as well as helping to tackle climate change through carbon savings. As a nation, we currently recycle just half of all containers – the DRS’s ambition is to increase this to 90 per cent. As recycling is more energy efficient than making new aluminium, glass or plastic, the DRS projects that it will reduce emissions by 4 million tonnes of CO2eq over the next 25 years.
At the beginning of March, only 664 companies were reported to have registered for the scheme. These companies largely represent Scotland’s biggest drinks producers and are responsible for 95 per cent of drinks sold in single-use containers in Scotland.
However, covering only 16 per cent of all producers selling drinks across the country, this has been widely criticised seeing the deadline for registration closing with fewer than one in five producers registered. It has been loudly voiced by the business community that, in its current form, the scheme is unworkable and is adding unnecessary cost pressures at a time when many businesses are struggling to survive in the face of rising cost pressures and high inflation, and many still in a position of fragile economic recovery post-pandemic.
Calls to pause and redesign the scheme have until now been completely ignored, leaving many in the business community justifiably frustrated.
With the best of intentions, of course, we must work together to tackle the issues of recycling and waste and the business community is determined to play its part in driving sustainability, but the DRS scheme needs reworked otherwise the "can" is simply kicked down the road for another 10 months.
For businesses producing alcohol, recognition from the first minster of serious industry concerns regarding proposed marketing and advertising restrictions is also welcome news. Within the current proposals businesses could see a ban on branded merchandise, such as glassware, apparel, and accessories. These products are often the very things that many independent distilleries and breweries often rely on retailing in their shops and visitor centres and make up a crucial part of their revenue and visitor experience.
Although admirable in its intentions to reduce negative impacts of alcohol on young people, this counter-intuitive business measure would be sure to have a negative impact on the Scottish Government’s own target to double the food and drink sector’s turnover by 2030. It is welcome to hear the government is committed to working together with industry and public healthcare stakeholders to establish a new set of proposals, which the first minster himself expressed “made without undermining Scotland’s world-class drinks industry or tourism sector”.
In the north Highlands, it’s clear the impact of legislative measures will be felt across the food, drink, retail and hospitality sectors. Businesses will be forced to spend time, money, energy and resources implementing huge operational changes to allow for the DRS.
Working alongside Scottish Chambers of Commerce (SCC), Caithness Chamber of Commerce will be providing business case studies that illustrate the financial and operational impact that the Scottish DRS will have on firms in its current form and what changes they need to see to make it workable. This will be presented to the new cabinet secretary for the economy, Neil Gray MSP, by SCC’s chief executive Liz Cameron.
As the first minister signals a willingness to reset the relationship with business, we in turn stand as a Chamber network ready and willing to work constructively with the Scottish Government to support the development of a globally competitive and world-leading economy for Scotland.
