Thousands of producers will be spared from paying upfront charges for the introduction of the UK’s first deposit return scheme (DRS), in the latest effort to ease fears that the scheme will wreak havoc on the industry.
Circularity Scotland today announced a £22m package of cashflow support which it said would help Scotland’s brewers, distillers, importers and drinks manufacturers prepare for the introduction of DRS, which is due to start on 16 August.
The package is aimed at SMEs, who have previously voiced concerns about the impact of the scheme on their cashflows.
Among the new measures, the body is removing all day one and month one charges for all producers in the scheme, up to a threshold of three million units per year.
It is also providing two-month credit terms on deposits and fees up to the same volume threshold to reduce the working capital impact on all producers.
CSL said the three million unit threshold would help thousands of smaller-scale producers selling in Scotland benefit more proportionately from the cashflow support, and said it would particularly help companies such as craft brewers, wine importers and craft spirit producers.
The two-month credit terms will be made available to all producers, regardless of their size.
CSL also announced it will be offering the option of self-adhesive barcode labels for producers placing less than 25,000 units per year of a specific product on to the Scottish market, in another effort to help smaller producers.
The plans are the latest in a series of rowbacks by CSL to try to ease fears over the DRS rollout, which has also included allowing thousands of smaller retailers to opt out of the scheme amid fears over the impact of costs.
Last week, industry bodies called for an 18-month suspension of plans for the scheme, warning otherwise thousands of businesses will face chaos.
It was backed by a group of trade associations including the Scottish Wholesale Association, the Society of Independent Brewers, the WSTA, the Scotch Whisky Association and Scotland Food & Drink.
“This announcement is further evidence of how we are continuing to innovate and identify additional ways to mitigate the pressure on businesses,” said Circularity Scotland CEO David Harris.
“We know smaller producers in particular have been concerned about the cashflow impacts of the scheme, and these measures will address those concerns.
“We have already announced reductions in producer fees of up to 40%, while also being able to offer the highest return handling fees of comparable schemes anywhere in the world. These additional support measures further demonstrate our confidence in being able to deliver ongoing operational efficiencies once the scheme has gone live. We are committed to ensuring that the deposit return scheme works for Scotland, is cost-effective for business and helps protect our environment for generations to come.”
Scotland’s circular economy minister Lorna Slater added: “This is a big and welcome change that responds directly to many of the concerns that have been raised, particularly those from smaller producers like craft brewers.
“It addresses initial cashflow challenges and provides a pragmatic and simple solution to the issues raised around barcodes for smaller product lines. This is a package that gives businesses the clarity and confidence they need to be part of Scotland’s deposit return scheme.
“Over the last few months I have been meeting industry regularly to listen to their feedback, and this industry-led solution has been designed in direct response to its concerns. I remain committed to a pragmatic approach to implementation between now and 16 August. By working together, we can lead the UK in delivering a deposit return scheme which will increase Scotland’s recycling rates from around 50% to 90%, cut emissions, tackle littering and address public concerns about the impact of plastic and other waste.”
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