Supermarkets, producers and reverse vending machine manufacturers are said to be among those lining up claims for “huge” compensation in the event of the UK’s first deposit return scheme being axed.
Sources told The Grocer there was growing anger over the uncertainty surrounding the scheme after it emerged Circularity Scotland Limited, the scheme administrator, would run out of money by the end of this month if the UK government failed to grant an exception under the Internal Market Act for it to go ahead.
The revelation has thrown the entire future of DRS into doubt after the rollout in Scotland was delayed until next April by the Scottish government last month.
Scottish first minister Humza Yousaf has admitted he expects businesses to demand tens of millions in compensation if the UK’s first deposit return scheme is declared unviable next week.
Yousaf told the BBC the UK government had put him in a “really difficult position”.
“If we don’t get it [an exemption] this month we have been told by Circularity Scotland that the scheme could be unviable.
“There’s no reason for the UK government not to grant that exemption. They are playing politics with what is the climate emergency.”
Asked if the Scottish government would compensate businesses who have already prepared for and spent money on the scheme, he said: “If the UK government ends up pulling the plug on the scheme because they don’t give the Internal Market Act exemption, then I wouldn’t be surprised at all if companies are asking for compensation.
“And I think the UK government would have a real challenge on their hands.”
A source told The Grocer: ”I would expect businesses, and that includes retailers, producers and also manufacturers of the machinery needed for DRS, to be looking at the issue of compensation. They are going to be pretty aggrieved at the situation having spent huge sums preparing for the rollout.”
The new threat of compensation comes after The Grocer revealed last month that companies who have spent tens of millions paving the way for the scheme were calling for financial recompense after the plans were shelved for a third time.
Last week Mark Brill, VP of sales and marketing at Tomra, said his company had spent millions supplying hundreds of reverse vending machines to retailers across Scotland, adding: “We have hundreds more sitting in our warehouse yet now we are told the scheme may not be viable.”
The Scottish Conservatives have accused Yousaf and Scotland circularity minister Lorna Slater of trying to pass the buck for their failure to handle DRS onto the UK government.
However, environmental groups have called for prime minister Rishi Sunak to intervene.
Greenpeace, Keep Britain Tidy and the Marine Conservation Society have signed an open letter to the PM demanding the UK government grants an exemption for DRS in Scotland under the Internal Market Act .
Meanwhile the Scottish Grocers’ Federation, at whose summit the doubts over DRS emerged, called for the Scottish government to step in to ensure businesses were not left in the lurch.
“It is vital the Scottish government confirms urgently that it will support industry and in particular CSL to ensure preparations can continue unabated, whilst it concludes agreement with the UK government on the Internal Market Act and all other outstanding issues,” said SGF CEO Pete Cheema.