Circularity Scotland has unveiled £22m of cashflow support measures to help the country’s brewers, distillers, importers, and drinks manufacturers prepare for the introduction of the deposit return scheme.
The package includes:
- Up front charges removed for lower sales volumes.
- Improved payment terms for lower sales volumes.
- Simple labelling option for niche products, alleviating administrative burden.
The support package is particularly designed to help SMEs, who have previously voiced concerns about the impact of the scheme on their business’ cashflow.
To address these concerns, Circularity Scotland is removing the day one and month one charges for all producers, 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.
The three million unit threshold has been established to ensure that the thousands of smaller scale producers selling in Scotland benefit more proportionately from the cashflow support. This will particularly help companies like craft brewers, wine importers and craft spirit producers. The two month credit terms will be made available to all producers, regardless of their size, ensuring all producers within the scheme are treated equally.
Circularity Scotland has also confirmed that it will be offering the option to use self-adhesive barcode labels for producers placing less than 25,000 units per year of a specific product on to the Scottish market.
David Harris, Chief Executive of Circularity Scotland said: “This announcement is further evidence of how we are continuing to innovate and identify additional ways to mitigate the pressure on businesses. We know that smaller producers in particular have been concerned about the cashflow impacts of the scheme, and these measures will address those concerns.”
He added: “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.”
Circular Economy Minister Lorna Slater said: “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 cash flow 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.”
In response, the Scottish Wholesaler Association, said: “We’re pleased Circularity Scotland and the Scottish government have listened to our concerns about the cash flow issues facing businesses. However, many concerns remain unanswered around price-marked packs, GS1-compliant barcodes, bonded warehouses and other issues.
“SWA will continue to push for an 18-month grace period to allow those small producers/importers to prepare for DRS as well as for a de minimis exemption for low volume products.
“There are still too many unanswered questions for producers and importers to sign up to the DRS in a week’s time. The 28 February deadline must be shelved in writing by the Scottish government so businesses across the supply chain still have the confidence to keep trading in Scotland.”
