An industry organisation representing late-night venues across Scotland has told its members to ignore a mandate to sign up for the deposit return scheme, saying it will "inevitably lead to significant numbers of business failures and job losses".

The Scottish branch of the Night Time Industries Association (NTIA) said that while being supportive of government aims to increase recycling, it cannot support the implementation of the DRS as currently planned. Designed with "no thought or consideration given to the operational concerns of thousands of Scottish SMEs", the scheme is "completely unworkable for the vast majority of small businesses in the hospitality sector".

The NTIA said it is "simply untrue" for the Scottish Government to suggest that the scheme is comparable to those elsewhere.

READ MORE: Scottish Government 'fails to understand' return scheme concerns

"The proposed DRS in Scotland is one of the most complicated, costly, inefficient, and badly-designed schemes in the world," the NTIA said. "It is also untrue for ministers to suggest that this scheme will be paid for by producers under a 'polluter pays' principle.

"Scotland's DRS adds cost and complexity at all levels of the supply chain, which will all ultimately be passed on to consumers in the price of the everyday products we all buy."

The NTIA estimates that for the typical small business, the DRS will cost between £3,000 and £5,000 in advance set-up and infrastructure costs and result in a further permanent cashflow deficit of up to £5,000 per premises.

Furthermore, the exclusion of crushed cans and bottles will result in an "unacceptably high percentage" of deposits failing to be redeemed, leading to substantial and on-going financial losses.

READ MORE: Business owner speaks out on bottle return scheme: 'We are flailing'

Noting that all three candidates to be the next First Minister have expressed a desire to either scrap, delay or amend the scheme, the NTIA added that Scotland's DRS does not currently have exemption from the UK Internal Markets Act, which is meant to ensure a level playing field for trade across the UK. Westminster has warned that such an exemption may not be granted due to the Scottish scheme creating trade barriers and restricted market access for thousands of small producers and importers.

As such, the NTIA said it "is little short of reckless and negligent for government to ask businesses" to invest in something that "may well be unlawful". 

"And it is, regrettably, also why the NTIA is today issuing a recommendation to our members and the thousands of businesses in the night time economy across Scotland not to sign any agreement with [scheme administrator Circularity Scotland] to participate in the scheme at this time."

The sign-up window for hospitality and retail businesses opened on March 1. The DRS is currently due to go live in Scotland on August 16.