MAJOR changes have been announced by the Scottish Government to the controversial deposit return scheme.

Ministers believe the new measures will see almost half of businesses, some 44 per cent, including many in the craft drinks sector exempt.

Under the initiative, a 20p deposit will be added to the price of drinks in cans and bottles which will be repaid to the consumer when they are returned to a retailer but the scheme came under fierce criticism.

It was described by a former Scottish Government minister this week as "a Green poll tax" which would hit struggling households amid the cost of living crisis.

The changes were unveiled by circular economy minister Lorna Slater in Holyrood today and follow a delay, announced on Tuesday, to the introduction of the initiative, which had been due to be launched in August. It will now get underway in March next year.

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Businesses, opposition parties and some SNP MSPs were among the groups who had previously raised substantial concerns. Former finance secretary Kate Forbes, who was narrowly defeated in the SNP leadership race by Humza Yousaf, warned during the party's contest that the bottle recycling scheme would cause "economic carnage".

This afternoon Ms Slater said craft drinks producers and pubs that provide off-sales will be among those that will benefit from the rethink.

She added the changes would make it easier for retailers to prepare for the scheme's introduction, while making sure environmental benefits are delivered.

The minister repeated her call on the Conservative Government to issue an exclusion for the scheme from the Internal Market Act, legislation brought in following Brexit designed to ensure a level playing field across different parts of the UK and ensure businesses complied with the same standards.

The changes announced to the deposit return scheme are:

  • drinks containers of under 100ml will be excluded, removing miniatures and other smaller containers from the scheme
  • products with sales of fewer than 5,000 units per year will be excluded, which will particularly benefit businesses in the craft sector
  • all hospitality premises that sell the large majority of their drinks products for consumption on the premises will be exempt from acting as a return point
  • the online application process for retailers to apply for an exemption from providing a return point has been simplifed.

Ms Slater said: “Scotland’s deposit return scheme will reduce litter on our streets, massively increase the recycling of drinks containers and help meet our net zero ambitions.

READ MORE: Deposit return scheme boss not told of delay before Yousaf statement

“However, to realise these benefits DRS needs to be delivered in a way that works for businesses, especially for small drinks producers. The changes I have set out will make the scheme easier for industry to deliver – especially for craft producers – while still making sure the vast majority of drinks containers are captured for recycling.

“To move forward with certainty, the UK Government must stop delaying the long overdue exclusion from the Internal Market Act. This damaging Act was imposed on the Scottish Parliament after Brexit without its consent and creates confusion and uncertainty for businesses.

“After that Act was passed, we engaged in good faith, following the agreed process, and have done so for nearly two years now to agree an exclusion. The UK Government needs to at long last issue an exclusion, and recognise the right of the Scottish Parliament to enact legislation in devolved areas without interference.”

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Changes to Scotland’s the scheme are subject to approval of the Scottish Parliament.

The current deposit return scheme regulations include all drinks from 50ml to 3 litres and place no lower limit on the volume of sales to qualify for the scheme.

Introducing a threshold of 5,000 units per year will remove many craft drinks and limited edition products.

It is anticipated that this change will only remove around 0.5 per cent of articles from the scheme but will remove the need for around 44 per cent of businesses to apply a deposit to their products.

The Scottish Government is to speak with hospitality businesses on the proportion of sales at which the hospitality measures will apply, to ensure a balance between support for businesses and accessibility for consumers.

Drinks producers will have until 12 January 2024 to register for the scheme.

Colin Smith, chief executive of the Scottish Wholesale Association (SWA), weclomed the changes.

He said: “One of our aims, and we have been pushing for this since 2019, has been to have a de-minimis approach to ensure wholesalers putting small volumes of a product onto the market aren’t hit hard by DRS and to protect the consumer choice in hospitality and speciality retail, where such products are primarily sold.

“We were extremely pleased that our ongoing engagement with the circular economy Minister resulted in her announcement today of a de-minimis for all products below 5,000 unit sales.

“While we await the full detail of the de-minimis, I personally thanked the First Minister and Lorna Slater in a face-to-face meeting they held with industry late this afternoon.

“This will not only help our wholesalers and smaller producers, but also reduce the numbers of producers Circularity Scotland has to deal with, thereby simplifying and de-risking Scotland’s DRS.”

Maurice Golden, the Scottish Conservative MSP, said: “The SNP and their Green partners have constantly missed their targets and put constitutional grievance above the environment.

"The SNP have been talking about this since 2009, before finally getting round to introducing regulations and setting a launch date of April 2021. Then we had one delay, followed by another, and then this week – with Lorna Slater having lost control of the scheme – the First Minister had to step in and announce yet another delay.

“Previously, Lorna Slater said that ‘no one with any credibility’ would delay the scheme again and that to do so would be a ‘kick in the teeth to industry’.

“But the minister has made such an almighty mess of this scheme that she has now had to effectively re-write it.

"Today’s changes are welcome, but they should have been made months ago. Businesses can’t have confidence in a scheme that sees continual delays and massive changes at the last minute.

“It just proves this scheme isn’t industry-led. The Scottish waste sector has been excluded, small businesses are excluded from membership of the scheme administrator, and in any case, Donald McCalman from Circularity Scotland said today ‘We are not running the scheme. I think that is an important misconception to address’.

“Even now, the minister was unable to give a clear answer to a simple question about whether registered producers would be liable for advance months payments during this delay.”

In Holyrood today Ms Slater blamed delays over the scheme on the UK Government not providing an exclusion to the Internal Market Act (IMA) and comments made by Scottish Secretary Alister Jack.

"The primary cause of this has been the uncertainty created by the continued failure by the UK Government to issue an IMA exclusion," she told MSPs.

"Together with public briefings against the scheme from the Secretary of State for Scotland, the effect has been corrosive, undermining confidence, stalling progress, halting private investment.

"Some businesses have said that they will simply not join the scheme because of the UK Government's position, and there has been extensive feedback from industry that they are not willing to proceed with investments until they have clarity."

Responding to Ms Slater, a UK Government spokesman said: "Ministers only received the formal request for a UKIM Act exclusion for the Scottish Government's Deposit Return Scheme on 6 March 2023.

“The Scottish Government has since been reviewing and has now paused the scheme, so it has not been possible for us to fully assess the impacts of the exclusion request on cross-UK trade, businesses and consumers.

"We will continue to engage with the Scottish Government to understand the outcomes of their review and will work together to realise our shared ambition to improve the environment while meeting the needs of consumers and businesses across the UK."