Campaign for Pubs

Campaign for Pubs calls on First Minister to pause and revise Deposit Return Scheme that will be a disaster for small breweries and reduce consumer choice

The Campaign for Pubs has written to the new First Minister of Scotland, Humza Yousaf MSP urging him to pause the roll-out of the Deposit Return Scheme, due to commence in August, as it is deeply flawed in favouring huge corporations and will seriously damage the craft beer scene in Scotland and reduce choice in Scotland’s pubs.

Small drink producers, including brewers, and importers have made clear the costs are prohibitive and will force them to exit the Scottish market and may face going out of business. Acknowledging the concerns over the controversial scheme, Humza Yousaf committed during the SNP leadership campaign to exclude ‘small businesses’ for the first year. Mr Yousaf made the commitment on BBC One’s Sunday with Laura Kuenssberg on February 26th. Now the Campaign for Pubs are asking the First Minister to pause the roll-out of the scheme and revise it, so it works for small brewers and other smaller producers and also for pubs and consumers. The Campaign for Pubs letter is here.

The proposed Deposit Return Scheme (DRS) will see a refundable 20p deposit added to all drink cans and bottles sold in Scotland from August 16th this year. Brewers have to pay the 20p per container, plus a producer fee per container and all but the smallest microbreweries (with a turnover of £85,000) have to pay an annual registration fee of £360 per year, all costs which smaller brewers will struggle to meet, on top of the pressures of other rising costs and the cost of living crisis. There will also be the cost of changing packaging to denote the new scheme and brewers will also have to maintain records of all packaged product sold. Under the Scheme it will be an offence to sell containers without being registered or to fail to provide correct information or fail to inform them of changes in circumstances.

The overall impact of the scheme will have a hugely detrimental impact on Scotland’s craft brewing sector, with some breweries saying that it will push them out of business. It will also harm pubs, reducing choice of product available to both publicans and consumers alike.  Pubs, as well as brewery taprooms and shops selling takeaway beer (and other drinks) have to accept returned containers.

It will also see small brewers and producers from England and Wales (and other countries) take the decision to no longer supply packaged product to Scotland, which will further reduce the choice available to Scottish pubs, bars, clubs as well as to Scottish beer drinkers. There is also concern that the Scottish scheme will differ from planned schemes in the rest of the United Kingdom, which will cause chaos for smaller brewers and other small producers. The deadline for producer sign-up has already passed, with many fewer producers having registered than the Government expected, with some brewers and other smaller drinks producers deciding to exit the Scottish market for packaged product rather than be hit with the unfair costs and bureaucracy of the flawed scheme.

The Campaign for Pubs makes clear that it – and small brewers and pubs – fully support recycling and points out that  pubs and breweries have long been recycling and do routinely encourage consumers to recycle packaged product and will continue to do so.  Smaller brewers are disproportionately more likely to package into fully recyclable containers, like aluminium cans, in the first place, yet it is precisely these businesses – not global beer producers – that are being stung by the new DRS scheme.

The Campaign for Pubs supports calls for registration and producer fees to be based on the size od the brewer/producer, rather than the clearly unfair and damaging blanket fees currently proposed, that will destroy small businesses and favour huge producers including global brewers, that can absorb the costs and bureaucracy and adapt much more easily. High volume producers will see disproportionately lower additional costs transferred to customers, giving them an additional competitive edge.  It is no surprise that the Scottish DRS is welcomed by Coca Cola, Pepsi, Barr et al, because it disproportionately and anti-competitively loads costs onto smaller producers and will force a reduction in Scottish consumer choice for packaged drinks (non-alcoholic as well as alcoholic).  It is no wonder the big producers are singing the praises of a system which will inevitably increase their market share.  By the same token, Scottish DRS hands a recycling monopoly to a waste company owned by a US private equity firm, without regard for the longevity of smaller waste recycling businesses, something that is deeply questionable and troubling.

The Campaign for Pubs is urging the First Minster and the Scottish Government to listen, to pause the roll-out of the flawed DRS scheme and properly engage with stakeholders including Scottish small brewers, publicans and the organisations who represent them.

Morag Douglas, Scottish Spokesperson for the Campaign for Pubs and licensee of the Star, Burntisland said:

“Scotland’s pubs, small brewers and other independent drinks producers will all be badly hit by the flawed Scottish Deposit Return Scheme, which is clearly unfair as well as damaging to the very businesses the Scottish Government should be supporting. Pubs and small breweries have long championed recycling, but to impose significant new costs now, on top of rising prices and the cost-of-living crisis, is just appalling.

“It is small independent breweries that will be hit with prohibitive fees and bureaucracy, which will both devastate the very important craft brewing scheme in Scotland but will also reduce choice for Scottish consumers and choice for pubs and bars to sell.  We welcome the commitment by the First Minister to exclude small businesses for the first year, but what is really needed is for the scheme to be redesigned, with fees reflecting the size of brewers and other producers. We urge the Scottish Government to listen and act”.

Phil Saltonstall, Brewer Coordinator of the Campaign for Pubs and a founder of Brass Castle Brewery said:

“Many other countries already have deposit return schemes and a wealth of good practice and lessons learned are available to help in the implementation of this policy.  DRS exists in many jurisdictions and is the right policy for our time, but couldn’t be realised in a worse manner than the Scottish proposed scheme due to go live in August.

“The few winners from Scottish DRS appear to be large industrial drinks producers and one large recycling company, who are delighting in the sweeping away of SME competition.  What is particularly shocking about the current proposed DRS scheme is the way it hugely favours larger producers, vendors and recyclers who as an opportunity to power grab and remove competition in the midst of a cost of living crisis.  This cannot be the intention, nor what the Scottish Government wants to see.  But without change, this is exactly what will happen.”