We wrote last week about the First Minister delaying the implementation of the Deposit Return Scheme ("DRS") to 1 March 2024. That statement included reference to a "package of measures" to "simplify and de-risk the scheme". After that piece was finalised, the Minister in charge of the scheme (Lorna Slater MSP) announced a number of changes to the DRS. Ms Slater's full statement to the Scottish Parliament is available here. The detail of the changes is still awaited, but they have been summarised as follows.
Small containers
All drinks containers under 100ml are now to be excluded from the DRS. In particular, this will result in miniatures being removed from the scheme.
Low sales volumes
Products that sell fewer than 5,000 units per year will also be excluded from the scheme. However, this change will apply only to the product, rather than the producer – i.e. the 20p deposit will not need to be charged on the product in question, but the producer will still need to register under the scheme even if all of its products sell below that 5,000 unit threshold. This presumably means that registration will still be required for their products to be capable of lawful sale, even if the producer chooses not to apply the deposit (it being possible still to 'opt in'). Large producers with a product that sells less than 5,000 units per year will also not need to apply the 20p deposit to that particular product (but again might choose to do so, for example if that would be administratively easier).
Hospitality retailers
Hospitality premises that sell scheme articles exclusively for consumption on the premises are already exempt from the obligation to act as a return point. This is to be extended to cover retailers that sell "the large majority of their drinks products" for on-premises consumption. The Minister stated that the Scottish Government will be engaging with the hospitality sector to decide where the threshold should be set.
Exemption application procedure
The Minister stated that the online process for retailers to seek exemptions from operating a return point, via Zero Waste Scotland, has been simplified.
Producer Agreement
The Minister also disclosed that she had asked Circularity Scotland Limited, the scheme administrator, to develop a short-form producer agreement to address concerns over the existing agreement's size and complexity. As we mentioned in our previous post, producers who had already signed up with CSL can seek legal advice if they are concerned about the producer agreement making them liable for any of the costs of the delay.
The above changes will now need to be turned into amendments to the Regulations, alongside the previously announced changes to the takeback service obligations on online retailers. We will be reviewing those amendments carefully when they are published as, to use the cliché, the devil will be in the details. In the meantime, businesses should stay alert for further changes (on which we will produce further insights) and pursue whatever opportunity there may still be to secure additional changes to remove or mitigate the difficulties they can foresee with the scheme as currently drafted. They should also keep a close eye on the still-live question of whether the DRS will secure an exemption under the Internal Market Act (an issue that has featured prominently in the political blame-game over why the scheme has been delayed) and subject to that use the delay to get ahead of the new deadlines of 12 January 2024 (for producer registration) and 1 March 2024 (the delayed go-live date).
For any assistance in relation to the Deposit Return Scheme, please get in touch with Charles Livingstone, Grant Strachan or your usual Brodies contact.
