Trade bodies pull support for DRS company Circularity Scotland

Three trade bodies that backed the company set up to run Scotland’s Deposit Return Scheme (DRS) have withdrawn their support saying they have lost confidence in the venture.

Not-for-profit organisation Circularity Scotland was set up by the drinks industry to help businesses handle the financial and logistical aspects of the DRS and to ensure they complied with the scheme.

It confirmed yesterday that it is facing an uncertain future after wrangling between the UK and Scottish governments meant it was put on hold until 2025 at the earliest.

The British Soft Drinks Association, British Beer and Pub Association and British Retail Consortium have today confirmed that they no longer have confidence in the organisation and will not provide it with any further funding.

“Our members have collectively invested significant time and tens of millions of pounds in good faith to help establish a scheme administrator in Scotland to meet a deadline originally set by the Scottish Government,” they said in a joint statement.

“Sadly, a high degree of political uncertainty has now disrupted plans and timings, putting the future of Circularity Scotland at risk.

“Given this ongoing political uncertainty our members do not have the confidence required to provide further voluntary funding for the company. It is now a matter for the Circularity Scotland board to determine how it wishes to administer the company’s affairs.”

The Scottish Government approved Circularity Scotland as the DRS administrator in 2021. According to the company’s website it was “established on behalf of the industry to deliver the legal responsibilities of drinks producers under Scotland's deposit return scheme regulations”.

The scheme envisioned charging customers an additional 20p for bottles and cans of drinks, with that sum being refunded when they returned the containers for recycling.

After several delays, it was supposed to launch in August but has been shelved following a challenge from the UK Government, which said the scheme would breach the terms of the Internal Market Act by creating different trading arrangements north and south of the border.

After much to-ing and fro-ing between the two governments an exemption to the act was agreed but only if glass was excluded from the scheme. The Scottish Government said that was unacceptable and pushed the entire launch back to 2025, when the UK Government’s own scheme will launch.

A Circularity Scotland spokesperson said yesterday that the delay had impacted on its ability to “continue to operate” and confirmed that staff had been sent home on 8 June.

“The unfortunate reality is that, at this point, we are not able to confirm whether our staff will be paid for this month or whether they will be able to return to the office,” the spokesperson said.

"The board recognises that this is an extremely difficult time for our people and is working tirelessly to find a solution.

“We have remained in communication with our staff throughout and will provide updates to them at the earliest possible time.”

The company said it does not have a comment on today’s announcement at this stage.

Circular economy minister Lorna Slater, who is responsible for overseeing the DRS, said that as Circularity Scotland is not a government-run organisation the government cannot provide funding to ensure it survives.

“Circularity Scotland is a not-for-profit company led and funded by industry, and it would not be appropriate for the Scottish Government to fund it,” she said.

“Deposit Return will still go live in Scotland, and across the UK, in 2025, so it is in industry’s interest to preserve the expertise and skills that Circularity Scotland has built up.”

A UK Government spokesperson said the decision to delay the DRS was “entirely a decision made by the Scottish Government” and that Circularity Scotland’s operation “is a matter for them and the Scottish Government”.

"Earlier this year the drinks industry raised concerns about the Scottish Government’s Deposit Return Scheme differing from plans in the rest of the UK,” the spokesperson said.

“The UK Government listened and worked at pace to accept the Scottish Government’s request for a UK Internal Market (UKIM) exclusion on a temporary and limited basis to ensure the Scottish Government’s scheme could proceed while aligning with planned schemes for the rest of the UK.

“The chief executive of Circularity Scotland was categorical that the scheme remained viable on this basis and that many other successful schemes run without glass. But the Scottish Government decided not to proceed and instead further paused the scheme until October 2025.”