Deposit Return Scheme
Scottish Grocers’ Federation (SGF) today indicated that while it reaffirms its commitment to a fit for purpose, deposit return scheme (DRS), for consumers and small retail business, the present scheme fails to provide this.
This follows the recent DRS parliamentary statement on 1st March by the Minister for Circular Economy which does not appear to recognise the critical business viability issues that the many of the unresolved operational aspects of the scheme are presenting to small business and the convenience retailers who will be return point operators.
In addition, the publication by the scheme administrator, Circularity Scotland Limited (CSL), of the ‘Deposit-return Scheme-blueprint-for-retailers-and-hospitality providers’ has significantly changed the payment terms for all return point operators (RPOs) in Scotland without sufficient notice. This will mean that many businesses will face the scenario of being in financial distress while waiting for significant sums of money back from CSL.
SGF chief executive Dr Pete Cheema OBE said: “We have met extensively, for over 18 months, with both Circularity Scotland the scheme administrator, and the Scottish Government with a view to securing the guidance, clarity and support needed, to allow us to help our members successfully play their part in the scheme. To date however, there is still uncertainty around key aspects of the scheme and there is the real risk of thousands of stores closing due to cash flow issues or significant loss of footfall.
Some of the current key issues include:
Payment terms – CSL have significantly changed the payment terms for all return point operators in Scotland without sufficient notice. Many RPO’s have committed to Reverse Vending Machines (RVMs) based on 7 day payment from when scanned into the RVM’s in their stores as CSL have previously highlighted. Now, for the first time in 18 months they have been informed it will be a full month before payments are made to RPO’s at a time when they have invested 10s of Millions buying RVMs and installing them. Now many simply do not have the cash flow to cope with this very late change to maintain their business, especially the convenience industry. For manual takeback, given there is no uplift schedule it is now suggested the minimum period is two full weeks before payments are made, dependent on when product is uplifted.
Appeal process - The appeal process is wholly unreasonable, 28 days to review and then a further 14 days before payments may be made. A full six weeks later, after payments should have been made, the scheme administrator will make payments. This is unsatisfactory and will seriously impact small business cash flows.
Exemptions - The exemptions process is extremely confusing and overly complex. A proximity exemption is only available to retailers where there is another return point within 400m (which is considered to be approx. 400m as a pedestrian would travel, instead of a straight-line distance) and that return point has consented to the application for an exemption. Alternatively, they can seek an environmental health exemption but in doing so are required via an online process to upload glass policies, planning applications and send in pictures but limit to 5 megabytes. They also must be able to demonstrate that there is no reasonable way for them to operate a Return Point on their premises without breaching their obligations towards food safety, health and safety, fire safety, environmental protection, and public health. It is not clear, from a business perspective, how to advise a retailer about their options around exemptions as nobody knows the volume and capability until the collection process is published as a confirmed contract – CSL were going to deal with but now seems this has been pushed back to retailer.
Unfortunately, our plea for support was not followed through and there is a serious crisis at present, with business being required to participate in a scheme with an administrator that, in our view, is simply not listening to us.
Retailers members are pragmatic and resilient, they proved that through their exemplary service to communities up and down the country during the pandemic.
However, they are being confronted with the scenario of putting their business at risk by signing up to prohibitive terms and conditions, or stop selling drinks in Scotland which will put thousands of community stores out of business.”
SGF sent a paper to Lorna Slater on 27th February setting out, in detail, over forty outstanding issues around the scheme which still require to be addressed and have asked for a response within 14 days.