Small brewers left on the hook over incoming Deposit Return Scheme
Today marks one year before the Scotland Government intends to launch the Deposit Return Scheme (DRS) and Scottish small brewers face too many unanswered questions to start preparing.
Independent brewers were hoping for clarity today as the scheme administrator, which will run DRS, announced the producer fee – a key element of the costs for small brewers. Its announcement will add at least 10 pence to the shelf price of a bottle of beer in addition to the 20 pence deposit. This will be a very unwelcome addition to the costs that hard pressed consumers are already facing and is worse as it is being caused as a direct result of the Scottish Government actions.
SIBA’s Scottish Director Jamie Delap said “Independent brewers supplying Scotland have told us that they will either stop selling in Scotland or reduce their brands. This means that Scottish consumers face a dramatic fall in choice as well as significant price increases as the cost of living crisis continues.”
In addition to the producer fee announced today, the scheme administrator also announced that producers would have to pay 2.4 months of deposits and producer fees immediately prior to the start of the scheme. This could mean that small brewers will have to find in the order of £1.5 million to fund the scheme at a time when they still have substantial debts from COVID and are struggling with huge increases in energy and other costs.
Other important elements remain unanswered such as how the online takeback service – where empty containers are collected by people’s doorsteps – will work or how it can be delivered. Currently, there is no way for any retailer to continue selling beer online under DRS. Serious questions also remain over VAT and labelling.
“Scottish brewers have been trying to make the plans for DRS to work, but as its currently designed it represents an existential threat to small independent brewers,” continued Jamie Delap. “We need the Scottish Government to reconsider their plans otherwise this scheme will not achieve what everyone hopes it will nor help us to reach Net Zero.”