The Scottish Deposit Return Scheme (DRS) has come under fire once again, this time from the Scottish Grocers’ Federation (SGF) which has warned that it could lead to the closure of thousands of small stores.

The trade body has reiterated its support of DRS in principle, however with less than six months to its implementation date in Scotland (16 August 2023), SGF has warned that the current scheme does not provide a fit for purpose offering for consumers or small retail businesses.

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.

Citing a parliamentary statement by the Minister for Circular Economy Lorna Slater earlier this month, the SGF accused the government of failing 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.

The retail trade body sent a paper to Slater on 27 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.

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.

These issues include: changing of payment terms for return point operators from seven days to 18 which SGF warns will cause significant cash flow issues; the length of time it takes to process an appeal (28 days to review and then a further 14 days before payments may be made) and the complexity of the exemptions process

Cheema added that the industry was extremely concerned about DRS and its implications.

“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,” he said. “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.”