Circularity Scotland is offering £22m of cashflow support measures to help Scottish drink producers prepare for the introduction of Scotland’s deposit return scheme.
The support package is particularly designed to help SMEs who have previously voiced concerns about the impact of the scheme on their business’ cashflow.
Circularity Scotland is removing the day one and month one charges for all producers, up to a threshold of three million units per year. It is also providing two-month credit terms on deposits and fees up to the same volume threshold to reduce the working capital impact on all producers.
The SWA (Scottish Wholesale Association) has welcomed the announcement on the removal of upfront charges and retrospective payment terms for small producers and importers, including wholesalers.
“We’re pleased Circularity Scotland and the Scottish Government have listened to our concerns about the cash flow issues facing businesses,” said chief executive Colin Smith. However, many concerns remain unanswered around price-marked packs, GS1 compliant barcodes, bonded warehouses and other issues. SWA will continue to push for an 18-month grace period to allow those small producers/importers to prepare for DRS as well as for a de minimis exemption for low volume products.
“There are still too many unanswered questions for producers and importers to sign up to the DRS in a week’s time. The 28th February deadline must be shelved in writing by the Scottish Government so businesses across the supply chain still have the confidence to keep trading in Scotland,” he added.
Read more: SWA warns Scottish government to make urgent DRS changes
David Harris, chief executive of Circularity Scotland stated: “Circularity Scotland was established by industry to meet their obligations under the deposit return scheme as efficiently and cost-effectively as possible. This announcement is further evidence of how we are continuing to innovate and identify additional ways to mitigate the pressure on businesses. We know that smaller producers in particular have been concerned about the cashflow impacts of the scheme, and these measures will address those concerns.
Circularity Scotland has successfully secured over £100m of third-party funding to establish the infrastructure of the deposit return scheme, with only minimal up-front funding from the very largest producers. This funding approach allows producers both large and small to benefit on equal terms from this investment in world-class infrastructure and leading-edge technology and only pay their share of the costs once the scheme is in operation.