The overwhelming majority (96%) of small independent brewers in Scotland are unprepared for the Deposit Return Scheme due to be introduced next year, according to a new survey by the Society of Independent Brewers.
The new Government recycling scheme due to be introduced in July 2022, known as the Deposit Return Scheme (DRS), will see a refundable deposit added to every bottle and can sold in Scotland as well as hefty enrolment and administration fees for independent businesses and breweries.
Although broadly supportive of the scheme there are concerns about its costs and impacts, with 77% of small independent brewers expecting to sell less beer in bottles and cans and two thirds intending to reduce their range of beer available, hitting consumer choice in Scotland.
This comes as the Cabinet Secretary Michael Matheson is due to update the Scottish Parliament shortly on his review of the go live date of DRS. Small brewers are calling on him to adopt a stepped introduction of the ambitious scheme and to review the inclusion of internet sales.
A stepped introduction would allow Global producers to deliver the scheme first and delay it for small businesses providing them with much needed time to recover from Covid-19 which has seen small brewers lose 10 years of growth and accumulate debts of around £30,000 each.
Under DRS, small brewers selling beer in cans and bottles face significant changes and costs including labels, new fees and charges costing thousands of pounds. Cash flows could be hit by having to pay these fees and the deposits up front to the Scheme Administrator.
It would also require small companies to provide a takeback service for online sales, which have become essential during the pandemic. According to the survey, 90% of small brewers now have an online shop which provide around a quarter of their total sales. For some brewers up to 75% of their sales are now online.
Under DRS, small brewers are expected to provide a way for empty containers to be picked up from people’s homes though a takeback service, even though the vast majority will be returned to local shops directly. Small brewers lack the technical resources to make the changes work, no guidance has yet been provided and the costs of returning containers could be higher than the beer itself.
SIBA Scotland Director and Managing Director of Loch Lomond Brewery Fiona MacEachern said: “Small independent brewers in Scotland have been hit hard by the pandemic, with pubs closed and sales restricted they have been running on empty for some time. While DRS is a laudable scheme, small brewers just don’t have the spare cash or ability to prepare for its introduction next year. Inevitably given the costs and requirements there will be less choice for consumers and a setback for craft brewing in Scotland.”
SIBA Scotland Director and co-owner of Loch Leven Brewery Christie Slater said:
“The challenges facing the industry is why small brewers are calling on the Scottish Government to give us extra time to prepare and allow those responsible for the vast majority of containers which are most littered to go first and make the scheme work in Scotland, but also to review the online takeback requirement which is unworkable for small brewers in its current form.”
The recent survey of SIBA’s Scottish members shows that:
- 96% of Scottish small brewers are quite or very unprepared for DRS with 35% said they were quite unprepared, 61% said they were very unprepared and 4% said they were neither prepared nor unprepared.
- 77% said they expect to sell less or much less in bottles and cans as a result of DRS with 41% saying they would sell less, 36% saying they would sell much less and 23% expecting to sell about the same
- 77% say they expect to sell less or much less online, with 50% saying they would sell much less
- 2/3rds intend to reduce the range of beer available in cans and bottles, with a third saying they expect to continue selling the same.
- 90% of small brewers now have a webshop with online sales representing on average 24% of sales
Press release from SIBA