Rather than becoming UK’s first-of-its-kind recycling initiative, Scotland’s Deposit Return Scheme (DRS) has become a victim of political agendas and hidden motives, Asian Trader has learnt, leaving retailers to bear the brunt of this half-baked government policy.
Scotland's DRS has now been pushed back to October 2025, in line with the rest of the UK. It was supposed to come into effect in March 2024. The decision to delay the scheme was announced on June 7 by minister for green skills, circular economy and biodiversity Lorna Slater.
In May 2019, the Scottish government revealed its design for a deposit return scheme, including the proposed 20p deposit and target materials. In May 2020, the Scottish Parliament voted to approve these regulations, establishing Scotland’s national deposit return scheme.
Two years later, UK government published its response to a formal request from Scottish ministers, under which it granted a partial exemption to the Internal Market Act which would exclude glass containers from the DRS.
UK government's move sparked a political row between Edinburgh and London. In a letter to prime minister Rishi Sunak, first minister Humza Yousaf urged to grant a full exclusion for Scotland's DRS. Giving an ultimatum of a few days to the UK for a response, he also cited that excluding glass would put Scottish businesses at a competitive disadvantage.
As London did not budge in response to his request, Slater delayed the scheme altogether for more than two years, thus putting a screeching brake on the progress made by retailers, makers and other stakeholders in this regard.
Circularity Scotland, which was appointed as DRS administrator by the Scottish government, reportedly claims the scheme has become “mired” in political differences which have obscured the environmental and financial benefits of DRS. Interestingly, Circularity Scotland was still “optimistic” it can proceed without glass.
In a glass darkly
The UK government had received a formal request for an exemption under the UK Internal Market Act for this on March 6 this year. Westminster said the exemption was being granted in “good faith” though the decision to withhold glass from this scheme did not go down well in Scotland.
Rest of the UK’s DRS does not include glass after a consultation raised concerns that mixing different glasses would lead to poorer quality glass when recycled, safety concerns for those handling the material, concerns over the weight of the material for transport, and the potential for an increase in handling costs and equipment complexity.
Noteworthy here is that the government’s decision of excluding glass from DRS in England and Northern Ireland (and now Scotland) was actually a blatant U-turn from the 2019 Conservative manifesto that promised introduction of a deposit return scheme “to incentivise people to recycle plastic and glass”.
Serious allegations are now being raised, indicating that government and businesses were hands-in-glove to safeguard their vested interest, making sure glass (and thus wine and whiskey firms) is removed from this scheme.
The word on the grapevine is that a leading Scottish Conservative Party politician, who has openly backed calls for glass to be taken out of the Scottish Government’s DRS, is a major shareholder in a whisky distillery and holds shares in a bottler company as well.
Also, there are reports that the UK government is being urged to explain the “striking coincidence” of a £20,000 donation from a trade body after changing their position over glass in deposit return schemes.
In the words of Scottish Greens environment spokesperson Mark Ruskell MSP, “We have a Scotland Office Minister who owns shares in the whisky industry, an MSP who on multiple occasions accepted hospitality from a beer manufacturer, and a party that accepted tens of thousands of pounds of donations from the wine and spirits industry.”
“All of which has been properly recorded. But it begs the very serious question- who stands to benefit from the Tories dropping their manifesto commitment to glass and why did they decide to do so at a time when we so urgently need action to protect the environment?”
Mo Razzaq from the Federation of Independent Retailers agrees that it is politics that spoiled things.
“There are concerns about communication, and the two governments should be more in partnership with detail,” Razzaq told Asian Trader.
Fed National VP Mo Razzaq near the reverse vending machine installed at his Premier Store in Blantyre (Photo: The Fed)
“Earlier there were no concerns raised by the Westminster Government. And all of a sudden, they decided to take glass out of the equation altogether! What we are now seeing is that politics got involved in this which clearly did not help at all.”
“The Westminster government did not agree that glass should be included. But they have not given any answers too to what they’re going to do with glass- which is even more disappointing. If you’re going to take glass out of the scheme, also inform what are you going to do with glass,” Razzaq told Asian Trader.
Colin Wilkinson from Scottish Licensed Trade Association (SLTA) has stated that it is hugely disappointing that DRS – something that should be a force for good – has been reduced to “a tardy political battle”.
“Businesses deserve better than this,” Wilkinson said.
Compensation
Now that all is said and done, it clearly seems a political mess as someone out there- either in UK or in Scotland or at both the places- failed to do his homework properly. Like, clarifications over regulations could have been sought earlier, way before retailers and other industry stakeholders invested in the reverse vending machines and other requirements.
Pete Cheema, chief executive of the Scottish Grocers Federation, said the delay was expected but the government "should have clarified all of these points well before imposing regulations of the producers and the retailers" and the “blame lies within the Scottish government”.
"We always said this deposit return scheme is not industry-led, and had it been industry-led, they would've listened to us in the first place. Businesses will have machines that have glass in scope and now it's out of scope," he said.
For next two years with no major use, Scottish retailers are now "trapped in contracts with reverse vending companies" which cost an average of almost £4,000 a year. Cherry on the top here is some of these machines also include glass recycling. Some even had to make changes and renovations around the shop to fit these machines.
Razzaq has said he is considering the legal route in this matter to seek compensation.
"We are expecting Scottish government to pay us as we were told the scheme will go ahead and now it won't be going ahead for a couple of years. A lot of retailers took Scottish government in good faith and made arrangement,” Razzaq told Asian Trader.
Michael Topham, Chief Executive of BIFFA, said that, as the logistics partner for the scheme, Biffa has already invested £65 million under the assumption that glass will be included. He has also declared that Biffa would seek to “claw back at least some of the £65 million it has invested in the DRS”.
British Soft Drinks Association, trade association which represents many major soft drinks companies including Coco-Cola, A.G. Barr and Innocent Drinks, too has confirmed to Asian Trader that it’s seeking compensation from the Scottish government over the delay. The association has also demanded the UK government to publish a blueprint for how it intends to achieve an October 2025 start date, particularly regarding how it intends to fulfill the conditions set out in its letter to the Scottish government.
Scottish First Minister Humza Yousaf (Photo by Fraser Bremner - Pool/Getty Images)
Meanwhile, Yousaf seems to be now washing hands over what the government seemingly owes to businesses, saying the fault lies with the UK government.
“We don’t believe there’s a case for the Scottish Government to need to compensate because the action we’ve had to take is because of that eleventh, last-minute intervention from the UK Government, which has meant that a Scottish scheme, unfortunately, isn’t viable,” Yousaf said in BBC’s Sunday with Laura Kuenssberg show on June 11.
Yousaf’s statement has drawn a strong criticism from retailers.
Reacting sharply to his comments, Razzaq from Fed said that the Scottish government’s claim to seek an improved relationship with businesses will have “faint credibility if it seeks to evade paying compensation”.
“How can the Scottish government claim that there is no case to answer? It told us repeatedly to get ready for this scheme. Shopkeepers who took out leasing contracts are paying almost £4,000 a year for now-redundant machines to process returned bottles and cans,” he said.
What next?
With too many twists and turns and surprises to keep a tab on, Scotland’s DRS seems no less than a fast-paced dramatic soap opera. Also, on the other hand, the delay until a UK-wide scheme has given a breathing space for the small producers and local retailers, some of whom are not very enthusiastic about the scheme anyway.
In the words of Glasgow-based retailer Girish Jeeva, he is among the “safe ones” who thought to wait until a couple of months more and that is why, he did not buy any equipment or paid any money for a reverse vending machine.
“I am, along with most of the retailers, kind of against the scheme as it is expected to affect the business quite a lot with multipack sales decreasing and the whole complicated system of customers having to pay extra money. To be honest, I'm just glad that it hasn't gone ahead,” Jeeva told Asian Trader.
SLTA is now calling on to take “grown-up” approach to DRS and leave “politics out of it”.
“The next steps must be the right steps with both the Scottish and UK governments and industry taking a grown-up approach – focusing on what is right for businesses and consumers – and leaving politics out of it,” he added.
October 2025 seems far as of now, but Razzaq feels that England needs to speed up if they want to meet the deadline.
“Unless England speeds up, it will be difficult to meet October 2025 deadline. They are expecting a lot of work to be done in a very short space of time.
“There are so many learning from Scottish scheme showing there is a lot of work to be done. A company that will run the deposit return scheme in England has not signed off yet and is only going to be nominated next year. With that timeline, that company will have just over a year to set up the scheme and I think that that’s not long enough. The company will need much more time as it needs to get things streamlined under regulations. We also got a general election next year. So like I said, there’s a lot of work to be done in a very less time,” he concluded.
However, the latest twist in this soap opera throws up another important question- will the UK be able to clear its differences, buckle up and actually be able to implement the scheme by October 2025 or this all is just a mirage?
UK retail sales rose less than expected in the runup to Christmas, according to official data Friday that deals a fresh blow to government hopes of growing the economy.
Separate figures revealed a temporary reprieve for prime minister Keir Starmer, however, as public borrowing fell sharply in November.
The updates follow news this week of higher inflation in Britain - an outcome that caused the Bank of England on Thursday to leave interest rates unchanged.
Retail sales by volume grew 0.2 per cent in November after a drop of 0.7 per cent in October, the Office for National Statistics said Friday.
That was less than analysts' consensus for a 0.5-percent gain.
"It is critical delayed spending materialises this Christmas to mitigate the poor start to retail's all-important festive season," noted Nicholas Found, senior consultant at Retail Economics.
"However, cautiousness lingers, slowing momentum in the economy. Households continue to adjust to higher prices (and) elevated interest rates."
He added that consumers were focused on buying "carefully timed promotions and essentials, while deferring bigger purchases".
The ONS reported that supermarkets benefited from higher food sales.
"Clothing stores sales dipped sharply once again, as retailers reported tough trading conditions," said Hannah Finselbach, senior statistician at the ONS.
Retail sales rose 0.2% in November 2024, following a fall of 0.7% in October 2024.
Growth in supermarkets and other non-food stores was partly offset by a fall in clothing retailers.
The Labour government's net borrowing meanwhile dropped to £11.2 billion last month, the lowest November figure in three years on higher tax receipts and lower debt-interest, the ONS added.
The figure had been £18.2 billion in October.
"Borrowing remains subject to upside risks... due to sticky interest rates, driven by markets repricing for fewer cuts in 2025," forecast Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics.
Jacqui Baker, head of retail at RSM UK and chair of ICAEW’s Retail Group, commented that the later than usual Black Friday weekend meant November’s retail sales figures saw only a slight uptick as cost-conscious consumers held off to bag a bargain.
“Despite many retailers launching Black Friday offers early, November trade got off to a slow start which dragged on for most of the month. This was driven by clothing which fell to its lowest level since January 2022. The only saving grace was half-term and Halloween spending helped to slightly offset disappointing sales throughout November,” Baker said.
“As consumer confidence continues to build and shoppers return to the high street, this should translate into more retail spending next year. However, there are big challenges coming down the track for the sector, so retailers will be banking on a consumer-led recovery to come to fruition so they can combat a surge in costs.”
Thomas Pugh, economist at RSM UK, added: “The tick up in retail sales volumes in November suggests that the stagnation which has gripped the UK economy since the summer continued into the final months of the year.
“While the recent strong pay growth numbers may make the Bank of England uncomfortable, it means that real incomes are growing at just under 3 per cent, which suggests consumer spending should gradually rise next year. However, consumers remain extremely cautious. The very sharp drop in clothing sales in particular could suggest that consumers are cutting back on non-essential purchases.
“We still expect a rise in consumer spending next year, due to strong wage growth and a gradual decline in the saving rate, to help drive an acceleration in GDP growth. But the risks are clearly building that cautious consumers choose to save rather than spend increases in income, raising the risk of weaker growth continuing through the first half of next year.”
Dutch dairy collective FrieslandCampina has agreed to merge with smaller Belgian rival Milcobel, creating a leading dairy cooperative.
FrieslandCampina, whose brands include Yazoo and Chocomel, said the merger will provide the foundation for a future-oriented organisation that has dairy front and centre for member dairy farmers, employees, consumers, and customers.
The proposed merger is subject to approval by FrieslandCampina’s members’ council, Milcobel’s extraordinary meeting of shareholders, and antitrust authorities. The companies said member dairy farmers, employees, works councils and trade unions have been informed about the merger proposal.
Both companies, owned by dairy farmers for many generations, complement each other well in market positions and product portfolios. The merger offers further business development opportunities in market segments such as consumer cheese, mozzarella, white dairy products (such as milk, buttermilk, and yoghurt), and ingredients, as well as benefits in efficiency and expertise, for example in the area of sustainability.
“The combination of FrieslandCampina and Milcobel is bigger than the sum of its parts. It creates a future-oriented, combined dairy cooperative that is resilient and capable of capitalising on opportunities in the dynamic global dairy market,” said Sybren Attema, chair of the board of Zuivelcoöperatie FrieslandCampina.
“This strengthens our appeal to member dairy farmers, business partners and employees. Moreover, this step supports us in realising a leading milk price for our member dairy farmers, now and in the future.”
Betty Eeckhaut, chair of the board of Milcobel, said: “The cooperative philosophy, which is deeply rooted at both Milcobel and FrieslandCampina, is the bedrock for this proposed merger. Our goal remains to create added value for our member dairy farmers.
“Through our regional complementarity we will become the cooperative dairy partner of choice for current and new members, with a solid milk supply for a successful future. For employees, the new organisation provides great opportunities to grow in an international environment. For customers, this merger means more innovation, an expanded product portfolio and further professionalisation of our services.”
Based on the combined 2023 annual figures of FrieslandCampina and Milcobel - excluding Milcobel's Ysco business, which is in the process of being divested - the new, combined organisation has a pro forma revenue of more than €14 billion (£11.6bn) , operates in 30 countries, employs nearly 22,000 staff worldwide, and processes a total volume of approximately 10 billion kilograms of milk.
The boards of the cooperatives and executive management of the two parties have signed a framework agreement regarding the proposed merger. The companies aim to finalise a detailed merger proposal in the first half of 2025, which will then be discussed with the members of FrieslandCampina and the shareholders of Milcobel.
The UK government has pledged stronger measures to combat anti-social behaviour and shoplifting, which it acknowledges as serious crimes that disrupt communities and harm businesses.
Addressing a House of Lords debate on Monday, Home Office minister Lord Hanson detailed plans to abolish the controversial £200 shoplifting threshold and to introduce a new offence for assaults on retail workers.
“Anti-social behaviour and shop theft are not minor crimes. They cause disruption in our communities,” Lord Hanson stated.
“Shop theft in particular costs retailers across the nation millions of pounds, which is passed on to us as customers, and it is not acceptable. That is why, on shop theft, we are going to end the £200 effective immunity. For shop workers, we will protect them by introducing a new offence, because they are very often upholding the law in their shops on alcohol, tobacco and other sales.”
He also emphasised the government’s commitment to restoring visible neighbourhood policing, with 13,000 additional officers and Police Community Support Officers (PCSOs) planned, as well as piloting new “respect orders” to ban repeat offenders from town centres.
Later on Wednesday, the home secretary announced a £1 billion funding boost for police across England and Wales to restore neighbourhood policing. The money will include new funding of £100 million to kickstart the recruitment of 13,000 additional neighbourhood officers, community support officers and special constables.
The debate was initiated by Labour peer Baroness Ayesha Hazarika, who painted a vivid picture of the toll anti-social behaviour takes on workers and communities. “Many people who work in shops feel like they are living in a war zone,” she said. “Anti-social behaviour can so often be the canary down the coal mine and tell a wider story about what kind of society we are living in.”
Baroness Hazarika also urged the use of technology such as facial recognition to target hardened criminals responsible for terrorising shops and local residents.
Lord Hanson agreed, adding that the government is equipping police with the resources to better address persistent offenders, including funding initiatives like Operation Pegasus, which targets organised retail crime.
Retail trade union Usdaw has welcomed the Lords debate tackling anti-social behaviour and shoplifting.
“We very much welcome that Baroness Hazarika has raised this hugely important issue for our members. It is shocking that over two-thirds of our members working in retail are suffering abuse from customers, with far too many experiencing threats and violence,” Paddy Lillis, Usdaw general secretary, said.
“After 14 years of successive Tory governments not delivering the change we need on retail crime, we are pleased that the new Labour government announced a Crime and Policing Bill in the King’s Speech and all the measures that it contains, as set out by Lord Hanson.
“The chancellor announced in the Budget funding to tackle the organised criminals responsible for the increase in shoplifting, and the government has promised more uniformed officer patrols in shopping areas. It is our hope that these new measures will help give shop workers the respect they deserve.”
In response to the mounting pressures faced by postmasters across the UK, the Post Office has unveiled a centralised wellbeing platform aimed at simplifying access to support resources.
Post Office said the surge in shoplifting and violent incidents, documented in the 2024 ACS Crime Report, has only intensified the demand for comprehensive support.
With shoplifting on the rise year-on-year since 2021, and the Christmas trading period presenting heightened risks due to increased footfall and stock levels, the wellbeing of postmasters has become a pressing concern.
The new wellbeing platform, accessible via the Branch Hub app, provides a single point of access to a range of resources designed to meet Postmasters' immediate and ongoing needs. It is divided into three sections:
‘I Need Help Right Now’: Offers urgent support, including access to emergency services, mental health first aiders, , area and business support managers and organisations like Samaritans.
‘More Support and Guidance’: Provides practical tools such as security advice, social media abuse resources, and connections to organisations like Citizens Advice and Mind.
‘Access Community Support’: Encourages peer connections through WhatsApp and Facebook groups, as well as in-person meetings.
The initiative, a collaboration between the Post Office, the National Federation of Sub-Postmasters (NFSP), and Voice of the Postmaster, underscores a shift towards a more cooperative approach between historically independent groups, and creates a shared wellbeing network that is accessible to all postmasters, regardless of affiliation.
Mark Eldridge, postmaster experience director at Post Office, said the initiative will ensure that anyone who needs help can find it quickly and easily.
“It’s about creating a culture of care and resilience in the face of the challenges our postmasters face every day. If the initiative means helping just one postmaster, then we have done our job successfully,” Eldridge added.
Tony Fleming, postmaster at Thorne Post Office, shared how the initiative provided vital support following a traumatic armed robbery at his branch.
“It was incredibly difficult for the person faced with this violent threat, as well as the wider team. It’s a traumatic experience to go through as part of your day job and having the immediate support of the Wellbeing resource was invaluable – it really was wellbeing personified and gave me and everyone in the branch the support to get back to doing what we do best, serving our fantastic community in Thorne,” Fleming said.
Paul Patel, a Hampshire-based postmaster, echoed this sentiment, highlighting the platform’s ability to combat isolation and foster collaboration:
“It has been a difficult time for all postmasters who continue to serve their communities every day often feeling alone in their daily work life. It’s such a privilege to collaborate across the network to support Postmasters wellbeing from forming friendships to guiding for more professional support.”
Christine Donnelly of the NFSP highlighted the initiative’s accessibility and symbolic value.
“From a postmaster perspective this works on several levels. It is an easily accessible resource that offers advice and facts, but it also says by implication that we care, that participants from different areas of the business recognised a need and worked together to make it the best it could be,” Donnelly noted.
“It says you are not alone or the only one - how can you be if there is a whole site available?”
The Post Office plans to evolve the platform based on postmaster feedback, ensuring it remains relevant to emerging challenges.
Earlier this week, Post Office has announced a £20 million boost for postmasters to address their concerns that their income has not kept up with inflation over the past decade.
Both independent postmasters and Post Office’s retail partners that operate branches on its behalf will receive the top-up payment ahead of Christmas. The top-up payment will be based on both the standard fixed and variable remuneration the branch received in November.
Independent retailers have weathered one of their most challenging years in 2024, with multiple headwinds affecting the sector, according to the British Independent Retailers Association (Bira).
With pressures mounting throughout the year, independent retailers have faced an increasingly difficult trading environment marked by changing consumer behaviour and economic uncertainties.
"2024 has presented unprecedented challenges for independent retailers,” said Andrew Goodacre, CEO of Bira. “Consumer spending on non-food items has declined significantly, while persistent footfall problems and fragile consumer confidence have impacted high streets nationwide. Despite inflation coming under control, interest rates are falling slowly, affecting both business and consumer spending."
"The retail landscape has become increasingly competitive, with large chains implementing deeper and longer discount periods. The rise of ultra-fast fashion retailers like Shein and Temu has created additional pressure on margins, whilst deflation on non-food items has further squeezed profits," he added.
The sector has also grappled with retail crime, with Bira's latest survey showing 78.79 per cent of businesses reporting increased frequency or severity of theft incidents.
Research from PwC earlier this year also highlighted the scale of the challenge, with 6,945 outlets shutting – equating to 38 store closures per day, up from 36 per day in 2023. The figure outnumbered the rate of new store openings, which rose modestly to 4,661, averaging 25 openings each day.
Mr Goodacre said: "The key difficulties independent retailers are grappling with include low consumer demand, as consumer confidence remains fragile and shoppers are highly value-focused. Independent shops struggle to compete on price as large chains are able to discount more deeply and for longer periods."
Looking ahead to 2025, retailers face new challenges. He added: "Medium-sized retailers will see a significant increase in employment costs, while thousands of smaller retailers will be hit with higher business rates as relief drops from 75per cent to 40 per cent."
However, Mr Goodacre said he sees reasons for optimism and added: "We expect 2025 to bring some positive changes. Wages are set to rise faster than inflation, which should boost consumer spending. Both inflation and interest rates should continue to fall, helping to rebuild consumer confidence."
"The circular economy presents a growing opportunity for independent retailers, and with economic growth set to improve, we anticipate better trading conditions. While challenges remain, independent retailers who stay adaptable and resilient will find opportunities in the year ahead."