Scottish Grocers’ Federation (SGF) has on Sunday (5 March) indicated that while it reaffirms its commitment to a fit for purpose deposit return scheme (DRS) for consumers and small retail businesses, the present scheme fails to provide this.
This follows the recent DRS parliamentary statement on 1 March by Circular Economy Minister Lorna Slater which the trade body said does not appear 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’.
SGF also noted that the publication of the ‘Deposit Return Scheme: Blueprint for retailers and hospitality providers’ by Circularity Scotland Limited (CSL), the scheme administrator, 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, the SGF added.
“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,” Pete Cheema, SGF chief executive, said.
SGF has listed some of the current key issues:
Payment terms: CSL have significantly changed the payment terms for all return point operators in Scotland without sufficient notice. Many RPO’s have committed to Reverse Vending Machines (RVMs) based on 7 day payment from when scanned into the RVM’s in their stores as CSL have previously highlighted. Now, for the first time in 18 months they have been informed it will be a full month before payments are made to RPO’s at a time when they have invested tens of millions buying RVMs and installing them. Now many simply do not have the cash flow to cope with this very late change to maintain their business, especially the convenience industry. For manual takeback, given there is no uplift schedule it is now suggested the minimum period is two full weeks before payments are made, dependent on when product is uplifted.
Appeal process: The appeal process is wholly unreasonable, 28 days to review and then a further 14 days before payments may be made. A full six weeks later, after payments should have been made, the scheme administrator will make payments. This is unsatisfactory and will seriously impact small business cash flows.
Exemptions: The exemptions process is extremely confusing and overly complex. A proximity exemption is only available to retailers where there is another return point within 400m (which is considered to be approx. 400m as a pedestrian would travel, instead of a straight-line distance) and that return point has consented to the application for an exemption. Alternatively, they can seek an environmental health exemption but in doing so are required via an online process to upload glass policies, planning applications and send in pictures but limit to 5 megabytes. They also must be able to demonstrate that there is no reasonable way for them to operate a return point on their premises without breaching their obligations towards food safety, health and safety, fire safety, environmental protection, and public health. It is not clear, from a business perspective, how to advise a retailer about their options around exemptions as nobody knows the volume and capability until the collection process is published as a confirmed contract – CSL were going to deal with but now seems this has been pushed back to retailer.
“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,” Cheema 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.”
SGF has sent a paper to Lorna Slater on 27 February setting out in detail over 40 outstanding issues around the scheme which still require to be addressed and have asked for a response within 14 days.
Photo: iStock
Other key issues listed by the SGF include:
Retailers who have closed loop operations with compacted glass, there is still no detail on how reconciliation of glass is being done, yet unreasonably being asked to commit to this scheme administrator.
The collection frequency is vague, non-committal and ignores what the convenience industry has asked for. To state small, medium or large with no volume beside it means RPO’s cannot plan for waste storage based on this and there is simply insufficient time for them to build structure due to scheme administrator refusing continually to engage on a timescale that was achievable.
The collection frequency based on this is insufficient and does not serve convenience business who need frequent uplifts due to minimal storage of scheme vessels, this has been highlighted for 18 months to both Lorna Slater and the scheme administrator, all of which has been ignored. The guidance issued by the scheme administrator and Zero Waste Scotland on 21 February was simply shut down your service and send consumers elsewhere if you are over capacity. This document gives no confidence businesses will be able to operate within the scheme due to chronic failure by the scheme administrator.
Clarity is still required around price marked packs. Currently the Price Marking Order and DRS regulations contradict one another in how they interpret display of deposits. The Scottish government must seek a solution to this to establish who has the authority over this matter, whilst pushing for definitive guidance.
Following clarity in early February on VAT rules, details still required on if the deposit charged to consumer is ZERO rated, or VAT EXEMPT.
Clarity is required around customer receipts in terms of what retailers legally must display. Thereafter they will need to change their ePOS systems to reflect agreed legal requirements.
The Zero Waste Scotland opt out process is not fit for purpose and failing industry as advised to Lorna Slater repeatedly in the past 12 months. On 21 February 23 Zero Waste Scotland confirmed that circa 90 per cent of all applications were not being approved by the Scottish government. The scheme administrator reduced its producer fees based on removing thousands of RPO’s from the scheme to make it efficient for big producers, this is not on track as less than 200 applications have been made according to Zero Waste Scotland on 23 February.
The Scottish Government failed to plan fairly or properly for convenience in Scotland. The government’s planning officials in 2020 were informed to only adapt regulations “PDR” for supermarket and retail park installs. Many convenience businesses now trying to find solutions are unable to attain planning consents and coming up against significant obstacles despite local authorities trying to support them.
The Federation of Independent Retailers (The Fed) has launched an exclusive benefits scheme for Fed members.
Called FedPlus, the scheme offers a range of discounts on a host of goods and activities, from everyday purchases to luxury products.
Through FedPlus, Fed members will have access to a range of fantastic money-saving benefits covering a wide variety of areas – from health and well-being to home and car essentials, and from food and drink to fashion and tech, entertainment, travel and experiences.
There is a Savings Calculator to show how much has been saved, based on monthly or annual spending, on a range of everyday categories. The Savings Calculator will generate a personal savings total and provide links to the individual deals.
Launching FedPlus, National President Mo Razzaq said: “In my inaugural speech at the Fed’s Annual Conference in June, I spoke about the importance of providing more benefits to help members make money, save money and make business easier.
“Just four months on, we are delighted to bring you FedPlus. This is an exciting new addition to our ever-growing list of member benefits which brings you quick, at your fingertips access to several offers across a wide range of categories so the money in your wallets and purses goes even further in these financially strained times.”
Members can access the scheme through thefedonline.com website. It went live yesterday (October 31).
FedPlus is managed and run for the Fed by Parliament Hill Limited, which has been providing benefit management solutions for membership organisations for the past 20 years. Top name companies offering discounts include Virgin Experience Days, Nuffield Health, Hotpoint, Halfords, Boots, Curry’s and EE.
Tom Sparke, joint managing director and client services director at Parliament Hill, said: “We are looking forward to working with the Fed to assist them in the fantastic support that it provides for its members.
“The Fed has a strong commitment to supporting its members, which aligns with the Parliament Hill ethos of placing the needs of our clients’ members at the heart of what we do.”
Brewer Carlsberg is shifting some of its marketing focus to cheaper brands, it said on Thursday (31), as consumers in major markets bought cheaper beer and in reduced quantities.
The maker of Kronenbourg 1664, Tuborg and Somersby said beer sales volumes fell by 1.3 per cent in the third quarter, noting declines in China, France and the United Kingdom. Premium sales fell 0.5 per cent in the quarter."In Western Europe, there's no doubt that the average consumer is holding back," CEO Jacob Aarup-Andersen told Reuters.
"In Asia, China stands out as a market where the consumer is very weak. Most other Asian markets are actually okay," he said, adding the company had not yet seen Chinese stimulus measures having any impact on consumer behaviour.For years, brewers have relied on a strategy of developing and promoting their more expensive premium brands to offset an overall decline in drinking.
Aarup-Andersen said he remained confident in the long-term growth potential of premium beer and that the category will comprise a significantly larger portion of Carlsberg's business in a decade.For now, however, the company is adjusting its marketing.
"In markets where we are seeing a significant pressure on premium, we are reallocating some of our focus into making sure that we are promoting properly around the right mainstream brands," he said.
The world's third-largest brewer behind Anheuser-Busch Inbev and Heineken said third-quarter sales rose 1 per cent to 20.5 billion Danish crowns ($2.98 billion), compared with 20.7 billion expected on average by analysts in a poll gathered by the company.
Despite the shift in consumer behaviour, Carlsberg said it still expects full-year organic operating profit growth to be between 4 per cent and 6 per cent. The company lifted its full-year guidance in August.
Also on Thursday (31), the world's largest beer maker Anheuser-Busch InBev reported third-quarter profits, revenues and volumes behind forecasts. AB InBev's third-quarter statement highlighted stronger growth for its more expensive beers, like Corona, which grew 10.2% outside of its home market, Mexico, during the period.
Consumers now want a greater commitment from retailers in cutting food waste, refilling stations, sustainable packaging, and partnering with social purpose organisations, states a recent research, which also highlights that a good majority (69 per cent) of younger consumers are more likely to shop with what they see as socially responsible retailers though price sensitivity still plays a crucial role.
According to the findings, published in Vypr’s Consumer Horizon Report, reducing food waste is the most important factor for the majority of UK consumers (29 per cent), especially for Gen Z women aged 18-24 (38 per cent). More than a third (37 per cent) of men aged 18-24 said they needed food storage advice. A similar number of women aged 18-24 (33 per cent) want meal kits with the exact amount of ingredients included for them to cut down on food waste.
Refill stations for personal care, cleaning products, dry goods, and beverages are also in high demand. Consumers, particularly Gen Z women, are keen to use these stations, provided they offer a cost-saving of 6-10 per cent compared to packaged goods. The study indicates that older shoppers are less likely to use refill stations unless prices are reduced by 15 per cent or more, which Vypr said shows the importance of price in driving consumers to adopt sustainable shopping habits.
The third priority for brands and retailers is to adopt sustainable packaging. Awareness of eco-friendly packaging is high, especially among younger generations. Two-thirds of UK consumers say they expect to pay more for sustainably packaged products, and that figure rises to 86 per cent among Gen Z and Millennials. However, Vypr’s research suggests that while shoppers express willingness to pay more, price sensitivity still plays a crucial role.
Ben Davis, founder of Vypr, said: “There’s often a disconnect between consumer intentions and actions. Brands need to understand that simply offering sustainable options may not be enough if price points don’t match consumer expectations.
“For Gen Z and Millennials, sustainable products need to be competitively priced or risk losing long-term loyalty. We tested this by presenting products with and without the label ‘100 per cent Recycled Packaging’ and found price remained the key purchase decision-making factor for most consumers.”
Another factor in building loyalty among younger consumers is to showcase social responsibility. The research reveals that 60% of shoppers are more likely to shop at retailers that partner with food rescue organisations or promote a charitable cause. Among Gen Z and Millennials, this figure jumps to 69%, showing a strong preference for brands that demonstrate a social purpose.
The report also reveals that 85% of shoppers are willing to pay a deposit for reusable products, though it is younger consumers, particularly those aged 18-24 who express the strongest support for such initiatives.
The Consumer Horizon report which provides insights shaping retail, product innovation, and consumer behaviour going into 2025, can be seen here.
Sugro UK, the number one buying and marketing buying group*, in partnership with b2b.store, is thrilled to announce a further expansion of its existing E-Loyalty scheme programme, which has proven to be very popular with its members and retailers, by introducing E-Loyalty Extra Compliance and Execution scheme as well as E-Coupons.
The E-Loyalty Extra is aimed to boost compliance and execution at retail store level to drive new product launches, core range compliance, some exciting fixture trials with its supply partners and more! It will be available to all member owned and member affiliated retail stores within the group.
The E-Loyalty Extra loyalty scheme will be accessible by retailers via WhatsApp platform and will allow retailers to capture evidence of compliance by simply clicking “take photo” button.
With the addition of another digital enhancement introduced to the group recently – Coupon - based loyalty mechanic, members are now empowered to incentivise and reward customers, driving stronger consumer connections and fostering brand loyalty at a granular level. Retailers can now simply redeem a coupon at the point of check out. Another key digital development within the group is WhatsApp E-Presell which enables Sugro UK’s retail partners to provide advance product volume commitments for new product launches. This functionality is particularly powerful as it ensures that suppliers have accurate forecasts before product launches, enabling better stock availability from day one of product being available on the market.
The ease and speed of using WhatsApp for these commitments simplifies the presell process, ensures accuracy and strengthens relationships across the supply chain.
While other industry players may soon consider introducing similar digital tools, Sugro UK are proud to be at the forefront of enhancing retail-focused digital solutions. This early adoption not only ensures that Sugro UK members remain competitive but also guarantees them access to the best digital tools available in the market. These efforts are part of Sugro UK's ongoing commitment to delivering value to its members and empowering them with innovative solutions for growth and success in an increasingly digital retail environment.
Sugro Head of Commercial and Marketing, Yulia Petitt said: “I am delighted that Sugro UK members are now able to provide photographic evidence of retail compliance and in-store execution to our supplier partners, using a wide range of display and compliance criteria such as planograms, secondary displays, trials, and new product developments (NPDs).These digital features allow members to share real-time proof of execution, enhancing accountability and building supplier confidence. The launch of E-Presell functionality opens a huge digital advantage for the group which will benefit all – members, retailers and suppliers in gaining accurate forecast and ensuring product visibility in store from day one of product being on the market and with the ease of using WhatsApp, the entire pre-sell process becomes a much quicker and easier process to manage for all parties.
"The Group has had 18 consecutive years of growth and, once again, on track to deliver in 2024, with the year-to-date performance of +15% year on year and growth across all categories.” Rob Mannion, CEO of b2b.store, added: “The rate of innovation in the wholesale sector is increasing and these launches are further great examples of that. We’re particularly excited about the developments and different uses of WhatsApp in the industry, with more coming in the pipeline for 2025 – it’s a tool no wholesaler or buying group can afford to ignore because of the level of influence it’s having in the sector and there’s no sign of that direction of travel changing any time soon.”
Sugro UK is proudly owned by its 90 plus independent wholesale members, with a combined turnover of over £2.5 billion.
Expanding its footprint in the World Foods category, Paulig has acquired Panesar Foods, a prominent UK-based producer of sauces and condiments.
Founded in 1992 and headquartered in Tipton, Panesar Foods is a family-owned business with three production facilities, employing 308 staff and achieving a turnover of £59 million in the 2023 fiscal year.
This collaboration is expected to accelerate product launches and drive growth in diverse offerings, including sauces, salsas, marinades, dips, and condiments.
"We have collaborated with Panesar Foods for 17 years, and we are very pleased to welcome the company to Paulig," said Rolf Ladau, CEO of Paulig. "Today, our combined taste expertise and innovation skills unite around a shared ambition: to accelerate our international growth and expand our World Foods offerings."
Bill Panesar, CEO of Panesar Foods, expressed confidence in the partnership, stating, “As Panesar Foods becomes part of Paulig, I am confident that our ambitions for international growth will be realised, and the business will continue to thrive. We share a strong commitment to innovation and delivering high-quality, flavourful products, and I look forward to bringing even more delicious products to the market, together."
Jas Panesar, MD of Panesar Foods, echoed, “This partnership will allow us to reach new markets and deliver our authentic World Food flavors to a broader audience. We look forward to combining our passion for quality food with Paulig’s commitment to sustainability and innovation.”
All 308 Panesar employees will transition to Paulig’s team. Financial details of the transaction remain undisclosed.