Scotland's deposit return scheme will 'likely mean higher prices and fewer choices', Nicola Sturgeon is warned

Scottish consumers will face higher prices and fewer choices if the deposit return scheme goes ahead as planned, Nicola Sturgeon has been warned.

The Scottish Retail Consortium (SRC), which represents businesses in the retail sector, said the current scheme is “bedevilled” with a host of issues.

Ewan MacDonald-Russell, the deputy head of the group, told the First Minister in a letter that while progress had been made on some of the concerns around the scheme there remains “a long list of outstanding issues”.

The deposit return scheme involves shoppers paying an extra 20p when purchasing drinks in a can or bottle, with the cash returned when they bring back the empty container for recycling.

Just one in six firms have reportedly signed up for the deposit return scheme but the Scottish Government says this represents more than 90% of containers sold in Scotland. Animaflora via iStock

Critics have warned the move will hurt businesses and consumers across the country during a cost of living crisis and have called for it to be delayed or scrapped.

Circular economy minister and Scottish Greens MSP Lorna Slater has insisted the scheme will go ahead as planned in August.

Defending the scheme, she said it will help reduce litter in Scotland and pointed to other countries that had implemented similar policies.

But with just one in six firms reportedly signing up for the programme, the SRC said businesses are not behind the plans.

MacDonald-Russell told Sturgeon: “With the three candidates to succeed you as First Minister all proposing changes to the scheme, there can be no certainty over the shape of Scotland’s DRS [deposit return scheme] before the end of this month.

“Over and above this the circular economy minister has publicly said she is actively considering exempting smaller firms, at least temporarily.

“Given all this, few can expect retailers to invest at pace in such a volatile and unpredictable situation, and the longer the uncertainty lasts the greater unnecessary costs are accrued.”

MacDonald-Russell said as it stands the deposit return scheme will “likely see consumers seeing reduced range, availability, and service whilst facing higher prices”.

He also warned that retailers currently don’t know what prices to put on their shelves or which producers they can buy from under the scheme.

This has led to a lack of confidence in the sector, MacDonald-Russell said.

The Scottish Government said that producers accounting for more than 90% of containers in Scotland have already signed up for the initiative.

A spokesperson said: “Scotland’s deposit return scheme (DRS) goes live on 16 August this year and will make producers responsible for recycling the bottles and cans they put on the market.

“Similar schemes are common in other European countries and have been shown to be very effective in improving recycling rates and tackling littering.”

The spokesperson admitted that the scheme would be a “big change” for business but added that it is committed to working with industry to implement it.

“Producers responsible for more than two billion drinks containers have now signed up with Circularity Scotland,” they said.

“This means more than 90% of the annual total volume of products are now included in the scheme.

“For the producers that have not yet registered, the Scottish Environment Protection Agency (SEPA) will continue to work with Circularity Scotland and producers to support businesses with compliance before the go live date.

“We have always said we will take a pragmatic approach to implementation, to ensure that as many businesses as possible can be part of Scotland’s DRS and can continue to sell in Scotland after the scheme comes into effect.”