Coca-Cola and Red Bull seek compensation for Scottish Government deposit return scheme delay

Coca-Cola and Red Bull are among the drinks companies looking to claim money from the Scottish Government after being left “out of pocket” by the latest delay to the deposit return scheme.

The flagship project will not now begin until October 2025 at the earliest after Westminster failed to grant approval for glass to be included.

The British Soft Drinks Association, which represents Coca-Cola, Irn-Bru makers AG Barr and Britvic, is seeking “urgent discussion” on compensation for costs caused by the delay.

Scotland was to have been the first part of the UK to introduce a deposit return scheme (DRS), with it planned for March 2024, but the latest delay means it will now not happen until initiatives in the other parts of the UK are ready.

“Many Scottish businesses in the food and drink, manufacturing, hospitality, and retail sectors have spent considerable time, resource, and investment into making themselves ready for multiple go live dates for the DRS only to see delay each time due to a scheme that was not industry-led and clearly undeliverable,” said Dr Liz Cameron, chief executive of the Scottish Chambers of Commerce.

“Due to these critical factors that were out of their control, with DRS going back to the legislative drawing board where changes will be necessary, it’s clear that firms deserve compensation to cover the costs they have accrued in vain up to now and for any potential future ones once the DRS is hopefully redesigned in collaboration with schemes planned for the rest of the UK.”

In 2021, the minister in charge of the DRS, Lorna Slater, said that she didn’t think businesses should pay due to delays caused by Brexit and Covid.

However, the Scottish Government has not said whether businesses would be compensated after announcing the latest delay this week.

“I do not think that it is right to suggest that an additional financial penalty should be inflicted on Scotland’s small breweries, hospitality businesses and convenience stores for delays that are due to Brexit and Covid, and which are in no way the fault of those businesses,” Slater said in Holyrood, on December 14, 2021.

Slater has insisted it was the UK Government who made the scheme “impossible to deliver” on the original timescale.

“On behalf of all members, the British Soft Drinks Association is seeking urgent discussion with the Scottish Government on compensation for costs caused by this delay,” a spokesperson told STV News.

Scottish Conservative MSP Maurice Golden said Slater had evaded questions about compensation payments since.

“Yet just 18 months ago, she was the one making the case that businesses should not be financially penalised as a result of delays to DRS that weren’t their fault,” he said.

“She and fellow ministers must now do the right thing and reimburse companies that have shelled out a fortune on the back of her warning that the scheme would go ahead, and that they must comply with it or cease trading.

“That compensation bill will be large and, once it’s paid, it’s hard to see how Lorna Slater can survive in post, given she has staked her reputation on the scheme.”

The Federation of Independent Retailers said it is was seeking legal advice on the issue of compensation.

“We are working on the sums just now, we will need to look at the losses our members have suffered,” Mo Razzaq, the organisation’s deputy vice president said.

Following the news of the delay, First Minister Humza Yousaf said it had been “yet another dark day for devolution”, claiming Holyrood had been “undermined by the actions of a Tory Westminster Government”.

A Scottish Government spokesperson said: “The UK Government’s eleventh hour intervention has left us no choice but to postpone the launch of Scotland’s deposit return scheme and the overwhelming feedback from businesses was they could not prepare for a March 2024 launch.

“We are grateful to businesses for the investment they have made. The Scottish Government remains committed to the delivery of a successful deposit return scheme and the investment made to date can be utilised in the future.”