Bellshill shopkeeper wins legal battle against deposit return scheme fees

A North Lanarkshire shopkeeper has won a judicial review case against the legality of fees which would have been paid to retailers under the deposit return scheme (DRS).

Abdul Majid MBE, owner of Baba’s Kitchen and Costcutter in Bellshill, filed a petition for the review of “reasonable handling fees” (RHF).

Under the DRS, retailers will be required to arrange a collection point for bottles and cans, which will then be collected by the producers.

For example, a shop could place a vending machine to collect and store empty containers of fizzy drinks, which would then be collected by the firm which makes them.

In return, the producer would pay the shop back the deposit (originally paid by customers) as well as the RHF, to support costs incurred during the collection and storage.

Circularity Scotland, the private firm charged with handling the DRS, intended the RHF to be a fixed amount – regardless of how much the storage and handing actually costs retailers.

Aberdeen Royal Infirmary was the first hospital in the UK to host a ‘reverse vending machine’ in preparation for the DRS. NHS Grampian

During the first year of the DRS, retailers would be paid 2.69p per container collected manually, and 3.55p for the first 8,000 containers collected via vending machines – after that, they would be paid 1.35p for every container.

Mr Majid challenged the legality of the fees, arguing that the RHF’s inability to take into account individual costs was unfair to small businesses.

In his petition, he filed that his business would lose £1,000 per week from operating a collection point, distorting competition between him and large businesses.

On Friday, Court of Session judge Lord Young ruled in favour of Mr Majid.

Scottish Grocers’ Federation chief executive Dr Pete Cheema OBE said: “The court of session has held that the way that the Scottish Government and Circularity Scotland had set up the Deposit Return Scheme was unlawful and did not comply with the regulations made by the Scottish Parliament .

“CSL had no powers to set the fees that it sought to impose on retailers and even if it had, then they had still got it wrong by trying to impose a flat fee on all retailers, despite the difference in costs to the operators.”

He added that the decision essentially stops the DRS progressing, but noted it was “hugely disappointing” that it reached the point of legal review.

“This decision essentially stops the DRS progressing in its current form – it’s hugely disappointing however that it took a court action by an independent retailer when SGF had tried for some considerable time to make the Scottish Government listen to those directly affected – indeed, we had personally informed Lorna Slater that CSL were breaching their license but she refused to support us when it was obvious that we were right.

“Also, we had warned the Scottish Government that it was never industry-led. Despite representing the largest number of Return Point Operators, our voice was consistently not listened to.

“SGF is hopeful that the UK Government will make this legal position binding when they introduce the UK-wide DRS scheme in October 2025.”

The DRS is currently on hold by the Scottish government, and Circularity Scotland has been forced into administration.

Mr Majid said: “I am absolutely delighted to have won my case, one which I feel in many ways was not just for myself but for the many other retailers who would have been negatively impacted if CSL had been able to proceed with their plans for the setting of the retail handling fee.

“From the outset it was clear that there was an issue over the legality of the retailer handling fees but it is not as if this was not pointed out to them.

“The Scottish Government and CSL were asked to address the concerns of retailers around this matter to avoid the concern, confusion, and uncertainty that it would generate, but to no avail despite all the best efforts which were made, in particular by Dr Pete Cheema and the Scottish Grocers’ Federation.

“I hope the UK Government take note of this decision and use it to avoid a similar situation arising in any UK-wide scheme.”