A vast majority (96%) of small independent brewers in Scotland are unprepared for the Deposit Return Scheme due to be introduced next year, according to a new survey by Siba, the Society of Independent Brewers.
The government recycling scheme due to be introduced in July 2022, known as the Deposit Return Scheme (DRS), will see a refundable deposit added to every bottle and can sold in Scotland as well as hefty enrolment and administration fees for independent businesses and breweries.
While DRS is a laudable scheme, small brewers just don’t have the spare cash or ability to prepare for its introduction next year.”
Fiona MacEachern, Siba
Although broadly supportive of the scheme, many brewers have concerns about its costs and impacts.
More than three-quarters (77%) of small independent brewers expect to sell less beer in bottles and cans and two-thirds intend to reduce their range of beers, hitting consumer choice.
Small brewers are urging Net-zero Secretary Michael Matheson to adopt a stepped introduction of the ambitious scheme and to review the inclusion of internet sales.
They say a stepped introduction could allow larger, global producers to deliver the scheme first and delay it for small businesses – giving the latter “much-needed” time to recover from Covid-19.
According to Siba, the pandemic has seen small brewers lose 10 years of growth and accumulate debts of around £30,000 each.
Under DRS, small brewers selling beer in cans and bottles face significant changes.
Siba said the extra costs, including new labels and fees, may run into thousands of pounds. “Cash flows could be hit by having to pay these fees and the deposits upfront to the scheme administrator,” the trade body warned.
It would also require small companies to provide a “takeback service” for online sales, which have become essential during the pandemic.
According to the survey, 90% of small brewers now have online shops that provide around a quarter of their total sales. For some brewers, up to 75% of their sales are now online.
Under DRS, small brewers are expected to provide a way for empty containers to be picked up from people’s homes though a takeback service, even though the vast majority will be returned to local shops directly.
Small brewers lack the technical resources to make the changes work and the costs of returning containers could be higher than the beer itself, Siba warned.
Siba Scotland director Fiona MacEachern said: “Small independent brewers in Scotland have been hit hard by the pandemic. With pubs closed and sales restricted, they have been running on empty for some time.
“While DRS is a laudable scheme, small brewers just don’t have the spare cash or ability to prepare for its introduction next year. Inevitably, given the costs and requirements, there will be less choice for consumers and a setback for craft brewing in Scotland.”
Fellow Siba Scotland director Christie Slater added: “The challenges facing the industry is why small brewers are calling on the Scottish Government to give us extra time to prepare and allow those responsible for the vast majority of containers which are most littered to go first and make the scheme work in Scotland, but also to review the online takeback requirement which is unworkable for small brewers in its current form.”