Judicial review proceedings that could threaten the rollout of the UK’s first deposit return scheme have been launched this week.
Scottish convenience store owner Abdul Majid, whose store took part in a DRS trial, is raising judicial review proceedings in the Court of Session against scheme administrator Circularity Scotland.
He claims the retailer handling fee levels announced for the scheme will not cover his costs and threaten the viability of his store in Bellshill, North Lanarkshire.
The move is being supported by the Scottish Grocers’ Federation, which last week issued a pre-action letter to Circularity Scotland, which was appointed by the Scottish government to run the scheme in 2021, warning it was planning a legal challenge.
Last month, Circularity Scotland announced small retailers that will manually take back containers in the scheme would receive 2.69p per container while for automated returns – through reverse vending machines – the fee proposed was 3.55p for the first 8,000 containers received and 1.35p for each additional container.
The judicial review is the latest threat to emerge to the DRS rollout. Last week leading food and drink companies warned plans across the UK were heading for “chaos” with less than 50 weeks to go before the first scheme in Scotland is due to go live.
Companies including Coca-Cola and Tesco-owned Booker told a GS1 event in London hopes had vitually disappeared of having a joined-up approach across the different nations. They warned there would be “casualties”, with some companies facing going bust because of the resultant extra red tape and costs.
“For a long period of time the SGF has been trying, unsuccessfully, to have Circularity Scotland review the retailer handling fee to bring about a more balanced and fair position with this,” said SGF CEO Pete Cheema.
“SGF supports the aims of the judicial review proceedings which convenience retailer Abdul Majid has brought, on his own behalf, against Circularity Scotland Limited. It is essential that DRS remains cost-neutral to return point operators and does not leave them with an additional cost burden or put them out of business.
“As a trade body, it is important that we once again highlight that thousands of local convenience stores are at risk due to insufficient funding through an inadequate and potentially illegal retailer handling fee structure. They are faced with the choice of taking on a significant financial burden to set up reverse vending machines, with no means of properly recovering this cost through the scheme, or being forced out the scheme altogether and risk losing all their footfall to large businesses.”
Circularity Scotland CEO David Harris said: “Our members agreed the process for calculating the return handling fees for the first year of Scotland’s deposit return scheme. These fees were calculated through a process that ran over a period of five months, during which a wide range of stakeholders across all sectors impacted by the scheme were closely consulted to develop a detailed cost model aligned to the requirements of the regulations.
“All our members, including the Scottish Grocers’ Federation, had the opportunity to extensively input with regards to the data that was used in the process, which was augmented with and validated by input from other operating schemes around the world, and major independent reference points and indices.
“The deposit return scheme in Scotland is one of the most significant infrastructure projects ever introduced in the UK. While we recognise that its implementation will not be without challenges, we have an opportunity to deliver a scheme that will transform the circular economy and protect Scotland’s environment.
“That is why we ensured that our membership – who represent the breadth of drinks producers and retailers in Scotland – not only approved the design of the process for calculating the return handling fees, but were also heavily involved in its design. It is therefore particularly disappointing that this action is being taken at a time when we should all be focused on ensuring that the scheme delivers for Scotland.
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