A retailer has raised judicial proceedings against the administrators of the Deposit Return Scheme (DRS), Circularity Scotland Limited, over the handling fees being charged to store owners.
Belshill retailer Abdul Majid raised the judicial review proceedings over concerns that handling fee levels will not cover his costs following the introduction of the DRS and will be detrimental to his business both in the short and long term thereby threatening the viability of his store.
The Scottish Grocers’ Federation (SGF) welcomed the action taken by Abdul Majid.
SGF CEO Dr Pete Cheema OBE said: “SGF supports the aims of the judicial review proceedings which convenience retailer Abdul Majid MBE 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.”
Cheema warned that retailers are at financial risk due to the charges. “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,” he said. “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.”
He added that SGF “remains fully committed to a fit for purpose scheme” but for that to happen recognition must be given and action taken to address the concerns around retailer handling fee levels which has been raised in Mr Majid’s petition.”
In response, David Harris, CEO Circularity Scotland, said: “Our members agreed the process for calculating the Return Handling Fees (RHF) 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 RHF 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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