Addendum to Final Business and Regulatory Impact Assessment for the Deposit and Return Scheme for Scotland Regulations 2020: October 2026

Sectors affected

20. The proposed changes will have specific impact on the following sectors.

21. The scheme administrator will be directly affected through revised arrangements relating to cost recovery by SEPA, and through the new power to enable interest to be charged on late payment of producer registration fees. The scheme administrator will also be directly affected through amendments in relation to obligations on the collection of empty containers retained by hospitality retailers.

22. Registered producers placing scheme articles on the market will be directly affected as they may be charged interest on late payment of registration fees. However, the requirement to pay producer fees to the scheme administrator by such date, or at such intervals, as the scheme administrator may determine is an existing regulatory requirement and not impacted by these amendments.

23. Export shops will be affected by the removal of existing exemptions. Export shops will be required to operate consistently with other retailers under DRS Regulations. This includes complying with retailer obligations (charging a deposit, providing information on how a customer can redeem deposit) and return point operator obligations if the export shop falls within the meaning of a groceries retailer.

24. Hospitality retailers which sell scheme articles for consumption on the premises of sale such as cafes, restaurants, pubs, bars and hotels will be affected by the revised provisions relating to charging deposits and managing empty containers. The amendments provide hospitality retailers with greater flexibility in choosing an approach that meets their operational requirements and place a requirement on all hospitality retailers to communicate their chosen approach to customers.

25. SEPA will be affected through the revised commencement provisions relating to cost recovery and enforcement powers, enabling it to undertake regulatory functions associated with scheme implementation in relation to the functions of the scheme administrator.

26. Consumers may experience greater consistency in the operation of the scheme across different retail settings and across UK nations. Consumers may also benefit from improved communication regarding the application of deposits in hospitality settings. However, consumer experience may differ between hospitality venues depending on the operational model selected by individual businesses.

Engagement completed, ongoing and planned

27. Engagement has been undertaken with affected stakeholders throughout the development of the proposed amendments. Discussions have taken place with:

• Exchange for Change
• Scottish Wholesale Association
• UK Hospitality
• Food service and hospitality retailers
• Consultants supporting implementation of DRS at UK Airports
• Scottish Environmental Protection Agency (SEPA)

28. Feedback received from stakeholders has been positive. Hospitality retailer representatives indicated a preference for greater flexibility to charge or not charge the deposit to consumers, regardless of whether drinks are exclusively consumed on the premises. Hospitality stakeholders and Exchange for Change also requested that Scottish obligations on hospitality were amended to improve interoperability with DRS Regulations in England, Northern Ireland and Wales to help businesses more efficiently roll out consistent operational plans and reduce the need for varying governance, technical and communication requirements.

29. Stakeholders welcomed the removal of the exemption for export shops from charging deposits. This provides parity with other airport retailers who are required to comply with retailer obligations. Airports are already considering options to provide accessible return points to customers which could include multiple Return Vending Machines (RVMS). It is therefore considered that the removal of the return point exemption for export shops will not have a disproportionate impact, as export shops will be required to meet the same obligations as other retailers.

30. We will continue to engage with stakeholders as these changes are implemented in the lead up to scheme go-live on the 1 October 2027. Scottish Government officials meet with Exchange for Change and SEPA on a weekly basis, and frequently meet with external stakeholders to discuss DRS progress, including representative bodies for both the producer and retail sectors. Officials will also use other forums including the Regulatory Review Group to identify and evaluate any potential unintended consequences as a result of the regulatory amendments.

31. As we prepare for the scheme launch from 1 October 2027, engagement will focus on working collaboratively with Exchange for Change, SEPA and UKG, NI Executive and Welsh Government to ensure that all actors impacted by the introduction of DRS are aware of their obligations, including retailers of all sizes, producers, wholesalers, and consumers.

32. This will include clear guidance and communications materials from industry and SEPA to improve stakeholder awareness, continued collaboration with industry and regulators to identify and address any emerging implementation issues, and monitoring of any unintended impacts of the changes to the obligations on hospitality venues, export shops and consumers as the scheme is implemented.