Why Was The Scottish Deposit Return Scheme Controversial?

Given the effects taxes, duties and other cost burdens placed on the whisky industry have an effect on future whisky investment, it is perhaps no surprise that makers expressed concern about the implementation of a new deposit return scheme.

Initially set to launch in August 2023, the Deposit Return Scheme has instead been pushed back to March 2024, when manufacturers are far more likely to be ready for the scheme and have more time to recover from the last few years and the effects of the cost of living crisis.

This announcement by new First Minister Humza Yousaf came alongside an announcement that plans to restrict the advertising of alcoholic products including sports sponsors, live events, and restricting the sale of branded merchandise would be reconsidered as part of a “reset” of business relations.

The Scotch Whisky Association (SWA) welcomed the move, stating that whilst they support the goals of the Scheme, the plan as proposed, which would include adding 20p to the price of all goods in recyclable packaging that could be reclaimed by taking them to a participating retailer, would hurt smaller distilleries.

There were also concerns that it would require Scotland-specific packaging for the scheme and that it could potentially breach the UK’s internal market regulations because prices would be different on each side of Hadrian’s Wall.

However, the SWA also expressed concerns at the UK government’s commitment to a 10.1 per cent increase in spirits duty, which would include Scotch whisky, which it claims would increase the tax burden of an average bottle from 70 per cent to 75 per cent.

It also requested as part of its “Keep the Commitment Campaign” that the whisky industry is 

included in the Energy Bill Relief Scheme when at present it is the only alcoholic business not included, and that the UK government in the future keeps its commitment to support Scottish whisky.