Deposit return scheme is shown to be 'unsoundly based' after court case, says Alex Salmond

Businessman Abdul Majid challenged the legality of the retailer handling fees that the firm Circularity Scotland – who entered administration on June 20 – was seeking to impose.

The proposals were supposed to be launched in March of next year – but earlier this month it was announced it would be delayed until October 2025 at the earliest.

Lorna Slater, the circular economy minister, told MSPs she had been left with no choice but to postpone the launch after the UK Government decided to exclude glass from the scheme.

Alba leader Alex Salmond said: “This latest embarrassment shows that the whole deposit return scheme was unsoundly based and lost in its own ridiculous complexity.

“It is a textbook example of how to turn a good idea into a total bourach by a combination of bureaucratic ineptitude and Ministerial arrogance."

Salmond said such a climb down and a loss in court should result in resignations:“In any normal administration, the resignation of the minister would be automatic in the face of such a court humiliation, particularly when Ms Slater had been warned repeatedly by the industry, that Circularity Scotland was in danger of acting unlawfully.

"As released minutes from ministerial meetings demonstrate, alarm bells had been ringing loud and clear for months from the industry about the credibility of the Government proposals. This was a deeply flawed scheme from an arrogant minister.

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He continued: “If the Scottish Government is to face down Westminster politically or legally, it must do so on issues where Scotland is united, not where they are presiding over an incompetent, divisive shambles of a scheme."

The ruling by Lord Young was published today, following a hearing at the Court of Session in December.

Circularity Scotland's plans for the handling fee to be determined by the costs incurred by every outlet dealing with the returned items was wrong, Majid's lawyers said, viewing it as a breach of European laws on competitiveness and being unfair on small companies.

His legal team also said their client would be set to lose £1000 a week, if DRS went ahead in the original form it was supposed to.

Scottish Grocers’ Federation chief executive Dr Pete Cheema OBE said: “The court of session has held that the way that the Scottish Government and Circularity Scotland had set up the Deposit Return Scheme was unlawful and did not comply with the regulations made by the Scottish Parliament.  

“[Circularity Scotland] had no powers to set the fees that it sought to impose on retailers and even if it had, then they had still got it wrong by trying to impose a flat fee on all retailers, despite the difference in costs to the operators.”  

He added that the decision essentially stops the DRS progressing, but noted it was “hugely disappointing” that it reached the point of legal review.  

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“This decision essentially stops the DRS progressing in its current form – it’s hugely disappointing however that it took a court action by an independent retailer when [Scottish Grocers’ Federation] had tried for some considerable time to make the Scottish Government listen to those directly affected – indeed, we had personally informed Lorna Slater that [Circularity Scotland] were breaching their license but she refused to support us when it was obvious that we were right.  

“Also, we had warned the Scottish Government that it was never industry-led. Despite representing the largest number of Return Point Operators, our voice was consistently not listened to.  

“[Scottish Grocers’ Federation] is hopeful that the UK Government will make this legal position binding when they introduce the UK-wide DRS scheme in October 2025.”  

Majid said: “I am absolutely delighted to have won my case, one which I feel in many ways was not just for myself but for the many other retailers who would have been negatively impacted if [Circularity Scotland] had been able to proceed with their plans for the setting of the retail handling fee.  

“From the outset it was clear that there was an issue over the legality of the retailer handling fees but it is not as if this was not pointed out to them.  

“The Scottish Government and [Circularity Scotland] were asked to address the concerns of retailers around this matter to avoid the concern, confusion, and uncertainty that it would generate, but to no avail despite all the best efforts which were made, in particular by Dr Pete Cheema and the Scottish Grocers’ Federation. 

“I hope the UK Government take note of this decision and use it to avoid a similar situation arising in any UK-wide scheme.”