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DRS firm falls into administration
Circularity Scotland, the company behind the roll-out of the country’s controversial deposit return scheme (DRS), has appointed administrators after its backers refused to provide extra funding.
Blair Nimmo and Alistair McAlinden from Interpath Advisory were appointed joint administrators for not-for-profit company Circularity Scotland Limited (CSL) on 20 June. The firm, which has approximately 40 staff members, stopped trading immediately after the appointment.
Circularity Scotland was established in 2020 to help implement the country’s deposit return scheme, which was initially due to come into effect on 16 August 2023.
The proposal for Scotland’s DRS would require consumers to pay a 20p (US$0.25) deposit when buying a drink in a single-use container made from polyethylene terephthalate (PET), glass, steel or aluminium, sized between 50ml and three litres.
However, in April 2023, the Scottish government delayed the introduction of DRS until March 2024, and on 7 June 2023, it was pushed back until October 2025 at the earliest.
The latest delay came after the UK government gave the scheme the go-ahead in May, but only with the exclusion of glass.
After this move, Interpath Advisory said it became clear that Circularity Scotland would fail to meet numerous ‘significant contractual obligations’ without additional financial support.
The ‘industry-led’ company had engaged in discussions with key backers to secure extra funding, but negotiations were not successful, Interpath Advisory said.
Earlier this week, trade groups the British Beer & Pub Association, British Soft Drinks Association, and Scottish Retail Consortium said in a joint statement that they would no longer fund the scheme.
Other members of the company include producers such as Diageo and Britvic, as well as industry body the Wine and Spirit Trade Association.
Nimmo, chief executive of Interpath Advisory, said: “The ongoing uncertainty surrounding the future launch of the deposit return scheme prompted the company’s backers to withdraw future funding, and as such, the directors were left with few options other than to seek the appointment of administrators.”
Interpath Advisory will focus on securing and comprehending CSL’s available assets to pay off creditors.
Circularity Scotland refused to provide a comment.