Environmental Initiatives set to impact Hospitality Industry Margins?

In February 2019, The Department for Environment, Food and Rural Affairs (Defra) launched its consultation on the bottle deposit scheme adopted from successful schemes in Denmark, Finland, Germany, Norway, the Netherlands and Sweden.

The scheme aims to cut plastic bottle and can pollution by introducing a deposit return scheme (DRS) with packaging manufacturers paying the full cost of recycling their materials.

There is a concern that the DRS could lead to increased pricing which would of course affect hospitality businesses. The new tax could lead to reduced margins for businesses or impact customers if the increased costs are passed on. Scotland had a separate consultation regarding DRS and this month become the first UK country to introduce a 20p deposit return scheme (DRS) to tackle single use waste.

Scottish Government environment secretary Roseanna Cunningham recently announced that DRS in Scotland will include glass drinks containers, as well as PET plastic, and aluminium and steel cans. Cunningham claimed that the government’s intention is for DRS to be “cost neutral” for retailers who will be reimbursed through a per-container handling fee.

Recycling is a hot topic for consumers, especially in Scotland, and there are successful DRS initiatives which do not impact the pricing of products. Like our clients, Mackie’s Crisps, who recently joined forces with Walkers Crisps and the recycling company, TerraCycle, to open a crisp packet recycling point in their Errol factory. The crisp recycling point is for all finished bags of Mackie’s, as well as other crisps brands, which are then sent to TerraCycle to be turned into anything from plant pots to park benches and watering cans to cool-bags. You can learn more about Mackie’s Crisps Packet Recycling Scheme here.

As members of Scotland Food & Drink, a key sector leader promoting the interests of Scotland, we are committed to supporting growth strategies which will deliver the continued success for Scotland’s food and drink industry.

If you’d like more information, support or advice, please contact our EQ Leisure specialists via leisure@eqaccountants.co.uk or by calling one of our offices.