Retailers are threatening legal action against the Scottish Government after being left “out of pocket” by the latest delay to the Deposit Return Scheme (DRS) – which will not now begin until October 2025 at the earliest.

Mo Razzaq (pictured above), deputy vice president of the Federation of Independent Retailers, said it is now seeking legal advice on the issue of compensation.

It comes after Circular Economy Minister Lorna Slater claimed the Scottish Government had “no option” but to delay the DRS again.

Scotland was to have been the first part of the UK to introduce a DRS, with it planned for March 2024, but the latest delay means it will now not happen until initiatives in the other parts of the UK are ready.

The UK Government wants a DRS across the four nations to be aligned, and had ruled the Scottish scheme could not include glass bottles – as Holyrood had originally planned – for that reason.

That decision saw Scottish ministers accuse their counterparts in Westminster of “sabotaging” the scheme north of the border, sparking another row between the two governments.

First Minister Humza Yousaf said it had been “yet another dark day for devolution”, claiming Holyrood had been “undermined by the actions of a Tory Westminster government”.

Slater said the decision to delay the Scottish DRS once again to tie in with the UK Government’s launch date was taken after the “overwhelming response from businesses” in Scotland was for it to “align with the UK”.

It is the fourth time the DRS in Scotland has been delayed, and Razzaq said retailers want compensation, having already invested in reverse vending machines where shoppers can return empty containers to get their deposit money on drinks cans and bottles back.

As well as paying for the machines to be installed, he said retailers are now “trapped in contracts with reverse vending companies” which cost an average of almost £4,000 a year.

Speaking on BBC Radio Scotland’s Good Morning Scotland programme, Razzaq, who is also a Labour councillor, said: “We want compensated on this. We took on this because the Scottish Government told us this was a requirement for business, we did exactly what they asked for, and now we’re the ones out of pocket.”

He said the Federation of Independent Retailers is “seeking legal advice on this matter”, adding: “This wasn’t down to retailers not trying to make this work, it is down to the Scottish Government not working it properly and not planning this properly.”

Asked if his organisation is now considering suing the Scottish Government, he said: “Yes we are, we are working on the sums just now, we will need to look at the losses our members have suffered.”

Slater accepted businesses have made “significant investment” to prepare for the DRS – but she insisted the sector had supported the decision to delay until the UK Government’s scheme is ready.

She told BBC Radio Scotland: “The scheme will go ahead; the input from business is they want it to go ahead in alignment with the UK, even knowing that means a delay to the scheme.

We are listening to business and working towards that 2025 launch now.”

She insisted it was the UK Government who “made this scheme impossible to deliver on the original timescale”, adding: “We have committed to doing what industry asks us to do, which is to align with the UK scheme, even though we don’t know what that looks like yet.”

However Slater said she is “very, very sceptical” about whether this will happen in time for October 2025, noting: “The UK haven’t even passed their regulations yet, we’re in mid-2023 now.”

She could not say what will happen to Circularity Scotland, the body set up to operate the DRS in Scotland, now it will not begin for more than two years.

She added: “Circularity Scotland is an industry body and industry wanted, that was the ask, that we align with the UK – so now industry have to decide how they are going to support Circularity Scotland.”