Coca-Cola among drinks giants demanding millions in compensation over delayed Scottish recycling scheme

Soft drinks giants Coca-Cola and Red Bull are among a growing list of firms looking to claim millions of pounds in compensation after the collapse of Scotland’s controversial deposit return scheme, Sky News understands.

The Scottish government's recycling plans, which would have seen shoppers pay an extra 20p on single-use bottles and cans, has been delayed until at least October 2025.

The drinks industry had invested millions of pounds preparing to begin operations in March 2024, despite many arguing it would have imposed potentially fatal costs on their businesses.

Some senior figures also raised concerns the scheme would have created a trade barrier between Scotland and the rest of the UK.

On Wednesday, Holyrood blamed the collapse of Scotland's system on the UK government, after Downing Street ruled it could only go ahead without glass bottles included in it.

With similar schemes in the rest of the UK not due to come into effect until 2025, the Scottish government sought an exemption from the Internal Market Act - which regulates trade in the different parts of the UK following Brexit.

Sky News understands the British Soft Drinks Association, which represents Coca-Cola, Irn-Bru makers AG Barr and Britvic, will be looking to claim compensation for the "millions wasted" on preparing for a bespoke Scottish system which is not going ahead.

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Innis and Gun, one of the UK's biggest craft beer businesses, has also told Sky News it is "carefully considering" whether to sue.

The Edinburgh-based producer says it is "consulting" with the industry about whether to claim compensation from Holyrood ministers amid "huge frustration" at the wasted costs.

Founder Dougal Sharp said: "I am hugely frustrated that we have a lot spent a lot of time, money and effort in a scheme that we have been warning the government about for years was not right.

"It has cost us many, many hours of work. It has cost us a lot of money. We will consult with our colleagues and consider carefully our next steps. Every company will be looking to protect its financial position."

Scottish Secretary Alister Jack previously rejected a suggestion from First Minister Humza Yousaf that the UK government should pick up the bill if the scheme did not go ahead as planned.

The Scottish government has been approached for comment.