Businesses have called for compensation from the Scottish government after the deposit return scheme (DRS) was delayed until October 2025 at the earliest.

The flagship recycling scheme was supposed to launch in March next year.

But Circular Economy Minister Lorna Slater said she had been left with no choice after the UK government excluded glass from the Scottish scheme last week.

She said businesses had already spent around £300m preparing for the scheme.

The DRS was originally due to launch in Scotland in July of last year but had already been delayed twice amid concern about its implementation from many businesses which would be affected.

The latest delay means it will now not happen until recycling initiatives in the other parts of the UK are ready.

When it is finally introduced, the deposit return scheme will see a 20p charge placed on drinks containers which would be refunded to consumers when they return the bottles and cans in a bid to increase recycling levels.

Larger stores, shopping centres and community hubs will operate reverse vending machines for people to return their containers.

Businesses are now calling for compensation after investing time and money into preparing for the scheme to launch in March 2024.

Mo Razzaq, of the Federation of Independent Retailers, said it was seeking legal advice on the issue of compensation.

He said many retailers had already invested in reverse vending machines and they are now “trapped in contracts with reverse vending companies” which cost an average of almost £4,000 a year.

Mr Razzaq, who is also a Labour councillor, told BBC Radio Scotland’s Good Morning Scotland programme: “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 was “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 was 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.”

Pete Cheema, chief executive of the Scottish Grocers Federation, said the delay was expected but the government “should have clarified all of these points well before imposing regulations of the producers and the retailers”.

“The blame lies within the Scottish government,” he said. “They didn’t listen to us in the first place.

“We always said this deposit return scheme is not industry-led, and had it been industry-led, they would’ve listened to us in the first place.”

He said businesses were in “total disarray” after investing in preparations for the scheme, and confirmed that the Scottish Grocers Federation was pursuing compensation from the government.

“Businesses will have machines that have glass in scope and now it’s out of scope,” he said.

“So we’ve got a problem with making sure those machines can be refurbished.”

Ms Slater accepted businesses had 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”.

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

Last week, the UK government approved a partial exemption to the Internal Market Act for the deposit scheme – but glass could not be part of it.

It said this was to bring Scotland into line with similar schemes that are due to launch in England and Northern Ireland in October 2025, which will also not include glass.

The exemption means that the Scottish deposit return scheme would only be allowed to cover PET plastic, aluminium and steel cans.