A craft brewery in England has begun labelling its beer “not for sale in Scotland” amid fears it could be hit with a “hefty” fine under the deposit return scheme (DRS).

An industry group warned other small brewers could withdraw beer from sale in Scotland unless an exemption is brought in quickly, following the example of Three Blind Mice Brewery.

The Ely-based brewery said its understanding is that a £350 fee is required to register each type of beer it produces under the DRS, something which dissuaded it from taking part.

As the brewery only produces small runs of specialist beers, it said the cost of paying this fee for each beer would be prohibitive.

However, Circularity Scotland, the company set up by ministers to oversee the DRS, have said this is incorrect, and that producers only have to pay a one-off fee to register under the scheme, rather than pay separately for each product.

The fee is £365 but is not applicable if the business’ total taxable turnover is below £85,000 per annum.

READ MORE: Slater admits only fraction of drinks producers signed up to DRS

Director Alex Bragg said he chose to introduce the “not for sale in Scotland” label in case a third-party reseller sold one of the cans north of the border, leaving Three Blind Mice liable for a fine under the DRS.

The Herald:

He said: “I have seen it talked about in brewing forums, they’re saying ‘don’t sell in Scotland or you might be hit with a hefty fine’.”

While Three Blind Mice has hardly sold any beer in Scotland over its 10-year history, Mr Bragg said he wants to avoid any chance of falling foul of the DRS rules.

“Not for sale in Scotland” is now on the reverse side of all of Three Blind Mice’s cans underneath the product information.

Mr Bragg added: “It’s on all our cans, we’ve only got about four (types of) cans, we put it on about a month ago.

“I know a lot of other brewers are going to be doing it.”

During his campaign for the SNP leadership, Humza Yousaf pledged that small producers like craft breweries would be given an exemption to the DRS when it launched.

Andy Slee, chief executive of the Society of Independent Brewers, said: “With only around 80 small brewers having registered for the scheme given its vast costs, complexity and lack of time to prepare, it’s likely that more and more will choose to stop selling into Scotland by August.

“We urgently need the new FM to carry out his leadership election promise and give small producers the extra time they need to prepare for the DRS scheme, otherwise Scottish drinkers will not have access to the same range of beer as England come the summer.”

Circularity Scotland, the company set up by ministers to oversee the DRS, said producers have to pay a one-off fee to register under the scheme rather than pay separately for each product.

It said: “The deposit return scheme in Scotland ensures that all producers, regardless of their size, take responsibility for the containers that they put on to the market.

READ MORE: Deposit Return Scheme will ‘decimate’ smaller waste companies

“Our understanding is that the product in question is not currently sold in Scotland and our focus is on delivering a deposit return scheme that helps prevent billions of drinks containers each year from ending up as waste.

“We are doing this in the most effective and cost-efficient manner, keeping fees for producers as low as possible, and have recently announced £22 million of cashflow support measures to help brewers, distillers, importers and drinks manufacturers prepare for the introduction of the scheme – a support package specifically designed to help smaller businesses.”