Ending the sale of peat: consultation analysis

5. Economic impact on individuals and businesses

While Chapter 4 explored responses to questions about ending the sale of peat, two questions specifically focussed on the potential impacts on individuals and businesses. As there was a significant overlap in responses to these questions, the themes evident are presented together in Chapter 5.

Although Q16 asked if a respondent’s business would be affected by a peat ban, many individuals also answered the question. These individuals have not been excluded from the analysis as we do not know the wider context of their perspective i.e. they may also run a business.

Of the organisations who answered Q16, over four fifths (83%) indicated they would be impacted by a ban on the sale of peat; one quarter (26%) would be positively impacted and 57% negatively impacted. Positive impacts were more likely to be anticipated by environmental organisations (57%) and retail plant sales organisations (42%), though half (50%) of the latter group indicated they would be negatively impacted. All whisky organisations and 88% of growing media organisations anticipated negative impacts. Other organisations who noted they would be negatively affected included Northern Peat & Moss, Tomatin Firewood Ltd and Sandness and Walls Community Council. 61% of individual peat extractors/fuel users felt they would be negatively affected.

One in six respondents left an open comment explaining their answer to Q16. The most prevalent theme was that businesses would be adversely affected due to supply chain issues and increased costs, challenges maintaining growing capacity and quality, and threats of closure. While these comments were mostly from and relating to the horticultural sector, including retail plant sales and growing media organisations, a few noted risks to businesses in other sectors.

These same concerns were raised by many in Q20. To avoid repetition, the analysis below focuses on the anticipated impacts to businesses raised at both Q16 and Q20. Other impacts are then noted under the analysis of Q20.

Supply chain issues and increased costs

The risk to horticultural businesses was largely attributed to reduced sales of plants and growing media, and higher costs. Common challenges mentioned were supply chain issues including more limited stock, squeezed growing margins and reduced productivity. Further, the timing of a ban would impact supply chains; one commercial grower noted that some products potted prior to a ban might not be sold until two years later, suggesting that this timing also needs to be taken into account when applying any ban.

Increased costs were felt to arise through costs associated with sourcing and assessing the quality of alternatives and higher prices for alternatives. Similarly worded responses from the International Peatland Society and Peat Alliance highlighted the challenges of ensuring a steady supply of materials needed for peat-free alternatives.

“The increased use of alternative growing media in the hobby gardening sector will only be possible if they are available in the required quantity and quality. Renewable raw materials can replace peat in various applications. However, the amounts of alternative growing media ingredients (e.g., wood based, coir, bark, cultivated sphagnum moss, and bracken) are not available. Cultivated sphagnum moss, for example, is currently not economically produced in large quantities. Bark and wood are being burned to generate electricity in the current energy crisis. The growing media industry is dependent on imports from the tropics for the by-products of coconut production… All raw materials must be responsibly grown or produced. This is possible for peat. The substrate industry will need all the raw materials that are available on the market in sufficient quality and at realistic prices”. – International Peatland Society

“Some of our licensees could be impacted by the cost/availability of alternatives to peat. If a full ban is implemented before the scaling up of suitable replacements for peat in horticulture, this could put a strain on the demand for these alternatives. This could in turn drive prices up – it will all depend on the level of availability against demand.” – Soil Association Scotland

Some also highlighted that the cost of plants would rise if a ban were introduced due to increased expenditure associated with researching, developing and purchasing peat-free alternatives and the impact of poor growth. Growing Media Association UK noted cost implications for growing media manufacturers which included securing sufficient volume of alternatives, increase quality assurance to ensure quality growing media is produced, investment in equipment for handling alternatives, third party auditing of the new and developing materials and new packaging for alternatives. A growing media manufacturer highlighted higher running costs associated with becoming mainly peat-free, despite having spent millions to achieve this.

“The cost of plants we buy in to sell may rise owing to changes the growers may have to make. The range might also diminish.” - Logie Steading Farm & Garden Shop

A few suggested the burden might be overwhelming for their businesses, but a few others did not believe the cost would be too much greater. Other cost implications mentioned in Q20 included higher immediate investment in equipment, irrigation systems, and expertise to transition away from peat, and increased import costs for peat-free growing media. Impacts on retailers were also noted.

“For retailers, it may be possible to simply stop selling any products containing peat by not buying from suppliers growing using peat-based media. However, that would mean that existing product lines would need to be withdrawn. Potentially contractual agreements already in place would need to be reviewed to enable such a decision was possible. This would of course have very significant impacts on suppliers, who would be facing significant cost increases and lower yields and poorer quality. For the larger retailers, including supermarkets, consideration would also need to be given to the Grocery Supply Code of Practice. The implications would need to be understood with plenty of time to ensure retailers can remain compliant with obligations.” – Horticultural Trades Association

In Q20, businesses described increased costs they would face should a ban be introduced. Many of these comments repeated the points made above. Other cost implications raised within professional horticulture included:

• Management time required to trial alternatives.
• Additional paperwork and labelling of products.
• Higher wastage as processes are refined.
• Higher staff costs arising from more regular watering and feeding of plants.
• Investment in irrigation systems that deliver nutrients for the distribution of plug plants in lorries and their short-term shortage when they arrive on-farm.
• Investment in machinery to upgrade compost into the form required by growing media companies.
• Increased transportation costs to obtain alternatives and due to peat free products being heavier than peat products.
• Additional costs arising from higher energy usage and water consumption when producing alternatives.

Growing capacity and quality

Plant growth challenges for horticultural businesses were raised by several respondents. They cautioned that reduced production levels were likely due to crop failure or poor-quality plants, i.e. if plants did not grow using alternatives. Some respondents in Q20 also highlighted that a ban would reduce the goods they can produce. Points made by respondents about the impact on business included:

• Horticultural Trades Association cited a 2023 survey that found almost half (49%) of growers would narrow their range of plants grown and 79% of retailers expect to see a fall in plant sales in the event of a ban
• A commercial grower reported they would expect to see a loss of 25% of sales; another anticipated impact on quality, availability of catalogue and product margins and stated they would be unable to source suitable alternatives for approximately 25% of their crops, despite spending considerable amounts of management time trialling alternatives.
• Glendoick Gardens Ltd & Glendoick Garden Centre stated that ericaceous nurseries will close and there would be significant conservation consequences for species and cultivars.

“Performance, including yield, could be negatively affected. alternative composts could potentially introduce damaging disease-causing organisms that might cause some stocks to become unmarketable.” - Pre-Basic Growers Association

A few also highlighted that alternatives or imported peat could introduce plant diseases to the supply chain. Perceived consequences included a fall in plant sales, reduced product availability with demand outstripping supply and reduced profit margins. A few noted that competitors could use peat to gain a competitive advantage over Scottish businesses by offering lower prices or better quality products.

“Our members’ businesses will be negatively impacted by ending the sale of peat for horticultural use. It will put our members at a significant competitive disadvantage. As an example, vegetables grown from plants raised in peat in Europe will have a lower cost base than Scottish produce. Scottish growers will not be able to compete on price, and multiple retailers will import produce.” - National Farmers Union (NFU) Scotland

“Alternative composts would come with additional costs if peat were to be banned in mini tuber production. Yield and quality might be compromised and the risk of introducing damaging pathogens would be increased.” – Pre-Basic Growers Association

Possible effect on businesses

The potential closure of businesses was mentioned by several, should they be directly affected by a peat sales ban. While most of these respondents did not provide details, a few suggested it could affect peat sellers, compost manufacturers, and whisky distilleries.

A recent survey conducted by the Horticultural Trades Association found 37% of horticultural companies expected to decrease output and employment levels, 9% expected to close completely if a 2026 date for ending professional peat use is introduced, and 79% of retailers expect to see a fall in plant sales. Separately, a few stated their business could face contraction or closure, e.g. garden centres closing or making staff redundant.

“Higher costs, reduced availability (including reduced range of products), reduced quality of product all leading to higher cost for consumer, reduced sales and less customer satisfaction with end product.” – Torwood Garden Centre

Research and development

A few mentioned development work they had undertaken. The Growing Media Association UK noted significant investment in research and development, quality assurance and machinery. The Royal Botanic Garden Edinburgh stated a ban would have minimal impact on their garden operations as they had been transitioning for over a decade. They highlighted that the Responsible Sourcing Scheme for Growing Media should ensure alternatives do not cause environmental harm. A few noted long-term overhead costs may reduce over time as the cost of alternatives decreases.

“There may be some negative effects on cost and availability if demand for peat-free compost exceeds supply, particularly in the short-term following the peat ban. However, any negative effects are fully acceptable to us for the greater good of preserving and restoring peatlands. In the long run, cost and availability may be expected to improve as production increases.” - RSPB Scotland

Positive impacts for businesses and consumers

Despite the prevalence of comments about the negative impact on horticultural businesses, some comments highlighted positive impacts for consumers and businesses. A few individual hobby gardeners suggested that consumers are actively seeking peat-free products. A few professional gardeners and commercial growers predicted a wider range of products being available and a reduction in the price of peat-free alternatives.

“We will have a greater choice of plants to buy in because all will be peat free. Hopefully there will also be a better range, choice and quality of peat free composts.” – Anonymous professional gardener / commercial grower

“Customer confidence: I will be able to promise customers that the compost I provide is peat free.” - Individual - Professional gardener / commercial grower

Q20. Please explain any potential costs or burdens that you or your business might face as a result of the outcomes arising from this consultation

There were 200 responses to Q20. Just over one quarter came from organisations, with the remainder from individuals. While both groups outlined potential economic consequences arising from the proposals, almost all of the points raised by businesses at Q20 were the same as those mentioned at Q16 and have been covered above. Below are the additional points raised primarily by individuals about costs and burden they or businesses might face.

No impact

The most common theme in response to Q20 was that there would be no burdens or costs arising from the suggested changes in this consultation. Aligned with the quantitative responses to Q16, most of these respondents were hobby gardeners.

One fifth of those who said there would be no impact were organisations. Only a few gave further detail, highlighting that they already avoided peat products or that the horticultural industry has had enough time to adjust to the possibility of a peat-free supply chain.

“We had to learn to use peat-free products, but it only took a couple of years to fully adjust.” – Anonymous organisation

Environmental cost

Several felt that if the sale of peat continued as at present, there would be negative environmental impacts on businesses and individuals. This included organisations speaking broadly about business failure due to climate change.

“If a ban on peat is not introduced, there is a risk that the climate and nature crises are exacerbated, and we do not meet the targets required for net zero and nature positive. Healthy and thriving peatlands are key to achieving these targets.” – Keep Scotland Beautiful

Other possible impacts

Several respondents at Q16 and Q20 noted the potential negative impact of a peat sales ban encompassing the whisky industry and those who use peat for domestic fuel. The impact on these groups is covered in Chapters 6 and 7 respectively.

Negative impacts on other sectors such as food, tourism and the wider economy, e.g. on employment and lost revenue, were noted by a small number.

Less commonly mentioned themes, each raised by a few respondents at Q16 included negative impacts on those who used peat to grow food and general comments about the need to find alternatives to peat. A few suggested that a ban in Scotland alone would not affect global emissions or may displace the problem i.e. peat being imported from elsewhere in Europe.

In Q20, a few stated a belief that a ban could help promote the development of alternatives and without the impetus for new research and development, producers would remain reliant on peat.