October 21, 2007
Store owners brace for more bottle woes
By KAREN AUCHTERLONIE
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Peter Dengate, owner of Gabe's Party Shoppe in Waterford Township, calls bottle returns the biggest headache of running his business. If legislation to expand the deposit to water and juice passes, Dengate said its effect would be devastating.
"I don't know what I would do. Room is limited now. I'd probably have to streamline my products," Dengate said.
In Michigan, from 750 million to 1 billion containers of bottled water, juice, tea and other noncarbonated beverages are for sale each year, said James Clift, the policy director for the Michigan Environmental Council.
The market share for noncarbonated beverages continues to grow, and one group -- the Container Recycling Institute of Washington, D.C. -- estimates that sales of these beverages will surpass that of carbonated beverages in less than three years.
"Obviously, the idea behind the original law was to capture all the products that were then causing a problem. I think they would've written it in a way to capture these items too, but it was such a small, almost nonexistent segment of the market then," Clift said.
History
It's never been easy to pass a so-called "bottle bill" in Michigan.
Bills that were introduced in 1974 and 1975 -- a time when bottles were creating unseemly amounts of roadside litter -- both failed to pass. Similar to now, retailers and wholesalers were against the bill for the way it imposed on their businesses.
"We have opposed that historically. It's a huge, unfunded mandate by the state," said Eric Rule, the director of governmental affairs for the Michigan Retailers Association.
A petition to place the bottle deposit bill on the 1976 election ballot was undertaken, and successful. At that time, just 212,000 signatures were needed. The first signature given to the petition drive was by then-Gov.William Milliken, according to the Michigan Environmental Council.
The proposal passed by 63.8 percent to 36.2 percent. Michigan is one of 11 states that has bottle deposit laws, and the only one that uses a 10-cent deposit. Three other states -- California, Oregon and Maine -- have expanded their laws to include noncarbonated beverages.
Retailer opposition
One of the biggest concerns big and small businesses seem to have is space.
"Where are they going to put all that?" Rule asked. Space, however, is only the tip of the iceberg.
"If a store takes back bottles and cans, it's up to them to handle the cost of everything associated. There's a lot of sanitation issues, extra pest control, providing all the bags and boxes they go into," said Mary Dechow, the director of governmental affairs for Spartan Stores. Under both the current and proposed law, stores can turn away unclean bottles and cans.
"There have been no instances where bottles have led to contamination of any products or created health problems," Clift said. Stores also have the right to choose where to put the bottle return facilities.
"Returns could be in the parking lot or right when you walk in, but instead, most stores have you go all the way back. They use it as a way to draw in you to shop," Clift said.
Dechow said many stores, especially the larger grocery stores, are using machines that take bottle and can returns and print refund receipts.
"Each machine costs between $25,000 and $30,000, plus maintenance agreements," Dechow said.
Dengate does not have such a machine at his small grocery store. Aside from being expensive to purchase, the maintenance costs to operate them can be detrimental for a small business, he said. Dealing with bottle returns does cost Dengate about three hours in labor each day, which works out to about $9,000 per year.
"There's the expense of getting cheated on the bottles, which happens all the time, and the extra cost of cleaning up after them. It can cost a small business more than $15,000 a year. There's no way you can bury that cost," Dengate said.
Unclaimed deposits
Sometimes, a bottle just doesn't get returned -- bar code slips may fall off or cans that are deformed or crushed aren't accepted by the return machines.
It happens, and when it does, who gets the dime from the deposit? The state's unclaimed deposit fund gives 75 percent of the money to the Cleanup and Redevelopment Trust Fund, where it is then distributed to various environmental efforts.
The other 25 percent goes back to the retailers to help them cover the costs of the bottle return operation.
"What it amounts to is 1 cent for every 10 bottles and cans a store will take in, and that same 10 bottles and cans cost us about 35 cents to handle. They don't get proportionately compensated," Dechow said. Dengate has not even remembered to file for his unclaimed deposits the past two years. He said he gets too busy running his small business to remember to make the calls and get the form sent to him.
"The one little thing you do get back is not the easiest thing to do," Dengate said.
Plus, the last time he did it, he only got back about $115 for handling more than 305,000 bottles and cans.
Successful recycling
Despite the retail community's opposition, the deposit program is successful in recapturing beverage containers. In 2006, about 96 percent of all deposits were collected by the state.
"The stores have managed to set up systems that can handle these bottles and cans, and the public is still extremely supportive of this law," Clift said.
Veronica Branecki of Lake Orion said she buys vitamin water by the case at Costco, and thinks it would be wonderful if the deposit law was expanded to include them.
"I drink so much of it. I have recycling, but I'd like to get the deposit for those," Branecki said.
Kenny Hancock of Waterford sees the same thing happening with the bottles for noncarbonated beverages as what spurred the first law into effect -- roadside litter.
"I think the people of Michigan would very much like to have the bill because they don't like to see all the litter these bottles create," said Sen. Michael Switalski, D-Roseville. Switalski, the author of Senate Bill 29, has introduced it five times since 1999 -- twice as a state representative and three more times as a state senator.
"It's never been taken up. Any change to this has huge implications for the industry, so (the industry) says, Ôdon't make any changes,'" Switalski said.
To make matters worse, passage of the bill requires what Switalski calls a "super-majority" of three-quarters of the Legislature. This is the standard for passage of any bill or amendment that changes something originally passed as the result of a citizen initiative, which the first deposit bill was.
Switalski thinks there is only one way his bill will ever get passed -- getting the public to start another petition drive to have the issue put on the ballot.
"The industry will see that and go, ÔUh-oh, the people will do it again. We're not sure what the people will pass, so will you work with us to get your bill passed?'" Switalski said.
The downside of deposits
Not everyone loves the bottle bill.
Margaret Wiltfang of Clarkston calls bottle returns, "dirty, dirty, dirty." Wiltfang doesn't like storing the bottles in her garage and said several other states don't have a bottle deposit law.
Some people feel the same way many stores do -- the expansion would add too many more bottles to the process.
"It's not that big of a deal, but already I have to keep track of cans," said Mike Wager, a Waterford Township resident.
Even municipal recycling authorities have their worries.
"One of our big concerns is how it would impact the volume of material received by organizations like ours," said Mike Csapo of the Resource Recovery and Recycling Authority of Southwest Oakland County. The communities of Southfield, Farmington and Farmington Hills, Novi, Walled Lake, Wixom and South Lyon contract recycling services to the authority, which collects recyclable items through household pick-up and at two drop-off centers.
"Bottle deposits tend to divert material away from organizations like ours, creating the potential for a negative impact on the financial strength of recycling facilities," Csapo said.
Csapo said the communities his authority serves are recycling about 30 percent of what would otherwise go to landfills. Michigan as a whole, however, isn't recycling as well as its neighbors.
"We do a great job bringing those cans in, but Michigan hardly recycles anything else," Rule said.
Michigan has a 20 percent recycling rate, in comparison to the 26 percent average achieved by other Great Lakes states, according to the Michigan Recycling Coalition's 2001 study.
The national recycling rate is 32 percent, according to the Environmental Protection Agency.
"Why focus on water bottles when there's so many things that need to be recycled? It makes sense that we not extend a bottle deposit, but look at ways we can recycle a vast majority of things from our homes," Dechow said.
As far as focusing on either improving overall recycling or the bottle deposit, Clift said he believes Michigan should be doing both. " Michigan's bottle deposit is the most successful in the country. We have the highest redemption rate, so why not improve that and improve recycling? I don't think they're mutually exclusive," Clift said.
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