June 30, 2008
Retailers, trade groups fight expansion of bottle deposit rules
Bottle facts
-- 5.5 million bottles and cans are recycled each year under Michigan's existing bottle bill, according to the Michigan United Conservation Clubs.
-- In 2005, each Michigan resident bought an average of 338 cans and bottles of soda pop and 138 containers of water and non-carbonated beverages, according to the Container Recycling Institute.
-- To amend the existing bottle bill would require a three-fourths vote of the state Legislature.
-- According to MUCC polling, 76 percent of Michigan voters support expanding the bottle bill.
Grocers and beverage trade associations are lobbying against an effort to expand Michigan's bottle law to include water, sports drinks and other noncarbonated beverages.
Instead of adding a 10-cent container deposit to those beverages, the state should focus its efforts on persuading more people to recycle, the associations say.
Such an expansion would require the approval of three-fourths of the state Legislature, because the existing bottle deposit law was passed in 1976 as a ballot measure, approved by the state's voters.
Bill Lobenherz of the Michigan chapter of the American Beverage Association said that as much as $60 million to $100 million in costs could be passed on to consumers annually, should the bottle bill expand.
“Municipal recycling programs cost about $150 a ton to recycle material, while deposit programs like the one we have in Michigan cost in the range of $500 to $800 per ton to recycle material,” he said. “To expand the deposit law to water, tea and juice containers, the cost of recycling that incremental amount would (go up to) $1,500 to $1,800 per ton.”
The additional costs, grocers say, would stem from additional personnel for sorting, upkeep of the machines that accept returnables and measures required to keep a sanitary environment with an increased amount of often-unclean containers.
The Michigan United Conservation Clubs is driving the expansion effort, piggybacking on the publicity surrounding another, less controversial package of bills that attempts to address fraudulent redemption — when bottles purchased out of state without 10-cent deposits are redeemed at Michigan retailers, defrauding store owners a dime at a time.
Lobenherz and other industry representatives advocate a beefed-up statewide recycling program as an alternative to in-store retail redemption, pointing to Michigan's poor recycling performance in comparison to other Great Lakes states without bottle deposit laws.
“Retailers operate on a 1 percent profit margin, which makes it difficult to absorb costs,” said Linda Gobler, president of the Michigan Grocers Association.
Gobler said other Great Lakes states average a 26 percent total recycling rate. Michigan's average is just 15 percent. About 97 percent of Michigan returnables are redeemed, according to industry statistics.
“We just don't feel this is the proper route to take,” said Jane Shallal, president of the Associated Food Dealers of Michigan. “We should be spending our money and limited resources on making the public more aware of their personal responsibility for recycling.”
Shallal said one of her members recently reported quarterly costs of maintaining in-store returnable processing devices — dubbed “reverse vending machines” — at $3,000.
Dave Nyberg, a research policy specialist with MUCC, said his organization saw a chance to draw attention to a bottle bill expansion, a measure he said 76 percent of Michigan voters support, according to club polling.
About 1.1 billion noncarbonated beverage containers are thrown away each year, Nyberg said, cluttering the landscape and packing landfills.
Only about 20 percent of such containers are recycled through municipal recycling programs, he said.
“We're not "after' the grocers,” Nyberg said. “Ideally we'd like to see a comprehensive statewide recycling program, but when people voluntarily recycle only 20 percent of water bottle and sports drinks, (voluntary recycling) is not working.”
The outcry of the past few weeks, Nyberg said, mirrors the initial response to the deposit law of 1976.
“Michigan led the way for the bottle bill in the 1970s, and it was so successful that 10 other states did the same thing,” he said. “The New York general assembly passed an expanded bottle bill last week, but Michigan should be leading the way.”
The fraudulent-redemption package currently under discussion (SB 1391-95) would stiffen the penalties for fraudulent-bottle returners; other proposed legislation would require the reverse vending machines to reject a certain percentage of out-of-state returnables, with beverage manufacturers including a label marking in-state products.
At the end of the year, unredeemed funds are turned over to a state fund; 25 percent is redistributed to retailers, and the lion's share is used for environmental cleanup efforts.
Fraudulent redemption, Nyberg said, plagues retailers along Michigan's borders, with some perpetrators engaged in elaborate schemes to truck in mass quantities of returnables from outside the state or pre-crushed cans that seem to have passed through a reverse vending machine.
The state Senate Commerce and Tourism Committee heard testimony on the legislation last week and is expected to vote this week on whether to move the bills to the full Senate for approval.
Lobenherz said his industry has already committed to labeling containers, but he wouldn't speculate on what such measures might cost.
Early estimates of the cost of retrofitting reverse vending machines to reject out-of-state returnables, should such legislation be enacted, is about $10,000 per machine, Shalall said.
Nancy Kaffer: (313) 446-0412, nkaffer@crain.com.
http://crainsdetroit.com/article/20080630/SUB/806300329/1069
