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April 10, 2009

Business News - Local News

Beverage retailers gear up, figure costs for expanded bottle bill

Price Chopper still can’t sell wine in its stores, but must find more room in its warehouse to stock bottles of water.

The supermarket chain, along with other businesses that sell bottled water, soda and beer, will also get more money from distributors to handle recyclable beverages.

Those are some of the upshots of the $131.8 billion state budget approved last week.

The spending plan dealt a blow to a huge lobbying effort by the supermarket industry to sell wine, but rewarded environmentalists who have been pushing the state for 20 years to expand the Bottle Bill.

Beginning June 1, bottles of water sold in the state must be labeled with a five cent refund, similar to soda and beer. Consumers pay the extra five cents and can redeem the deposit by returning the empty bottle to the store.

The Bottle Bill expansion covers plain bottled water, flavored water and nutritionally enhanced water, according to the Department of Environmental Conservation.

Any bottled water in which sugar has been added, such as iced teas, isn’t included.

The new law targets the 3.2 billion bottles of water sold annually in the state.

The new law will drive up costs for supermarkets, convenience stores and other dealers that sell recyclable bottles and cans, but also provides them with more money to offset the expense.

Beverage distributors must now pay retailers 3.5 cents per bottle or can to handle recyclables instead of 2 cents. That works out to $36 more for every 100 cases.

Mona Golub, spokeswoman for Price Chopper, didn’t know whether the increase would be enough to offset the company’s higher costs.

She estimates an additional $250,000 in labor hours and employees. That doesn’t include higher warehousing costs.

Recycling could divert about 2 billion of those bottles from landfills, according to the New York Public Interest Research Group.

“It brings the percentage of beverages covered to up to 90 percent of the overall beverage market,” said Joseph Stelling, environmental campaign organizer at NYPIRG.

Under the law, in order to distinguish between bottled water sold in New York and bottles sold in surrounding states, there must be a bar code on the containers specific to New York.

Since the Golub Corp. has 116 Price Chopper stores in New York and in five surrounding states, the company must work with its supplier to create a separate bar code for bottles destined for stores in New York, Golub said.

The supermarket chain needs to store the products separately in its warehouse to ensure the correct bottles are sent to its stores in New York.

Although the company has enough room at its expanded warehouse in Rotterdam, it had not expected to be required to “double slot” bottled water when it recently expanded its facilities, Golub said.

“This is how the Legislature is trying to capture the nickel,” Golub said. “It’s rather convoluted as far as the processes in place right now. I don’t think they realize how difficult that maneuver is.”

The chain expects a big jump in the number of bottles returned to its stores, which means staff will spend more time emptying the automated machines that accept recyclables, carrying them to the back of the store and crushing them.

More automated machines will be needed in some stores to handle the increased volume, but not in every location.

Another retailer, Stewart’s Shops, receives far fewer recyclables than supermarkets, but still expects a 50 percent increase in volume, said Tom Mailey, spokesman for the chain of 326 convenience stores.

The company doesn’t use automated machines. Employees accept redeemable bottles and cans and store them in the rear until they are picked up.

“We think because of our distribution system we’ll handle it better than most,” Mailey said. “We make or distribute three-quarters of what we have so our trucks are in our shops often.”

http://albany.bizjournals.com/albany/stories/2009/04/13/story13.html?b=1239595200^1809080


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