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April 27, 2009

The Post-Standard

Making sense of the Bigger (yes) Better (?) Bottle Bill

Mike Greenlar / The Post-StandardA warehouse employee at Coca-Cola Bottling Company of Syracuse moves product into the pick area for truck delivery. Coca-Cola says the New York State Bigger Better Bottle Bill could force layoffs at the company.

The state Legislature passed a watered-down version of the "Bigger Better Bottle Bill" this month.

Under the new law, which takes effect June 1, the nickel deposit that consumers pay on carbonated soda and beer will be applied to bottles of water and sugar-free flavored water as well. No deposit will be charged for flavored water that contains sugar, or for any juices, iced teas or sports drinks.

What does that mean for you?

It depends.

A bonanza for collectors:

For Keith Alexander, owner of FM Returnables in Manlius, and other recycling drop-off center staff, the law is great news. More bottles should flow into Alexander's shop and he'll make a bigger profit on each of them.

Lawmakers agreed to increase the handling fee for people who collect recyclables. The rate per container will rise from 2 cents to 3.5 cents.

"That's a 75 percent increase in income for me," said Alexander, who noted that the handling fee hadn't been raised since the late 1990s.

Which bottles have a deposit? See a graphic explaining it.

Alexander said that with the increased revenue, he'll be able to keep running his recycling drop-off center and hire back employees he had to lay off over the past few months. "It's huge," Alexander said. "It decides whether we go out of business or not. We were really on the verge of closing. This is going to make our business viable again."

A burden for bottlers and distributors: For employees at the Coca-Cola Bottling Co. of Syracuse and other beverage production companies, the expanded bottle bill could be devastating. Coca-Cola officials say new requirements in the law will cost millions of dollars and could result in the layoffs of about 70 of the Salina factory's 207 workers.

"We don't want to have to resort to that, but obviously when you raise the cost of doing business to that degree, there's going to be an impact," said Toney Anaya, regional vice president for Coca-Cola Enterprises.

The biggest problem for distributors: A change in who can keep unclaimed deposits. Bottlers used to keep 100 percent of that money. Under the new law, they'll keep 20 percent; the rest will go into the state's general fund.

Beverage producers also will have to create specific Universal Product Codes (UPC) for deposit containers sold in New York.

State officials want to make sure that people do not buy bottles of water in Pennsylvania or New Jersey, which do not require deposits, then bring them to New York to trade for nickels. The unique UPC would make clear which bottles were sold in New York.

Anaya said the requirement will make life even more tricky for bottlers, who may choose to pull out of certain markets rather than comply with the new rules.

He used the example of Coke's production plant in Westchester County. The facility makes beverages to sell in both New York and Connecticut. Under the new bottle bill, the plant will need two production runs, rather than one, to differentiate between beverages bound for Connecticut and New York.

"These are huge logistical challenges," Anaya said. "Ultimately, we'll be around but our business will suffer. We won't be as competitive, and we'll have to look at every option: closing facilities, relocating, having to not hire people."

The rise in handling fees also puts a hit on bottlers because they write those checks to redemption centers.

"It sounds inconsequential, a penny and a half, but when you think about the amount of product sold in New York state, it amounts to millions and millions of dollars," Anaya said.

Higher cost for consumers: New Yorkers will likely see the price of their favorite beverage jump as distributors struggle to cover their increasing costs. Some types of drinks could become hard to find. At the very least, residents will have to return their water bottles instead of putting them out at the curb, or they'll be out 5 cents a pop.

"Maybe we won't sell certain products in New York, or we'll shift that production into other areas (of the country)," Anaya said. "It's not going to serve the citizens of New York at all. It's going hurt the business climate and make the product more expensive. A case of water might get twice as expensive."

Figuring out what to put in the recycling bin and what to return to get your deposit back will also be more complicated, as consumers will have to differentiate between sugar-filled flavored water, which won't carry a container deposit, and sugar-free flavored water, which will.

That distinction left some in the state scratching their heads, as it seemed to run counter to the "fat tax" Gov. David Paterson proposed last year, but later dropped. Under that proposal, Paterson wanted to tax sodas that contain sugar, but not diet or sugar-free sodas.

"I can understand why some people think this is inconsistent, but this (bottle bill) was a recycling and litter bill," said Judith Enck, Paterson's deputy secretary for the environment. "We weren't trying to do an anti-obesity bill."

Enck said the governor's original proposal included deposits on sugary waters and drinks "but the Legislature only wanted to do water," Enck said.

"This was a necessary compromise to get the bill through," she said.

Enck also pointed out that plain or sugar-free water accounts for 70 percent of water products sold in the state.

Reverse vending at big retailers: Drugstore chains and big-box stores such as Wal-Mart will be required to install on-site reverse vending machines to collect used bottles. Currently, any store that sells drinks in deposit containers must accept the containers back for recycling, but they can do it by hand rather than by machine.

"That's intended for consumer convenience," Enck said. "All of this is designed for maximum consumer convenience and to try to make it as workable for the stores as possible."

Enck said existing recycling machines will recognize water bottles as deposit containers, and stores looking to install new machines should have no trouble finding them available to buy, she said.

But the change creates another expense for distributors, who are required by law to collect the bottles, Anaya said. More pickup sites will mean increased travel expenses and higher amounts of greenhouse gases released from trucks, he said. It also could spell trouble for private recycling centers, who could lose business to the machines.

Tricky timing for corner stores: Owners will have to watch their beverage stocks carefully or risk being left with drinks that can't be sold because they no longer meet the state's requirements.

Stores and restaurants will have to switch their water stocks by June 1 to include bottles labeled with the state UPC. Unmarked water bottles will be illegal to sell.

"The stores will have to pay attention to inventory control and make sure they don't have a whole lot left on their shelves come June 1," Enck said.

Win-win for New York: Administration officials estimate that New York stands to gain about $115 million annually from unclaimed deposits.

Beyond money, Enck said, an expanded bottle bill is good public policy.

"This is an extraordinarily positive pro-environment, pro-economy bill," she said. "This is going to reduce litter, boost recycling, increase jobs. The foundation of the bill is really solid. We think it's going to help on the environment front, on the economic front and the job creation front."

Victory for environmentalists: Environmental advocates hailed the passage of a Bigger Better Bottle Bill as a victory for the environment and for the people of New York. The changes mark the first major overhaul of state bottle deposit law since 1982; it also caps a nine-year campaign to expand and update the law.

"We will have noticeably cleaner communities and far more recycling," said Laura Haight, of the New York Public Interest Research Group. "At the same time, the money from the public's unclaimed nickels will go to work for us, not for Coke and Pepsi."

The bill the Legislature passed didn't go as far as many environmental advocates would have liked. Rather than impose a nickel deposit on all noncarbonated beverage containers, as earlier versions of a Bigger Better Bottle Bill proposed, lawmakers chose to place the deposit only on water bottles.

It's still a good start, the advocates said.

More than 3.2 billion water bottles are sold in New York each year, according to the Container Recycling Institute. A study by the Onondaga County Resource Recovery Agency found that while 80 percent of plastic soda bottles are recycled, 84 percent of water bottles end up in the landfill.

The beverage and retail lobby fought hard against the Bigger Better Bottle Bill, pumping more than $2 million in campaign contributions to state legislators over the past two years. In the days leading up to the budget vote, members of the New York Bottlers Association ran ads in Central New York targeting Sen. David Valesky, D-Oneida, and urging him to vote against the bill.

"When you ran for the state Senate last year, you promised to be independent and represent our interests," the radio ads said. "We trusted you and voted for you. Now we need your help. This burdensome bottle bill that was slipped into the budget at the last minute will cost a lot of us jobs."

The campaign didn't work, but several bottlers and distributors said they plan to continue fighting.

"We're hoping the Legislature will reconsider before it goes into effect in June," Anaya said. "We think there's time and enough people concerned about this. I'm hoping we can get some fixes."


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