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May 12, 2009

Times Union

Rethinking a provision in bottle law
Proposal considered by Paterson would mandate a two-tiered fee scale

ALBANY — A provision in the state's new bottle law that increased the handling fee paid to supermarkets would be rolled back under a proposal being floated by Gov. David Paterson.

Several people briefed by the governor's staff Monday said the plan would establish a two-tiered fee scale that would save wholesalers money while leaving supermarkets short of cash to implement the new law.

Small retailers and redemption centers still would receive increased handling fees of 3.5 cents per container collected, while stores of 10,000 square feet or more — most chain supermarkets — would stay at the previous level of 2 cents per container.

The handling fee is paid by wholesalers and bottlers who ultimately receive the containers collected at stores and redemption centers.

"We think this is outrageous," said Michael Rosen, a vice president with the Food Industry Alliance of New York State. "The food stores are the guys that make the bottle law work, and this would penalize them just as they're being required to take back an additional 3.2 billion water bottles" each year.

The so-called "bigger, better bottle bill," signed into law last month by Paterson, expanded the state's system of 5-cent deposits now charged on soda and beer to bottled water.

The hike in the handling fee to 3.5 cents was welcomed by retailers — including Price Chopper and Hannaford, the dominant supermakets in the Capital Region — which said it would help them pay for expensive upgrades, such as buying more reverse-vending machines for returned bottles.

None of the legislation currently being developed in the state Assembly and the Senate would change the handling fees.

Concerns about details in the bottle bill emerged almost immediately after it passed.

One change being considered — removal of the requirement for a New York-only price scanner bar code on each container sold in the state — is widely supported. Retailers, distributors and bottlers all said the provision would be virtually impossible to implement, and environmentalists have not objected to its removal.

Other revisions on the table would delay implementation of the law to give retailers and the beverage industry enough time to comply.

Rosen, of the Food Industry Alliance, said the two-tiered handling fee idea came as a surprise.

"We are exceedingly disappointed that the governor is waffling on this issue," he said. "All anyone needs to do is look at their own neighborhoods to see the reason for the bottle law working is that supermarkets have stepped up to the plate."

But Steven Harris, president of the New York State Beer Wholesalers Association, said the proposed changes represent "a recognition that the Legislature and the governor went way too far when they expanded the law to include water and raise the handling fee."

Harris said the higher handling fee is unfair to bottlers and wholesalers at a time when the new law also will funnel 80 percent of the unclaimed nickel deposits to the state treasury.

"That nickel has always been our handling fee," he said. "Now all that money that used to help us pay for this has been taken away from us."

With the refunded deposit and a 3.5-cent handling fee, the old 7-cent cost to collect each returned bottle or can grows to 8.5 cents, Harris said.

But Rosen said that increased handling fee was crucial for retailers beefing up their bottle-return operations. He noted that the two-tiered plan would preserve the higher handling fee for smaller retailers, including New York City grocers who don't usually have extensive facilities to accept returns.

"It's exceedingly discouraging to our members that the governor has turned his back on them so quickly," Rosen said.

In a statement Monday evening about potential revisions to the bottle bill, Paterson spokeswoman Erin Duggan said, "The governor is working to address issues raised by the bill, and he will be proposing several changes, including with regard to the handling fee."

Cathy Woodruff can be reached at 454-5093 or by e-mail at cwoodruff@timesunion.com.

http://www.timesunion.com/AspStories/story.asp?storyID=799256&category=BUSINESS


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