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August 14, 2009

Plastics News

Court approves New York's expanded deposit law

NEW YORK (Aug. 14, 5 p.m. ET) -- A federal judge in New York has ruled that most of the provisions of the state’s expanded bottle deposit bill, challenged in court by bottled water companies, can go into effect immediately.

However, the extension of nickel deposits to bottled water won’t go into effect until after an Oct. 22 court hearing, said U.S. District Court Judge Deborah Batts, in an Aug. 13 ruling.

She suggested that the bill’s provision extending deposits to bottled water would take effect after the Oct. 22 hearing unless bottled water companies can show compliance would be impossible to achieve. The bottled water industry is “walking on unusually inhospitable legal terrain,” Batts said in her decision. “It is the Court’s expectation that [bottled water companies] are actively working to achieve compliance.”

The bill had originally been scheduled to go into effect June 1, but was challenged in court by the International Bottled Water Association, Nestle Waters North America Inc. and Polar Corp., which had obtained a temporary injunction barring the law’s implementation until April.

“We were surprised and pleased,” said Laura Haight, senior environmental associate with the New York Public Interest Research Group, in an Aug. 14 phone interview. “Judge Batts sent an extremely clear signal that she intends to put the provisions that expand the bottle bill to water bottles into place Oct. 22.”

But IBWA argued that the ruling does not change anything with regard to bottled water.

“The industry continues to be exempt from the decision until our hearing on Oct. 22,” said a spokesman for IBWA. “[It] does not affect bottled water.”

The court decision means that 80 percent of the unclaimed nickel deposits — estimated to be $115 million — will now go to the state. Distributors and bottlers will keep the remaining 20 percent, or roughly $30 million.

Previously, distributors had kept all of the funds from unclaimed deposits. Since 1982, when deposits went into effect in New York on soft drinks, distributors and bottlers have kept all unredeemed deposits, an amount estimated at $2 billion.

In addition, under the new law the handling fee that distributors pay to grocers, convenience stores and redemption centers for handling bottle returns will increase from 2 cents to 3.5 cents — the first increase since 1997.

Between 2.5 billion and 3.2 billion water bottles are consumed annually in New York, representing one-fourth of all beverages sold in the state. Bottled water represents 69 percent of all non-carbonated beverage sales in the state of New York.

“The ruling allows the provisions of the law that were not part of the bottled water industry lawsuit to go into effect,” Haight said. “The state had been losing $237,000 day. This is one of the most important environmental victories in the state of New York in a long time.”

New York Attorney General Andrew Cuomo agreed. “The court’s decision will allow essential, long-overdue updates to the bottle bill to finally take effect,” he said. [It] will ensure that the most critical elements of the bill move forward expeditiously.”

The one exception: the judge said the bill’s requirement that manufacturers develop a bar code specifically for products sold in New York state would remain on hold indefinitely.

Nestle Chairman and CEO Kim Jeffery said the company would abide by the judge’s decision after the upcoming hearing is held, but added that he felt the bottle bill was flawed and that he hoped to work with state officials and legislators to “strengthen it” in the next legislative session.

“National experience has shown that effective bottle deposit laws are based on four principles [and] the current New York bottle bill fails these tests,” Jeffery said in a statement issued by the Greenwich, Conn., company. The bill’s “gaping loopholes and sweetheart deals will hinder recycling,” he said.

Jeffery, in his statement, said that to be effective, deposit laws “must apply to all beverages, including sports drinks, teas, juices, and energy drinks and must make recycling convenient by allowing consumers to return bottles to any retail or redemption center.” In addition, he said handling fees must remain “reasonable” and deposit laws “must dedicate funding to support community recycling programs.”

Six of the 11 states in the U.S. with deposit bills now include carbonated soft drinks, beer and water bottles. Oregon added water Jan. 1, and Connecticut will add water bottles Oct. 1. California, Maine and Hawaii include water, beer, soft drinks and other non-carbonated beverages such as teas and energy drinks.

The number of plastic water bottles sold annually in the United States nearly doubled from 15 billion in 2002 to 29.8 billion in 2005, and water bottle sales are more than seven times higher than in 1997, when only 3.8 billion water bottles were sold, according to the Container Recycling Institute in Culver City, Calif.


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