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May 7, 2004

Pacific Business News

Bottle bill gives Hawaii new label -- HI 5¢

Come Jan. 1, 2005, Hawaii 's recyclable beverage containers will have to include a new label: Hawaii or HI 5¢.

And any retailer caught without the proper label can be fined up to $10,000 per day -- the maximum state solid-waste penalty.

A highly controversial law approved by lawmakers this week allows beverage distributors to begin labeling on Nov. 1. Retailers also can begin passing on a nickel charge to their customers for the labeled bottles beginning in November.

While retailers and those in the beverage industry lament the headaches it will cause, supporters of recycling applaud the legislation.

The new requirements mean Hawaii will soon join the ranks of 10 other states with bottle bills -- or beverage container deposit laws. Hawaii 's original bottle bill passed in 2002 and a revised version was approved this week.

"It's a done deal," said Gordon Usui, chief financial officer of Paradise Beverages. "There's nothing we can do at this point but comply. We're going to have to phase it in. We have to let our suppliers know so they can start shipping in October."

Paradise Beverages, which, among other things, distributes Moosehead, Corona , Coors, Heineken, Miller and Samuel Adams beers, has suppliers throughout the world, from Mexico to Holland .

Those that already include cash refund labels for other states can simply add Hawaii , Usui said.

The challenge, retailers say, will be to clear out the nonlabeled inventory before the law goes into effect and to get different product lines labeled on the same timetable. Some imported beverages have a slower turnover than beers and soda.

Labels already out

Apparently, a few beverage manufacturers already have included "HI" in their labels to comply with the new law.

Earlier this week, the Sierra Club displayed Hawaii-labeled bottles on the steps of the state Capitol to make the point that a delay was unnecessary. The bottles were from Mike's Hard Lemonade, a Canada-based company, and Smirnoff.

"It's interesting that there seems to be a lot of focus on logistics and how can we label these in time -- and we don't know how to do it," said Sierra Club Director Jeff Mikulina. "Some companies have already stepped up and taken care of it eight months in advance."

The beverage containers were gathered from a simple trip to the grocery store, according to Mikulina.

Mike's Hard Lemonade --a flavored alcoholic drink -- included "HI" in a list of eight other states, including New York , Oregon , Iowa and Massachusetts , along with "5¢." It also listed the state symbol for Michigan -- MI -- along with "10¢." Smirnoff bottles include "HI" along with a list of other states.

The hitch is that those beverage distributors also were required to pay the state Department of Health a nickel for each labeled bottle that entered the state, according to state recycling coordinator Jennifer Tosaki.

Beginning Nov. 1, the state will collect deposit money and put them into a DOH deposit fund that will be used to redeem consumers who recycle bottles beginning Jan. 1.

Long lines and confusion

Ed Thompson, director of the Hawaii Food Industry Association, said the bottle bill's rules and regulations will cause confusion.

There will be a two-month interim in which some labeled bottles will be available to the public, but won't be redeemable until Jan. 1, 2005.

In November, the lines at supermarkets will grow long, Thompson predicted, as cashiers examine each beverage container for a label to determine whether to charge a nickel.

"This is going to be a big headache for us, being that we are on the front lines," Thompson said. "The businesses will also have to spend costs on educating the consumer."

A six-month leeway is enough to get the new tools to stamp "HI" on top of aluminum can lids, said an employee from Ball Corporation Hawaii Can Plant, which provides cans for Coca-Cola, Pepsi, Aloha, Maid and Hawaiian Sun, among other lines of beverages. But the stamp costs money.

"None of this is difficult," said John Nugent, vice president of Anheuser-Busch Sales of Hawaii. "It just takes a lot of advanced planning. We're a big manufacturer and, with enough lead time, we can do this, but I feel for smaller manufacturers who don't have the resources."

Nugent nevertheless called the bottle bill a "bad law," saying it was an inefficient way to deal with litter and the recycling needs of the community. Other opponents call the bill another tax.

Terry Telfer, president of Reynold's Recycling, said that for any supermarket more with than 5,000 square feet he'll operate a redemption center in exchange for five stalls in the parking lot.

Reynold's Recycling is already at 16 shopping centers, he said, and is ramping up to expand by year's end. The labeling shouldn't be an issue, he said.

"They [retailers] change their packaging for Santa Claus and for the 'Bows [UH Rainbow Warriors]," he said. "So you see changes in their containers on an ongoing basis. "

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