The cooler case may feel
warmer now than it has in recent
years, but don’t blame a
faulty thermostat. Blame the fire
stoked by environmentalists and
beverage industry lobbyists in
their fight over bottle deposits.
Battles over disposable packaging are nothing
new to the beverage industry, to be sure, but in
recent years two things have changed to bring
them back onto the public agenda. First, there’s
the sheer size of the beverage industry – it has
added billions of bottles of water alone into the
waste stream in the past decade. The second is a
public that hasn’t been this environmentally hyper
since the publication of “Silent Spring.”
As a result, modern consumers are on the
warpath when it comes to pushing companies
to minimize the negative effects their products
have on the environment. The public’s interest
in bottle bills is spawned by the same “inconvenient
truths” as their interest in carbon
neutrality and recycling: the fear that society’s
waste could, at some point, via global warming
or some other environmental disaster, render the
world uninhabitable.
To their credit, beverage companies have
responded to their Al Gore-educated consumers
by publicly exhibiting their own, individual
green credentials. Coke and PepsiCo have
made commitments to recycling and carbon
footprint reduction. Anheuser-Busch is playing
up its own environmental bona fides. But
as a unified industry, leaders continue to fight
bottle deposit initiatives.
“Singling out beverage containers just doesn’t
address the problem,” said Tracey Halliday, director
of communications for the American
Beverage Association.
Still, the industry is starting to have some
defections, as environmentally minded (or simply
profit-seeking) beverage companies – particularly
in the bottled water crowd, which owes
much of its success to a marketing approach that
stresses its purity and natural aura – are starting
to break ranks. Fiji Water, to name one large
example, recently stirred the pot by looking to
endorse bottle bills and announcing its intent to
go carbon negative.
Currently, 11 states use bottle deposits to encourage
their residents to recycle beverage containers.
Most of those states passed their laws
in the 1970s and 1980s before last century’s
first environmental movement ran out of steam.
But the proposals have returned in recent years:
legislators in seven non-deposit states and the
U.S. senate are considering what a nickel could
be worth to the environment, and legislators
in four states with deposits want to expand
their programs.
Environmentalists are sounding a call to action
in each of those battlegrounds, emboldened
by recent victories in Hawaii and the Pacific
Northwest. The Aloha state instituted a deposit
system in 2005, and Oregon is scheduled to expand
its older version in 2009. With that momentum
and the current value consumers place
on environmentally friendly practices – a recent
survey by A.C. Nielsen revealed that more than
half of the consumers polled would give up convenience
for environmentally beneficial packaging
– why shouldn’t retailers and beverage companies
embrace bottle bills?
Ask that question and the flamethrowers
come out. According to Halliday, deposits levy
a discriminatory tax on an industry that produces
only 4 percent of waste streaming into
municipal landfills.
“(Bottle deposits) only look at one element of
the waste stream,” Halliday said. “They’re not
addressing the overall problem.”
But that characterization didn’t fly with Scott
Callan, a professor of economics at Bentley
College.
Callan, who co-authored Environmental
Economics and Management: Theory, Policy
and Applications, said curbside recycling
and deposit programs – as long as they’re
run effectively – both represent cost-effective
tools for policymakers who want to increase
recycling rates.
“The consumer pays the deposit and the
consumer gets the deposit back at the end if
they do the right thing,” Callan said. “I would
have to say the impact of that so-called tax is
pretty minimal.”
Halliday said the ABA believes that comprehensive
recycling programs are better than deposits,
and proven to work – especially where
deposits are not in effect. The association claims
that those nickel deposits actually hurt curbside
recycling. ABA materials cited a 1991 study
that said deposits deprive curbside programs of
revenue by removing valuable aluminum from
recycling bins. Callan agreed that was possible,
but said policymakers should treat each program
as a tool in a toolbox.
But the industry clearly prefers policymakers
to make curbside programs their recycling tool
of choice, something Coca-Cola demonstrated
in mid-February. The cola giant announced its
goal to recover and re-use 100 percent of the
aluminum used in its cans sold in the U.S. That
goal came without timeline, but Coke backed
up its commitment at the Daytona 500, stationing
an educational trailer to explain the benefits
of recycling to NASCAR fans. Coke previously
set a goal to recycle 100 percent of their PET
plastic bottles and in 2007 supported that goal
with $60 million in recycling initiatives. Those
efforts included building the world’s largest
bottle-to-bottle recycling plant in Spartanburg,
S.C. Pepsi has shined up its own green badge by
installing the second largest solar power array in
the Northwest at their Eugene, Ore. Offices.
While the industry’s biggest players may be
in step with the ABA, out at leading luxury
brand Fiji, they’re dancing to a somewhat
different tune.
Fiji also supports comprehensive recycling
programs across the U.S., according to Fiji
Brand Manager Clarence Chia, but the nation’s
leading imported water company is also looking
to support bottle deposits. Chia said Fiji decided
to break with the industry as part of their broader
efforts to more-clearly define themselves as an
environmentally-friendly company, and lead the charge “for all companies in all industries” to be
more conscious of the environment.
Fiji publicly trumpeted that charge when
Thomas Mooney, Fiji’s senior vice president of
sustainable growth, penned an article on the
popular news site The Huffington Post suggesting
the unthinkable: that the industry should
give bottle deposits another look.
“We need to give all consumers the tools and
incentives they need to recycle. It makes a difference,”
Mooney wrote. “The 11 states that have
container deposit laws account for 60% of recycled
bottles in the U.S.”
That sentiment was warmly received by Betty
McLaughlin, the executive director of the prodeposit
lobbying group, the Container Recycling
Institute.
“The old model, where everybody runs up to
state capitols and locks horns (is) getting
old,” McLaughlin said. “It’s not
doing anybody any good aside from
the lobbyists. It doesn’t really help with
recycling and it doesn’t help with climate
change.”
McLaughlin has had it with debating
the beverage industry about whether
there should be bottle deposits. She’d
rather debate how deposits should be
implemented. A returnable fee helps
consumers act responsibly, she said,
especially when it comes to RTD beverages
– which are usually consumed
outside the home. Those containers
rarely make it into home-bound recycling
bins, she said, but the fees could
be the incentive that prevents bottles
and cans from landing in the trash or
on the side of the road. As for bottles
and cans that wind up on the roadside
anyway, McLaughlin said, someone else will
likely want the deposit badly enough to pick
up that container and return it. Especially, she
added, if laws catch up with the times in terms
of deposit values.
It’s not that McLaughlin doesn’t admit that
bottle bills aren’t perfect. Laws in many states
cover only soda and beer containers – and not
the new bottled water containers that are amping
up the waste stream – she said, and deposit
rates and handling fees haven’t been updated to
keep up with inflation.
McLaughlin argues that the nickel should be
a darn sight more. A nickel in 1975 would be
worth 21 cents in today’s money, but the drop
in incentive goes beyond the nickel’s value. During
the 70s, vending machines dispensed cans
of soda for about 40 cents each. At that price
the deposit – taking the total cost of the 12 oz beverage
to 45 cents – would account for about
11 percent of the total purchase price. Today,
20oz bottles can sell for $2 or more, and the
still-unchanged deposit accounts for about 2.5
percent of that total. That leaves busy consumers
with a vanishingly small incentive to hold on
to their empty containers, and that diminishing
incentive stretches up the supply chain.
Every nickel paid to a consumer for returning
an empty container makes a round trip –
at least on paper. Consumers hand the store a
nickel when they buy the still-sealed beverage.
The store, in return, passes that nickel to the distributor.
Then the consumer returns the empty
container. The store returns the deposit, and the
distributor reimburses the store – adding a small
handing fee for the store’s time and trouble in
dealing with the empty container. But the key
word here is small. The laws dictate that stores
be paid a handling fee of 1-3 cents per container,
which has remained static just as long as the
nickel deposit has.
“It’s hard to find someone that hasn’t had a
raise in 30 years,” McLaughlin said. That low
handling fee has also made it difficult for standalone
redemption centers to stay in business.
In New York, the climate for redemption centers
could improve if legislators there pass a bill
currently active in the General Assembly. The
bill would increase the state’s handling fee from
2 cents per container to 3.5 cents per container,
and expand the state’s bottle bill to cover a
broader range of beverages. That last part makes
Jim Calvin nervous.
Calvin, the president of the New York Association
of Convenience Stores, said store operators
already struggle under the burden of returned
beer and soda containers. Their stores are already
packed tight, Calvin said, and they don’t
need –or want –to handle empty sports drink,
juice and bottled water containers.
Store operators have few options, Calvin said,
and most can’t afford machines to accept and
process containers for them. Even if they could,
he said, the noise generated by reverse vending
machines make them a prohibitive nuisance in a
3,000 square foot store.
That leaves clerks to handle each return by
hand, Calvin said, creating delays in a venue
where consumers demand rapid service.
It also leaves store operators with the
problem of stashing full-sized empty
containers at a time when they are trying
to increase their fresh food offerings.
Calvin said separating empty containers
from fresh food – both physically and
mentally – poses a problem. Stacks of
stinky, moldy, bottles and cans don’t exactly
fit with the “fresh” image, he said.
“A handling fee of any amount would
not eliminate the problem of insufficient storage space or the problem of
compromised sanitation,” Calvin said.
“It’s a nuisance that convenience store
operators deal with because they’re obligated
to deal with it under the law.”
Calvin said that he’s been happy that
convenience stores and their beverage
industry allies have been able to defeat
the New York proposal in the last
four years. He feels like bottle-bill supporters
are trying to shove the burden of dealing with
returned containers onto retailers. He said he
would rather see the state establish a network of
redemption centers before expanding the law.
He did not, however, have any idea how the
state could do that.
McLaughlin called Calvin’s idea impractical. Investors,
she said, couldn’t be expected to open a
business that would be dependent on not-yet passed
legislation, but she said she sympathized
with convenience store owners. To a point.
“You can make the decision to sell it or not sell
it,” McLaughlin said, and if stores decide to sell
beverages –as most do – “they have to accept the
responsibility for taking the stuff back.”