BEVERAGE CONTAINER TAXES

Connecticut, Delaware, Hawaii, Iowa, Maine, Massachusetts, Michigan, New York, Oregon, and Vermont have adopted laws mandating that soft drinks, beer, and other carbonated beverages carry a refundable deposit/tax. California has a related law establishing a redemption value on carbonated beverage containers. Most of these laws were passed in the 1970s in response to concerns about litter from discarded beverage containers. In the 1980s, many states, including Virginia, passed broader solid waste management laws seeking to promote the diversion of recyclable and reusable material from the waste stream.

Implementing a deposit tax / return system has a profound impact on bottlers’ operations and on their customer.

· HIGH OPERATING COST

Developing the capability to handle and process empty beverage containers requires significant capital investment and operating expenses and lowers productivity.

Capital Equipment

Businesses must invest in additional warehouse space to store, sort, and process material and must purchase and install equipment such as conveyors, balers, and crushers. Because delivery vehicle space must be set aside for empty containers, more delivery trucks are required to ship the same amount of product.

Lost Productivity

Businesses also become less productive following the imposition of a deposit tax system. Since delivery personnel and retail workers may spend 20 percent of their time handling empties, delivery and sales forces are less efficient than in non-bottle bill states.

· CUSTOMER INCONVENIENCE

Container tax bills also impose significant burdens on retailers and consumers. Retailers must designate space and staff to count, sort, and store empty bottles and cans. This may mean acquiring new equipment, adding space onto stores, redesigning existing space, hiring new staff, and incurring extra costs for sanitation and insect and rodent control. Consumers must separate deposit containers from their existing recyclables and bring the bottles and cans with them to the store, rather than leaving them at the curb for pickup.

KEY FACTS

· Deposit tax programs run counter to the comprehensive solid waste programs. Establishing a duplicate recycling system for beverage containers alongside existing community recycling programs is an economic and a strategic mistake.

· A deposit tax system is a much less efficient way to handle recyclables compared to a comprehensive recycling program accepting many materials.

· The cost per ton of material recycled is typically three times higher in a deposit system than in a comprehensive curbside program. Further, a deposit system pulls the most valuable material (aluminum) out of the community program, adversely affecting the economies of the existing system.

· Deposit tax laws are poor substitutes for comprehensive litter control and recycling programs. Programs such as the one we have in Virginia provide a more efficient and effective mechanism. In fact, Virginia’s program had over a 439 % return on investment last year when volunteer time and donated services, etc., were converted.

In the end, comprehensive solutions to recycling and litter control promise much greater efficiency and effectiveness than deposit taxes. Bottle bills / container taxes also hurt existing recycling systems by diverting the most valuable commodities. 12/30/08