ion and promotion about the value of recycling. On the litter front, consumers, especially those most prone to littering, could use more frequent and directed reminders to obey the law and not litter.

The soft drink industry has long advocated and supported comprehensive and sustainable programs to recycle and reduce litter. Spending consumers’ money to build a massive new beverage container recycling system is simply wasteful. To provide perspective on the magnitude of the new costs, the $8.8 billion in new consumer costs would be sufficient to fund the curbside collection of nearly 60 million tons of material – about 25% of the entire municipal solid waste stream.

Thank you for the opportunity to appear before you today and present this testimony.


Attachment 1
Summary of National Beverage Producer Responsibility Act of 2002
Reference: S. 2220 (Jeffords); April 22, 2002

Provisions

  • Imposes a 10¢ refund value on all beverage containers offered for sale except those offered for on-premises sale
  • Beverages include alcoholic or nonalcoholic carbonated or noncarbonated liquids for human consumption except milk or dairy products.
  • Beverage containers are “primarily constructed of metal, glass, plastic, or paper (or a combination of those materials;” have a capacity of not more than one gallon; contain or may contain a beverage; and are offered for sale.
  • Requires that the refund value be adjusted every 10 years based on CPI changes, with changes rounded to the nearest 5¢ increment

  • Beverage manufacturers, distributors, or their agents must:
    • Submit a plan for EPA approval outlining an industry-devised system to collect, transport, reuse, and recycle beverage containers

    • Collect the refund value from customers

    • Label beverage containers with the refund value

    • Submit to EPA for public release an audited annual report of the return rate for beverage containers and an accounting of deposits collected and refunds paid

    • Pay an undetermined fee to EPA to administer the program
  • Plans must be submitted for EPA review within 180 days of enactment. Plans must contain:
    • Brands included in the plan

    • Agreements with entities that will accept container returns and pay refunds

    • Explanation of how consumers will be provided with “convenient” return sites

    • Ways in which the recovery rate for containers will reach 80% in two years

    • How the returned containers would be managed
  • Additional requirements applicable to beverage manufacturers, distributors, or their agents:
    • Prohibited from disposing of any deposit container in a landfill or incinerator

    • EPA may require payment of unclaimed deposits to states in which containers were sold if 80% of containers are not recovered.

    • If operating in existing deposit states and achieving an 80% recovery rate, the federal program would not apply in those states

Practical Impact

  • Scope

    • Beverages: includes all liquids for human consumption – well beyond the scope of any existing deposit program. Even the Maine law which is the most inclusive deposit program in the country excludes milk and dairy products as well as products such as soups, broths, flavorings, and infant formula.

    • Beverage Containers: metal, glass, plastic, paper and combinations of those extend the scope of the bill well beyond any current deposit program. Paperboard cartons and drink boxes would be included. Any container than may contain a beverage is subject to the law which would include plastic and paper cups (filled or not, sealed or not) and glassware. So, a sleeve of 100 paper cups in the grocery store would have a $10 deposit.
  • Refund

    • 10¢, equal to the Michigan deposit, the highest in the US. The deposit would increase 5¢ every ten years if the annual CPI change averaged 2.3% (a likely scenario).

    • Collected on all containers sold and refunded to consumers at designated redemption sites, as noted below
  • Manufacturers’ responsibility

    • As a “manufacturers’ responsibility” bill, the measure leaves the development and operation of a system to redeem and handle returns entirely to the manufacturers, distributors, and importers.

    • While this is done in the guise of appearing reasonable and flexible, it is borrowing from the European Green Dot system and other similar efforts to force the establishment of an industry-financed, reverse distribution system for products. The electronics industry is currently involved in a similar issue.

    • The logical extension of such an approach is a network of producer-backed waste hauling operations, duplicating the services provided by thousands of local governments and private haulers throughout the country.
  • Redemption system

    • No requirements are imposed on product retailers unless they are part of the system proposed by the industry.

    • Beverage companies must devise a plan, subject to EPA approval, that will achieve 80% recovery of deposit containers within two years. The use of the deposit mechanism is mandated, but the operation of the system and compensation for redemption sites (i.e., a handling fee) are not prescribed in the bill.

    • Developing such a system for all products nationwide would represent a significant undertaking. Many small producers would be obliged to pay any price in order to get access to a system set up by larger companies. The impact would be extremely anti-competitive and anti-consumer.
  • Exemptions

    • No state program affects this range of products and containers, so no state could achieve the 80% level required for exemption from the federal requirements. Companies would therefore have to develop nationwide plans for redemption.

    • Even if only conventional beverage containers were affected, most deposit states don’t achieve an 80% rate anyway.
  • Disposal prohibition

    • Many of the proposed deposit containers have limited recycling opportunities (e.g., composite material packages, certain plastic bottles and paper cartons, paper and plastic cups). It is unclear what the fate of these materials would be if they were collected but not be disposed.

    • Collection of these materials would contaminate loads of more valuable commodities and would result in expensive collection of materials for which no practical use could be found.