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Consumers likely to absorb costs of enhanced bottle bill

Consumers likely to absorb costs of enhanced bottle bill

Wholesale distributors are bracing for an increase in business costs once New York’s Bigger Better B

Wholesale distributors are bracing for an increase in business costs once New York’s Bigger Better Bottle Bill takes effect, and they are likely to pass those costs along to consumers through higher prices on beer, soda and bottled water, an industry spokeswoman said Monday.

Natalia Kokalj, director of communications for the New York State Beer Wholesalers Association, said the law will prompt wholesalers to increase product costs to offset added recycling and business costs.

“Consumers will bear the brunt for businesses to stay afloat. Bottling companies and distributors are facing the same requirements as before, but they now have additional costs,” Kokalj said.

Bottling companies and distributors are required to collect and recycle redeemed containers from redemption centers. They were able to offset these costs by keeping 100 percent of the unredeemed 5-cent deposits under the prior bottle bill.

Under the Bigger Better Bottle Bill, they now have to give the state 4 cents from each unredeemed deposit and pay redemption centers a handling fee of 3.5 cents per bottle, up from 2 cents per bottle.

Federal District Court Judge Deborah Batts allowed these provisions of the law to take effect when she lifted an injunction two weeks ago. She left in place temporarily the injunction on extending the 5 cent deposit to water bottles and left in place indefinitely the requirement that manufacturers place a New York state-specific UPC label on returnable bottles. She has scheduled another court date for Oct. 22 and is expected to lift the water bottle injunction then.

The Bigger Better Bottle Law was supposed to take effect in April and June but the International Bottled Water Association and other distributors obtained the injunction, pushing the start date back to April 2010.

Gov. David Paterson on Monday announced he will apply the handling fee and nickel return portions of the bottle law retroactively. The handling fee will be retroactive to June 1 and the return of 80 percent of unredeemed nickels will be retroactive to April 15.

State Budget Division spokesman Jeffrey Gordon said the state will start collecting receipts from beer and soda bottles in September and from water bottles, should the judge lift the injunction, in December.

Kokalj said the beer wholesalers association is projecting a price increase of $3.20 per case of water and a varying amount per case of beer. “That is between the brewer and the wholesaler, but it would definitively increase,” she said.

The $3.20 represents the addition of 5 cents on water, the 3.5 cent handling fee and an industry cost, Kokalj said.

Laura Haight, of the New York Public Research Interest Group, said there is a potential for increased costs, but she disputes the industry’s figures. “They do not have to raise their product costs. Still, we feel the environmental effects offset these costs.”

The price of bottled water will not likely increase until after Oct. 22, Kokalj said.

Jim Calvin, of the New York Association of Convenience Stores, said his members are concerned that should the judge lift the injunction on bottled water, the decision will “create a whole new set of burdens on the wholesale and retail industries.”

Specifically, he said, retailers — who have a finite amount of space in their stores — will now have to find 20 percent to 30 percent more room for empty containers coming back to them.

Also, retailers who sell private-label water will have to pay to relabel the water bottles to include the 5 cent redemption value. Many stores buy bottled water in bulk months ahead and bring it to their shelves as needed, Calvin said.

But the biggest concern, Calvin said, is the inconvenience to consumers. “They will now have to schlep empty water bottles to stores in order to get their nickel back,” he said.

Environmentalists say the bottle bill will keep more than 2 billion water bottles from littering roadsides and cluttering landfills. But Calvin countered that most people recycle their empty water bottles rather than throw them away.

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