News

May 26, 2023

Bottle bill report aims to debunk claims that program costs hurt beverage sales

The Container Recycling Institute and Reloop says there’s no evidence container deposit system costs impact sales. Vermont’s governor cited costs when vetoing a recent bottle bill update. A new report

The Container Recycling Institute and Reloop says there’s no evidence container deposit system costs impact sales. Vermont’s governor cited costs when vetoing a recent bottle bill update.

A new report from the Container Recycling Institute and circular economy research group Reloop aims to debunk arguments that container deposit systems hurt beverage sales.

The report addresses concerns, mainly from the beverage industry, that bottle bills create higher costs along the value chain that are ultimately passed to consumers, thus hurting sales. The report highlights beverage sale data across bottle return systems in the U.S. and abroad.

Numerous factors affect beverage sales, but there’s no evidence that bottle return systems are one of them, the report states. “Complex and multifaceted” factors like supply challenges, seasonal demand, supply chain disruptions, production costs, regulatory changes and changes to packaging and materials all play a role, according to the report.

The report acknowledges there are costs associated with establishing or updating bottle bills, but such costs are “at least partially offset” by unclaimed deposits and by the sale of beverage containers as scrap. Such systems also offer beverage companies “the huge financial and compliance benefits of getting back up to 90% of their containers for closed-loop recycling,” said Clarissa Morawski, CEO of Reloop, in a statement. She wrote the report with Susan Collins, president of CRI.

The battle over container deposit systems’ role in U.S. recycling systems continues to be a complex endeavor. Some major brands and beverage associations that were once outwardly opposed to bottle bills, such as American Beverage, now say they’re open to discussions on different ways to get their bottles back, especially as more brands make commitments to add additional recycled content to their products. A spokesperson for American Beverage did not respond to a request for comment on the report.

The possible impacts on beverage sales and associated costs are still a major industry sticking point, though. Some argue that adding new types of containers to programs or raise handling fees force beverage distributors or others in the supply chain to raise costs, which eventually get passed on to consumers in the form of higher prices.

The CRI and Reloop report comes just a few weeks after Vermont Gov. Phil Scott, vetoed a bottle bill expansion that would have added more types of containers and raised the handling fee, among numerous other updates.

“I'm concerned this bill will result in higher costs for Vermonters due to deposit fees added to a wide range of beverage products,” Scott wrote in a June 29 veto letter, adding that he disagreed with how increased handling fees “will be passed onto consumers to fund the redemption system.”

The report uses case studies to illustrate how major updates to bottle bills in U.S. states and around the world have affected beverage sales locally.

Oregon raised its deposit value from 5 cents to 10 cents in 2017, but that change did not cause the state’s beer sales to either increase or decrease, according to the report. Factors like tourism, the economy and the impacts of the COVID-19 pandemic are more likely influences on sales, it said.

The study also looked at sales of the beverages covered under California’s program, known as CRV. There were “no significant disruptions in sales trends” following three of the four years — 1989, 1993 and 2004 — when the state raised its deposit value.

Sales did decline following the CRV increase in 2007, but the report attributes that change to the onset of the U.S. recession “affecting sales not only in California but across the country” and taking a few years to rebound.

Recent economic factors have also affected beverage sales, the report highlights.

In October 2022, PepsiCo announced it was raising prices on some of its products, including beverages, to counteract large commodity cost increases. Coca-Cola announced in February that it would increase its soda prices to “combat stubbornly high costs.”

The CRI and Reloop report focuses mainly on beverage sale concerns, but that aspect is just one of the reasons some stakeholders oppose bottle bill updates. Some MRF operators say bottle bills create negative impacts on their recycling business, and the National Waste & Recycling Association recently published a white paper making the case that bottle bills can hurt MRF operators because they divert valuable materials away from MRFs.

Debates over bottle bill impacts on the U.S. economy, recycling systems and circular economy initiatives are expected to continue as state lawmakers continue to reintroduce bottle bill legislation, most recently in Michigan. Some advocates also want a national bottle bill.

“Adoption of beverage container deposit return systems is increasing rapidly across the globe to support a more circular economy, but we need more progress in the U.S.,” Collins said in a statement.