New York Reconsiders Bottle Law
At issue: Should distributors be allowed to hold $80 million a year in unredeemed deposits? ENVIRONMENT
NEW YORK Gov. Mario Cuomo has decided that the soda and beer companies have it too good. After watching unredeemed nickel deposits grow into $80 million a year - all of it kept by the companies - Governor Cuomo has decided to review the law. The governor has said that the state and not the distributors should receive the unredeemed nickels. He has set up a committee under the aegis of the Moreland Act, which permits him to investigate the effectiveness of state laws. Apart from the issue of whether the state should hold the nickels, the commission is considering raising the deposit to a dime, instituting deposit banks, and setting up redemption centers throughout New York state.
``The Moreland Commission is putting us on the route toward more constructive use of the funds. For years the governor has called to use the money to set up a solid waste management fund,'' says Darren Dopp, a spokesman for the governor.
The Returnable Container Act, modeled after similar laws in 10 other states, put a 5-cent deposit on all soda and beer cans and bottles in 1983. It is an environmental law whose main aim is to reduce litter on the streets and to ease the burden of waste on overtaxed landfills.
Because of the law, New York City landfills do not receive as much waste.
According to Brendan Sexton, commissioner of the New York City Department of Sanitation, the law has eliminated about three percent of the city's garbage. In a city like New York, which has only two landfills left and produces more than 26,000 tons of garbage daily, that small percentage adds up.
Although the law has reduced waste, it has also caused financial complications. According to Henry J. Neale Jr., a proponent of the original bottle law, the soda and beer distributors were allowed to keep the nickel to defray their costs.
He explains that it was understood when the bill was drafted that there would be a cost of compliance. The cost would be taken up by the person who refuses to recycle.
``The expression was `the slob [who does not recycle] funds the system' and waives his right to get his nickel back,'' says Mr. Neale.
The distributor of beer and soda charges a nickel deposit to the retailer, who adds it on to the final price. Meanwhile, the distributor holding the nickel has been making interest on it. By refusing to take back the containers, the distributor does not have to pay the nickel nor a 1.5 cent handling charge that goes to the retailer who must store the containers.
``Its a windfall to violators at the cost of those who follow the law,'' says Assemblyman G. Oliver Koppell, who drafted the New York bottle law.
That windfall amounts to $80 million annually in unreturned cans and bottles.
The distributors of beer complain about transshipment, which means that beer sold in certain regions set up throughout New York state get trucked into other regions.
The containers are stamped with a code giving their origin of distribution. Retailers selling those containers get stuck with them once the customer brings them back. Because the tag on the container does not match their distributor no other distributor will be compensated by the bottler.
``In New York City, distributors live up to it [the law] when its to their benefit. In the mean time, I've got 25 feet of beer cans that cannot be picked up because they were transshipped,'' says Guy Polhemus, executive director of WE CAN, New York City's only redemption center.
``Competition is the nature of transshipping. It keeps the franchise wholesaler owning you,'' says John Yuliano vice president of the Empire State Beer Distributors Association Inc.
Mr. Yuliano, who has been in the beer and soda business for 47 years, feels that a state deposit bank should be set up to hold the 5-cent per can deposit and the handling fee. The state, he says would make the interest.
``This way, even if they redeemed 50 percent, the state would be keeping the deposit and handling fee on $400 million cases,'' says Yuliano.
Retailers often would rather take fines then cans. Regulations in New York state mandate that retailers must take a maximum of 240 containers per day from every person who brings them to a store that sells the brand. The maximum fine for not taking cans is $500 dollars per violation with the average fine being $250.
Francisco Lopez, an Environmental Conservation Officer with the New York State Department of Environmental Conservation, explains that sometimes store owners cut deals with distributors with the condition that they will not take back empties. ``They charge the deposit, but it leaves the customer between a rock and a hard place because no other retailer will get credit for them,'' Mr. Lopez says.
In New York City, stores complain that space is tight. Last year, of the 11,000 complaints from angry consumers received at New York's Department of Environmental Conservation - the state department entrusted to enforce the law - 8,000 faulted bodegas. Bodegas are small grocery stores that make up the majority of food stores in New York City.
The homeless have used the law as a way to survive. In New York City it is common to see people digging in trash cans and lugging plastic bags full of redeemables. Stores like D'Agostinos Inc., a supermarket chain with 24 stores in the New York City area, complain that because of the law the homeless flock to their stores.
``I get constant complaints from my customers. They may be helping themselves, but they are derelicts,'' says Nicholas J. D'Agostino Jr., the company's chief executive officer.
In Mr. Koppell's mind the homeless are volunteer sanitation people. He has suggested to the Moreland Commission that if redemption centers increase the deposit to a dime and increase the handling fee to 3 cents, the law would be more effective.
``The law is not a new idea. When I was a child, bottles had deposits. I thought it was a good idea then and I still do,'' says Koppell.