Bottle Deposits Are a Tax
Most people, especially men, who grew up in the 50’s remember looking for soft drink bottles on roadsides and at neighbors. Do you remember those days? Why you ask? Because they would be redeemed at the local grocery store for $0.02 each and larger bottles were worth $0.05 each.
It would not be unusual for a very young person to get $2.00 per week on bottle redemptions during the summer. Of course in the 50’s there were no plastic bottles or aluminum cans. Metal cans were for beer and over time they would rust anyway. Ultimately, these bottles would be washed and a new label printed on and refilled.
Today we have moved beyond just glass relative to the value of a soda bottle. Obviously we now have “bottle bills” as they are called, on plastic water bottles, aluminum cans and beer bottles. Bottle deposits generally run from $0.05 to $0.10 each, depending on the state. Interestingly, wine and spirits containers are not subject to the bottle deposit or as I like to call it—the bottle tax.
Some say, “Well, if it is a tax, you can still get a refund”. OK Mr. and Ms. average consumer, when was
your last trip to a recycle center where you counted each glass bottle, can, or plastic bottle to get your refund?
Let’s call it a tax. This deposit is collected, by the 11 states that have a container deposit, directly from the distributor and the benefactor for any refunds generally is the recycling company that gets the
bottles from curbside collections. And, it is estimated that 60% of Americans utilize curbside recycling.
Just to show you how profitable recycling can be; in Michigan commercial recyclers were
driving reclaimed/recycled containers across state lines to redeem them for a higher deposit premium. In California that practice was costing the state $11 million yearly in this type of fraud. That must have been a big deal to them because some of these industrious individuals were prosecuted.
Today there are 11 states with a ‘bottle deposit’ in place. The primary function of the deposit, paid by the consumer, is to reduce litter. It has evolved into another source of income for some governmental agencies. But, in the end, it provides more benefits than financial harm. It’s just that the people who pay the deposit can’t or don’t conveniently get the deposit back.
But material with a deposit value is kind-of-like the gift that keeps on giving. In a landfill an aluminum can will last for 500 years, glass will last more than 1 million years and some plastics will
last more than 100 years. Interestingly, glass is the most versatile relative to its lifecycle; it can be endlessly used over and over.
The first ‘container deposit’ was implemented in Oregon in 1971. The eleventh state to start the ‘bottle deposit’ (same as the container deposit law) was Hawaii in 2002. 1982 was the year water in a PET bottle was subjected to a $0.05 deposit cost. The eleven states in addition to the previously mentioned with the deposit are: California, Connecticut, Delaware, Iowa, Maine, Massachusetts, Michigan, New York, and Vermont.
Interestingly, 80% of the beverage containers sold in the US is recyclable. In California, they ecycle about 85 percent of the 20 billion+ containers sold in the state each year. Most of the containers come back through recycling centers, so based on that it stands to reason, many people do seek to get their refunds. Only 12 percent of the CRV material comes back through curbside recycling (mostly glass
bottles, since they’re a bit more cumbersome for the average person to take to the recycling center). Also, in California, the money from unredeemed containers does not revert to the general fund. It is used for a variety of things (subsidies, grants, incentives) that support recycling and the recycling
infrastructure. The general fund has borrowed from the recycling fund in the past, but is in the process of repaying those loans. Point being, we are talking about a significant amount of money.
Interestingly, wine and spirits bottles are not affected by any bottle deposit fees (at least so far). There are three reasons: First, wine containers, as a percent of the overall beverage market, is very small;
second, the industry is highly committed to the environment and putting in place programs that are recognized as environmentally friendly; and last, when people recycle their other containers used in beer, water and soda beverages, wine bottles are going to be recycled along with the others. Over the years I have found wine drinkers to be highly conscience of the environment. Nonetheless, it is noticeable, the absence of a bottle deposit for wine. Of course, a $0.05 deposit on a small fraction of the beverage industry is problematic.
If 9 million bottles of wine are consumed in the US per day and 2 million are consumed in the 11 states with the bottle deposit then that would equate to about $100,000 per day for the 11 states’ treasuries;
or, about $9,000 per day per state. The administrative cost to collect this tax would make it counter-productive.
Any time, I would rather have sustainable, eco friendly and biodynamic farming voluntarily taking place in the production of wine versus more regulation.