INDUSTRY, STATES BATTLE OVER BOTTLE BILLS

LUCIA MOSES

BOSTON -- If Massachusetts passes a bill to expand the kinds of beverages subject to its bottle deposit law, John DeJesus worries supermarkets like his will become "the town dump."

"It takes man hours, it takes labor," said DeJesus, president of 11-store Food Master Supermarkets in greater Boston, of the effort required to handle returns. "Plus, the filth. If you ever looked in the cans and bottles that are coming back, it's a health hazard."

DeJesus, also a board member of the Massachusetts Food Association, one of the proposal's opponents, has a lot of company these days.

The popularity of bottled water, teas, sports drinks and the like has benefited supermarkets' bottom lines. It's also at the root of several state initiatives to expand or add bottle deposit laws that retailers fear will make a costly and messy process even more so.

Eleven states already have bottle redemption laws, and they traditionally required minimum refundable deposits only on soda and beer containers. Dissatisfied with their low redemption rates, however, several of these states have been trying to expand their laws to other drink categories, said Judith Thorman, senior vice president of government affairs for the American Beverage Association, a lobbying group.

Supporters include environmental, civic and outdoor groups, which contend that bottle bills reduce litter and encourage recycling. Lobbyists for retailers call the programs burdensome on retailers and consumers alike and ineffective in promoting recycling, and say curbside recycling programs -- which have grown in number since the early days of bottle bills -- are a better way to go.

"The cost of expansions are very high, and we think that they really aren't going to lead to increased recycling," Thorman said. "The retailer has to store the containers, worry about issues related to cleanliness of the containers. You have to have extra staff to deal with people who are returning them."

In New York, where an expansion bill passed the state Assembly this year, the bottle battle is "by far the No. 1 issue," said Jim Rogers, president of the Food Industry Alliance of New York, a lobbying group for the state's food retailers. "Right now, the bottle law requires about 25 to 27 sorts. If you expand the bottle law, it expands our sort to about 250 to 275."

Retailers said much of that sorting would have to be handled by store associates, as reverse vending machines used by some stores to sort returns don't always fit in locations or accept all containers that would be covered under the proposed expansion.

In New York, returning empties is another issue. The law today covers containers delivered by direct-store-delivery vendors, and the empties are picked up by the vendors. The proposed expansion would cover wholesaler-delivered containers, though, raising the question of who would handle the returns. As Rogers put it, wholesalers "are not really looking to pick up boatloads of containers."

Rich Savner, director of public affairs and government relations for Pathmark, with 55 stores in New York, said he doubted backhaul would be an option because wholesaler delivery trucks may have more than one store on their delivery route, and putting empties in a truck carrying food deliveries would be unsanitary.

Retailers also say they end up redeeming far more containers than they sell under current laws. "We support recycling, but we don't think the place is in the supermarket," Savner said.

The impact of bottle bills on sales is another worry, particularly for retailers whose markets border states that don't have bottle redemption laws.

Tennessee lawmakers are pushing a 5-cent bottle deposit bill. Steve Smith, president and chief executive of K-VA-T Food Stores, whose trade area includes Tennessee, pointed out that that state already loses food sales to neighboring states that have lower or no sales taxes on food and beverages, and the proposed deposit law would raise the cost of a case by about $2. "I just think it's going to be very detrimental to the business structure," he said.

Mitch Klein, vice president of retail services for Krasdale Foods in White Plains, N.Y., distributor to 500 conventional supermarkets in the New York City area, estimates that after passing on their own costs plus the deposit, his retailer customers would be charging 20 cents more per dollar. That'll cut into sales, but retailers -- whose profit margins are already razor-thin -- can't afford to eat the cost, he said. "This is a penny business."