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Debates over state bottle bills are heating up again as they evolve into broader proposals for EPR, or Extended Producer Responsibility. Basically, under EPR programs states charge producers for the cost of recycling or disposing of all the materials that they produce in or ship into a state. "The idea behind all of these things sounds great," from an environmental or sustainability perspective at least, explained Steve Gross, interim prexy/ceo of the Wine Inst and the org's longtime state relations veep, at the NABCA Legal Symposium last mo. But "the practical applications" of these proposals end up posing a "really big challenge," he continued. 7 States Implement EPR Programs in 5 Yrs, a Dozen-Plus Considering Steve explained the timeline of the evolution from bottle redemption programs that started in the 1970s as "litter control" focused on soda and beer. Ultimately, 9 states passed deposit programs by 1986 and then Hawaii joined the group in 2002. The issue "morphed into a broader recycling conversation" that gave way to contemporary debates about "producer responsibility." At this point, 7 states passed EPR laws since 2021, starting with Maine and Oregon, followed by California, Colorado and Minnesota. Both Maryland and Washington passed EPR laws last yr.And there's "more legislation every year," Steve said, between proposals to institute new programs or expanding existing programs to include additional types of containers. Hawaii passed a bill to study EPR options last yr, a possible precursor, he explained. Three other proposals failed and a handful more carried over and were still pending in mid-March. By then, Steve counted "more than a dozen states" with pending EPR legislation. And "there is momentum behind some of them," he commented.Unsurprisingly, the "environmental" issue tends to be more common in "blue states," Steve noted. "Convenience" is a big buzzword, according to Nick Fete, director of indie retailer org the Rhode Island Liquor Operators Collaborative. Advocates like to say the programs are "free to the taxpayer," he said, but costs are "ultimately going to be passed through" to consumers. Implementing bottle deposit programs require retailers to make an "immense investment in infrastructure," with the avg retailer spending $80-100K per yr in labor alone, he explained. That inevitably turns into "higher prices on the shelf." And because of separated tiers in alc bevs, each of which mark up prices, the cost to consumers ends up being "more than the cost of the program," Steve pointed out.Deposit Problems: Piles of Money and Cross-Border Fraud A persistent problem with bottle deposit programs is the "pile of money" that accrues when deposits are collected but not all redeemed, Steve explained. His org of CA winemakers would prefer if those funds went back into the system to make it more efficient and lower operating costs, like Oregon does. But that's rare. The programs also create fraud problems, when folks cross state borders to redeem containers purchased in states without or with lower deposits, a big problem for Connecticut right now as Steve, Nick and WSWA's Ian Spotts explained.Late last wk, the Beer Inst drew members' attention to a bill moving thru the CT legislature to research ways to reduce bottle bill cross-border fraud. Potential solutions include state-specific labeling, which "would be an implementation challenge that national beverage supply chains are not built to support," per BI. At NABCA, Steve also summarized how state-specific packaging simply doesn't work.Varied State EPR Systems, But One Co to Rule Them All EPR takes the idea of a bottle deposit much further, while expanding it to a much broader set of materials: "every jar, every box" in the grocery store, as Steve said. The programs are generally overseen by govt agencies, but they're operated by designated 3rd parties called Producer Responsibility Orgs (PRO). Or, more realistically, just one PRO. Because every state implementing an EPR so far has chosen the same co as its PRO: Circular Action Alliance, a non-profit that "operates very much like a for-profit" business, Steve laid out. CAA connects with producers and sends bills based on the weight of the products sent into a given state. But there's not much clarity about how they land on the numbers, Steve shared, and some large producers are now getting multi-million dollar invoices.State variations abound, too, from the types of materials included to the costs of recycling each of those materials. Plus, every product sold in the state must have a designated "producer." Yet how you define that producer matters. Sometimes it's the actual manufacturer and sometimes it's the distributor that brought it into the state, Ian explained.Wholesaler Lawsuit Wins Injunction in OR The lack of visibility led to a lawsuit in Oregon, where the Natl Assn of Wholesaler-Distributors (NAW) sued the state over the implementation of its EPR program, Ian shared. In Feb, NAW won a preliminary injunction, but it only impacts plaintiffs, not the program as a whole. Tho some claims were dismissed, the remaining issues &mdash; delegation of state authority to a non-govt entity and traditional commerce clause issues &mdash; will be heard in July, Ian explained. The suit was driven by small and mid-sized companies, which are likely to struggle most with taking on these additional costs, he said. Other producers and other states are following closely to see how this suit goes, Steve commented.Recently, a separate lawsuit was filed in California, Beer Inst shared late last wk. It targets a new state law that "sharply limits when companies can use recyclability claims, specifically the well-known recycling logo." Such laws "increase compliance risk and force packaging changes" for the industry, the org explained.

The Devil's in the Details of EPR, New Wave Bottle Bill Proposals, Industry Orgs Explain

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