New bottle deposit law facing a fight
Businesses: Bar-code mandate too costly to implement
CAPITAL REGION Anger by the beverage and grocery industries over New York’s expanded bottle deposit legislation is prompting state lawmakers to consider amending the law before it takes effect on June 1.
The industries say the law will drive up product costs, cause job losses, limit beverage choices and be nearly impossible to put in place by June 1.
The law requires that all redeemable bottles — including new categories of regular water and enhanced water — bear universal bar codes specific to New York state, that grocery stores of certain sizes operate a certain number of bottle redemption machines and that all redeemable beverage products sold in New York contain the new bar codes by June 1.
The state legislation also increases the 2-cent handling fee that retailers can keep to 3.5 cents and requires distributors and bottlers to pay 80 percent of unclaimed deposits to the state. The old law allowed distributors and bottlers to keep 100 percent of the unclaimed nickels.
“New York would be the first state in the nation to have a state-specific bar code. That has caused concern throughout the beverage industry nationwide,” said Mike Rosen of the Food Industry Alliance of New York State. “It takes the universal out of the term universal bar code.”
Travis Proulx, a spokesman for state Senate Majority Leader Malcolm Smith, said the state Senate, the governor’s office and the Assembly are reconsidering the legislation, approved several weeks ago.
“It has been brought to our attention by distributors that they have concerns with UPC labeling. We are asking them to produce information that there is something wrong with the bill in its current form. If their concerns are not just baseless information, then the Senate, Assembly and governor will consider amendments to the bill that passed earlier this month,” Proulx said.
The law would cost Adirondack Beverage Corp., which operates a bottling plant in Scotia, $5 million to implement, said Doug Martin, the company’s chief operating officer.
“The law will have significant ramifications for us if it is not changed,” Martin said. “Depending on the final outcome, we could end up losing business, and that affects employees and their jobs.”
Adirondack is the largest independent bottler in the Northeast, producing some 800 brands of carbonated and noncarbonated beverages. The Scotia plant employs 200 people. The company also operates a plant in Worcester, Mass.
Martin said the law would require Adirondack to double its warehouse space and run additional labeling lines, both of which he termed impractical. In addition, he said the New York-specific bar code would force some distributors to stop selling products in the state.
Martin said the law would add $1 per case to distributor costs and give some competitors an unfair price advantage. The state law, for example, exempts beverages such as Gatorade, Vitamin Water and teas from the deposit fee.
Rosen said large grocery chains like Price Chopper, based in Schenectady County, and Hannaford would see their costs increase as well. He said they would have to double their warehouse space to store New York-specific bottles and be required to purchase a certain number of reverse vending machines based on store size. The machines accept empties and provide redeemable receipts.
“The law limits retailers to a certain kind of technology that may not be state of the art two years from now and is extremely costly to purchase,” said Ted Potrikus of the Retail Council of New York State.
As for the June 1 deadline, industry officials said many distributors already have products in New York that do not contain the new UPC codes. “They would have to discard it or relabel it. It is an increase in the cost of business, which will be passed on to consumers,” Potrikus said.
Rosen said the state enacted the New York-specific bar codes to guard against cross-border redemptions. He said all the states along “our eastern border have bottle laws. It is an issue along southern and western boundaries, with New Jersey and Pennsylvania. It is a downstate issue.”