September 23, 2023

Study Says Bottle Bills Don’t Hurt Beverage Sales

I remember as a kid being able to collect glass beverage bottles and return them to the store for money. Many a piece of penny candy was funded by bottles I found lying on the ground. But bottle collection and redemption sort of faded with the introduction of plastic and aluminum. Then states began enacting bottle bills.

Bottle bills are designed to force bottlers to add a minimal deposit to their prices, usually just a nickel. The additional deposit is passed on to consumers via retail prices. When empty beverage containers are returned to the point of sale, consumers get their money back. Recycling advocates say bottle bills work. Bottlers say the bills have a negative impact on sales. But do they?

The Data Shows Otherwise

Recently released study data from the Container Recycling Institute and Reloop suggest that bottlers’ concerns are unfounded. While the research does acknowledge higher costs associated with bottle bills, it also suggests that those costs are partially offset by so many deposits remaining unclaimed.

Not only that, but consumers also continue to purchase bottled beverages whether there are deposits in play or not. They like the convenience of buying beverages in bottles. Adding $.30 to a six-pack isn’t enough to sway most consumers.

If there is a weak link in the bottle deposit chain, it is the fact that retailers need to set up means by which they can accept and prepare redeemed beverage bottles for pickup. Yet bottle redemption does not earn them any money. Whatever they put into bottle redemption needs to be recouped through higher revenues elsewhere.

The Incentive System Works

Retailer issues aside, bottle bills do work in the sense that they keep beverage bottles out of landfills and incinerators. They do so by creating incentive. Although it seems contrary to the principle of returning bottles and cans out of an altruistic sense of responsibility for the environment, the incentive system really does work. Give people a financial incentive for doing something and they will do it.

It is the incentive system that keeps companies like Seraphim Plastics in business. Seraphim Plastics is a Tennessee company that buys industrial plastic waste and recycles it in seven states, including Michigan, Arkansas, Missouri, and Indiana.

Purchasing industrial scrap plastic provides an incentive that companies need to separate their scrap, decontaminate it, and prepare it for pickup. Seraphim Plastics sends a truck directly to the customer’s location and hauls away the scrap. What they pay for the scrap is recovered after they grind the material into small pellets and sell it to manufacturers.

If There Is Money to Be Made

It is interesting to compare post-industrial plastic recycling against its post-consumer counterpart. The former has been a successful business for decades. Meanwhile, the latter has been a dismal failure. What is the difference? Incentive. If there is money to be made, someone will be willing to make it.

In the industrial plastic scheme, both recycling company and waste producer make money. Recycling companies make money by selling recycled material to manufacturers. Waste producers make money by selling their scrap to recyclers.

There is no incentive offered to consumers for recycling their plastic waste. Those who do recycle put very little effort into it. As a result, recyclers need to put far too much effort into their end of the equation, limiting their ability to make a profit.

Bottle bills are the exception to the rule at the consumer level. Mandating deposits on beverage bottles doesn’t keep every single bottle out of the waste stream, but it does send tons of bottles for recycling every single year.

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