TRANSCRIPT
PUBLIC MEETING
OF THE RESOURCE CONSERVATION COMMITTEE
ON BEVERAGE CONTAINER DEPOSIT LEGISLATION
OCTOBER 19, 1977
WASHINGTON, D,C,
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An environmental protection publication (SW-29p) in the solid waste management series
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INDEX
STATEMENT PAGE
SENATOR MARK HATFIELD - Oregon 10
SENATOR PATRICK J. LEAHY - VERMONT 20
CONGRESSMAN LES AuCOIN - National Bottle Bill 31
LLOYD LEONARD - LEAGUE OF WOMEN VOTERS 40
PRED WHARTON, JR. - CONTINENTAL GROUP 49
CONGRESSMAN JAMES J. JEFFORDS - VERMONT 60
SIDNEY MUDD - NATIONAL SOFT DRINK ASSOCIATION 76
WILLIAM LANDES - NATIONAL SOFT DRINK ASSOCIATION 85
RICHARD POSNER - NATIONAL SOFT DRINK ASSOCIATION 90
BETSY HOUSTON - CRUSADE FOR A CLEANER ENVIRONMENT 100
STEVEN BURKS - NATIONAL LEAGUE OF CITIES 106
HENRY KING - U.S. BREWERS ASSOCIATION 109
PETER STROH - U.S. BREWERS ASSOCIATION 121
CONGRESSMAN WILLIAM J. HUGHES - MEMBER OF CONGRESS 128
ROGER McCLURE - SIERRA CLUB 137
JAMES BROWNELL - KEEP LOUDOUN BEAUTIFUL 147
MALCOLM W. OWINGS - THE CONTINENTAL GROUP, INC. 154
DENNIS M. DEVANEY - FOOD MARKETING INSTITUTE 167
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SUSAN J. BALDYGA - RHODE ISLAND SOLID WASTE MANAGEMENT 179
PAMELA DEUEL - ENVIRONMENTAL ACTION, INC. 183
BETSY CLASSMAN - PRIVATE CITIZEN 195
HOWARD CHESTER - STONE, GLASS AND CLAY COMMITTEE, 202
DONALD ROBINSON - DEPARTMENT OF DEFENSE 208
ROBERT A. SILVAGNI - MINNESOTA POLLUTION CONTROL AGENCY 212
DR. ROBERT TESTIN - REYNOLDS METAL CORPORATION 219
ARTHUR H. PURCELL - TECHNICAL INFORMATION PROJECT 226
WILLIAM SADD - GLASS PACKAGING INSTITUTE 230
JOHN BRIAR - MONTGOMERY ENVIRONMENTAL COALITION 238
TOM WILSON - AMERICAN IRON AND STEEL INSTITUTE 245
ELLIS YOCHELSON - PRIVATE CITIZEN 252
BRENDA MOORE - LEAGUE OF WOMEN VOTERS - FAIRFAX AREA 261
JUDY ZUCKERMAN - NEIGHBORHOOD RECYCLERS 268
DAVID E. ORTMAN - FRIENDS OF THE EARTH 275
ANN GORDON - ENVIRONMENTAL ACTION FOUNDATION 281
NANCY KOURTJIAN - EARTH ALIVE, INC. 289
APRIL MOORE - CONSUMER ADVOCATE 297
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STATEMENT PAGE
William Toohey, Jr. Society of American Travel Writers 216
Dr. Robert Testin - Reynolds Metal Corporation 219
Dr. Arthur H. Purcell - Technical Information Project 226
Mr. William Sadd - Glass Packaging Institute 230
Mr. John Briar - Montgomery Environmental Coalition 238
Mr. Tom Wilson - American Iron and Steel Institute 245
Mr. Ellis Yochelson - Private Citizen 252
Ms. Brenda Moore - League of Women Voters 261
(Fairfax, Virginia)
Ms. Judy Zuckerman - Neighborhood Recyclers 268
Mr. David E. Ortman - Friends of the Earth 275
Ms. Ann Gordon - Environmental Action Foundation 281
Ms. Nancy Kourtjian - Earth Alive, Inc. 289
Ms. April Moore - Consumer Advocate 297
Appendix I - Written Statements of Speakers
Appendix II - Additional Statements for Record
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(9:20 A.M.)
THE MODERATOR: Ladies and gentlavn, good morning
and welcome to the public meeting on the Federal Beverage
Container issue called by the Federal Interagency Resource
Conservation Committee, established under Public Law 94-530,
the Resource Conversation & Recovery Act of 1976..
As you entered, you should have received a
registration form and a tentative agenda. Please fill in
the registration form and some time during the day, turn it
in at one of the desks in the lobby.
All of you are requested to register so that we
have a complete record of the meeting and could provide each
of you with a transcript of today's proceedings.
The record, by the way, will be open until
November 2nd for the receipt of written comments. If you
think of something to say later, you have time to put it in
writing.
Public telephones and stairs to the lower corridor
are located at the end of the lobby. Additional telephones
and rest rooms are available at the foot of the stairs in
the lower lobby.
A table for the press is located on my left.
Cafeteria services are available downstairs immediately
«t »«;«Uklt
under this room. Additional services^across the street at
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the Smithsonian Museum of History and Technology. AM. the
directional signs in the lobby. The cafeteria is open from
11 to 3 and includes a snack bar which is open from 10 until
5.
The limited quantity of publications are available
in the lobby. They include the first report to Congress —
the first report to Congress, I'm sorry, on the implementa-
tion plan of this Resource Conservation Committee; the
fourth report to Congress on Resource Recovery and Haste
Reduction and a draft — I emphasize draft background paper
which has been prepared by the Resource Conversation
Committee staff.
And now to discuss briefly the purpose of this
meeting and to introduce the representatives of the several
agencies which make up the Committee, it is my pleasure to
introduce Ms. Barbara Blum, Deputy Administrator of the
Environmental Protection Agency and Chairman of the Senior
Advisory Group of the Resource Conservation Committee. Ms.
Blum.
MS. BLUM: Thank you, Tom. Again I want to
welcome you. I am sorry we are getting started late. It
was caused by the shift in the auditoriums because we wanted
to leave more room in case more people showed up later in
the day.
As we said in the invitation, the purpose of this
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meeting is to find out as much about your thoughts as
we possibly can. We're here to listen, we plan to listen
as carefully as we can and we plan to take into consideration
of all phases of our planning, your suggestions.
I would like to reiterate that we are going to be
giving full consideration to both oral and written comments.
If you would like to submit written comments for the record,
the record will remain open for two weeks.
The Resource Conservation Committee, I think as
most of you are aware, is an interagency committee that was
established by Congress with a two-year life. We have a
final reporting period of October 1978.
The purpose of the Committee is to study a wide
variety of public policies that regard resource conservation
and to make recommendations to the Congress and also to make
recommendations to the President.
This is the first in a series of public meetings
that are going to be held. We've scheduled additional
meetings next month regarding the issue of product charges.
There will be notification going out to everyone who receive
notices for this meeting but I shall just briefly tell you
that we'll be holding one here in Washington on November 17tJ-
in Covington, Kentucky, which is across the river from
Cincinnati on November 18th and in Portland, Oregon on
November 21st.
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If you didn't get an invitation to this meeting
and you would like to have information on the next meetings,
please leave your name and your address at the registration
desk and we promise you that you'll receive them.
Now I'd like at this point to very briefly
introduce the representatives of the various departments
and agencies today beginning on my right from the Department
of Energy, we have Mike Lobe.
On his left, from the Department of the Treasury,
Bill Steiger. Then from the Office of Management and Budget,
Tezi< .
Jim Tg»*e fphv-). From the Department of Labor on my
immediate right, Hugh Pitcher.
On my immediate left, Dick Herps from the Departmen|t
of Commerce. Next to him, Jim Holt from the Department of
Interior and Toby Clark, Dr. Edwin Clark from the Council of
Environmental Quality.
I suspect the composition of this group will change
from time to time as the meeting progresses, but there will
be representatives from various agencies here, we anticipate
at all times.
However, as I said before, the proceedings of this
meeting both oral and written — and let me emphasize both
oral and written — are going to be published for very
careful review by the staff. Those papers will be available
at EPA for anyone's review who wants them.
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We'll try to make them available also at other
locations if there is a demand for that.
Once again, I want to welcome you and thank you
in advance of your comments.
THE MODERATOR: Thank you. It is important to the
Resource Conservation Committee that each of you who wishes
to make a statement today will be able to do so. So that
everyone can be accommodated, it would be appreciated if you
would give the highlights of the specific point you want to
make in a formal statement.
Try, if you possibly can, to hold them close to
five minutes and turn in your full statement, as I said
before, to one of the registration — at one of the regis-
tration tables in the lobby.
Those of you whose names are not on the agenda but
who wish to make prepared formal statements and notify us of
that this morning, can sign up at one of the tables in the
lobby and your name will be placed on the agenda.
This is, as you will note, the opportunity to make
comment, whether you have a prepared statement or not in
both the morning and afternoon.
One final remark on this housekeeping agenda. For
the benefit of the court reporter who is making a formal
transcription of the meeting, each person who does make a
statement is requested to appear at a microphone and to
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identify him or herself and to give his or her affiliation.
This applies also to committee representatives
who may desire to make statements.
Now as we said earlier, this is a tentative agenda
and I ask the indulgence of the League of Women Voters, the
Continental Group — and the Continental Group — as we
suggest that the first speaker today whom we're pleased to
have is Senator Mark Hatfield of Oregon. Senator Hatfield?
VOICE: Mr. Chairman, —
THE MODERATOR: Is Congressman Hughes here?
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STATEMENT OF SENATOR MARK HATFIELD - OREGON
SENATOR HATFIELD: Thank you, Mr. Chairman,
members of the Committee. 1 would like first of all to
express my deep appreciation for the privilege of appearing
before you this morning and to compliment you for the fine
work that you have undertaken on this important subject.
I am Mark Hatfield, Senator from the State of
Oregon where for five years we have had the practical,
pragmatic experience of not only having enacted the first
returnable bottle and can beverate container act but having
this kind of record of experience, I think we can speak with
some authority.
As you know, the State of Vermont also has, since
1973, experienced this type of legislation and can provide
material for your record as well. More recently, the States
of Maine and Michigan have adopted similar legislation and
a number of localities such as county jurisdictions have
also followed suit.
Now since 1973, I have introduced a bill in the
United States Senate which is patterned after the Oregon
program and we have had a hearing before the Senate Commerce
Committee. We have had a hearing before the Senate Energy
and Natural Resources Committee and the full Senate undertook
some discussion, debate on this in 1976 when I attempted to
attach the proposal as a rider to another bill.
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Since that time, the Environmental Protection
Agency has adopted regulations as it relates to federal
facilities and more recently, the National Commission on
Supplies and Shortages have endorsed the concept.
To members of this Commission, I would like to
emphasize this morning the obvious and that is that we live
on a finite globe which means that we have a. limitation to
our resources, our natural resources, and I think we must
therefore employ all methods to reduce waste and to conserve
our resources.
I would suggest that particularly since World War
II, this nation has been on a binge. We have been on a
binge and erected in that experience two false gods in our
society.
One is the throwaway convenience concept. The
throwaway is one and the convenience is the other. We have
the idea of disposability in our mind, paramount in the
marketplace . It's been whetted by the advertising industry
and oftentimes products that had been promoted that really
where there is no appetite and the appetite has had to be
engendered.
So consequently, with waste that is so apparent on
all hands, I think we must displace this throwaway ethic
that's been developed in our sbciety with a return to the
conservation ethic.
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The scarcity of materials, the fact that we have
energy problems today, cannot be solved within this throw-
away ethic society. Pollution is a great concern of ours
today but one form of pollution which receives lesser
attention than air and water is the litter pollution.
Along our parks and roadways, we have much evidence
of this kind of pollution and I think, therefore, that the
record of the State of Oregon and other jurisdictions are
very pertinent to this subject.
We have a 90 percent approval of our people after
this period of time in the State of Oregon and I grow weary
of hearing people say — who oppose this kind of legislation
that Oregon is composed of ecological nuts and environmental
extremists.
The people of Oregon are traditionally very
progressive and that we plead guilty to and I believe,
though, that the people of Oregon are much like people
elsewhere in the United States; they have to see the
evidence and they have to understand the problem before
they're willing to support it.
We have had about a 95 percent participation in
our program in the State of Oregon.
Now, what do the opponents argue? Well, the
opponents, whether they come from management or from unions,
and you will find most generally in these meetings an unholy
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coupling of this great free enterprise components of
management and trade unions, in opposition — stepping down
the aisle here to the podium to tell you all kinds of fear
and horrow stories.
We have heard them in Oregon. They came in numbers
they came — if all their pressure tactics in the State of
Oregon to our Oregon legislature and they shouted the great
cause of -^unemployment that would follow this kind of
legislation.
u*
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the Returnable Beverage Container Act. There are other
o
factors that have changed the patterns of employment in this
o
country and they should address themselves to that issue
rather than trying to find some kind of a scapegoat to
" II blame some of the basic changes that are occurring anyway.
In Oregon after the first year, we found that in
7 the beverage container related industry, we had an increase
8 in employment of 365. Now admittedly that these were not
9 all the same types of jobs that existed before. These were
not necessarily all the manufacturing type of jobs but in
11 the total picture of employment, we had an increase.
Now, my proposal in the Senate that is resting
13 quietly in the Senate at this moment is conceived to have a
phase-in period of three years which would mitigate against
great dislocation or changes or adjustments.
I6 Don't forget, ladies and gentlemen, that when the
I7 telephone company came up with the dial system, there was a
18 great cry that we would have high unemployment because it
19 would throw all the operators out of business. Today, there
20 are more operators in the telephone system than before the
21 dial system came into existence.
22 Then we hear about prices and this to me is really
23 one of the most ludicrous of all the opposition arguments.
24 For some reason, they try to convey the attitude that if you
25 can use a throwaway container that you're going to have
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cheaper prices, then if you had a shared cost container
which can receive 12 to 15 uses in one bottle.
Well, that shared cost container and according to
most studies that I have seen would indicate that we can
reduce the cost from 2 to 5£ per drink. Now I think also
you have heard a great deal of argument about this is
something that is relatively new and therefore it's some-
thing that should be very cautiously approached.
As late as 1960, 95 percent of the soft drinks
and 50 percent of our beer were sold in returnable containers
so consequently, besides the record of recent years of five
states and several localities, we have had a long tradition
in history of returnables and how the industries functioned
then.
I think also that the argument that this may work
in local areas but not the national picture is again
fallacious. I think that's what the federal system is all
about.
Federalism was conceived for experimental purposes
at the state and local levels before we try something at the
national level and as a consequence, I think the records at
those local levels have proven that it is now time to adopt
it at the national level.
I think, too, that you will hear the arguments
that somehow these areas are rural in character and therefore
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that we — with strong ecological commitments and so
consequently might not apply in the great urban centers.
I suggest that the 54 incentive not to litter
would be just as effective in New York City as it is in
Baker, Oregon which is a rural community.
We had our skeptics, as I indicated, in the State
of Oregon about the various results that would come from
this bill. Let me just cite in closing one very interesting
statistic or two.
We had a program, three-year study of highway
litter conducted by the Oregon State Highway Department.
During this survey, 30 random selected one-mile stretches
of road were studied for the three-year period and the study
began one year before the adoption of our law and before it
was implemented and it continued through the second year of
the law's exlafeence.
This survey by the Oregon State Highway Department
showed a very significant reduction in beverage container
litter. After one year, it was shown to be 72 percent
reduced and after two years, we found the amount of beverage
container litter was reduced 83 percent.
This was accomplished, let me emphasize, with no
increase in litter clean-up expenditures or activity on the
part of the State. More recently, the Oregon Journal
Newspaper completed a study of ten one-mile stretches of
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highway in Oregon and across the river in the State of
Washington and with comparable volume of traffic.
Oregon's roads, thanks to the returnable beverage
container program, were found to have 7.5 percent times less
beverage container little than those in Washington and the
State of Washington has opted for the litter tax approach
and I would suggest in passing that the litter tax assumes
that somehow you have a right to litter if you are just
willing to pay for it which I reject as a philosophy.
And so you do have a very difficult task at hand
and I would not be here this morning to in any way over-
simplify your problem but I do want to say that because of
the experience in the State of Oregon and other localities,
I believe that this is long past due at the federal level
and I want to say that your action here today and the days
to follow and if you come up with an affirmative recommenda-
tion, could be very helpful to us at the legislative level
in passing such a bill through the Senate and the House. I
want to thank you.
(Statement follows.)
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THE CHAIRPERSON: Senator Hatfield, thank you so
much for coming. May I ask you one question?
SENATOR HATFIELD: Yes, please do.
THE CHAIRPERSON: You have what is certainly
considered by the citizens of your State of Oregon, you have
a very successful law there. How do you feel about the trenc
toward the individual state legislation versus national
legislation which would have a tendency to standardize
beverage container deposit legislation?
SENATOR HATFIELD: If I were a member of industry
in the soft drink or beverage industry, I would feel that a
uniformity would be far better than having the states adopt
one at a time or a few at a time such legislation because
there have been adjustments made to maintain the market in
the State of Oregon with this kind of law and they have had
to make such adjustments both in the container design because
in our state, we have no flip-top as part of a law.
In other words, even though it's returnable, it
cannot be a flip-top so consequently, they have had to adapt
to that particular provision of law. I would think that it
would be far better therefore to have a national standard
for this design and it would be more economical for the
industry.
Also, I feel that it's a slow process. This is a
national problem, the litter problem, the solid waste
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1 problem. The conservation need in this nation is nationwide
2 and therefore I would feel that the national approach would
3 be more preferable.
4 THE CHAIRPERSON: Thank you very much, Senator.
5 SENATOR HATFIELD: Thank you very much.
6 THE MODERATOR: Now I ask, please, the further
7 indulgence of the League of Women Voters and the Continental
8 Group.
9 Senator Leahy of Vermont has arrived. Will you
10 please take the stand?
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STATEMENT OF SENATOR PATRICK J. LEAHY - VERMONT
SENATOR LEAHY: Thank you very much and I'm
pleased to be able to follow Senator Hatfield who has done
so much in this area and I'm pleased to be here today to
testify in support of federal beverage container deposit
legislation.
I'd like to make some general comments and
observations of the need for this legislation. I'd like to
then outline experience that we've had in Vermont since we
enacted a similar law in 1975.
As you may know, Oregon and Vermont were leaders
in enacting a returnable beverage container law. Since then
Maine and Michigan have enacted similar statutes. The South
Dakota legislation is scheduled to take effect in 1978.
Senator Hatfield's bill, S. 276, the Beverage
Container Reuse and Recycling Act of 1977, already has
numerous co-sponsors and I'm proud to be one of those co-
sponsors and some of you may remember our efforts in the
Senate, again led by Senator Hatfield, to attach S. 276 as
an amendment to the Resource Recovery Act.
Unfortunately, we were unsuccessful, but a study
requirement was included in the bill and that study require-
ment, I believe, is largely responsible for the public
hearing we're having today.
Enactment of this or similar legislation should be
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an integral component of any national energy program we
pass in the 95th Congress because how can we say we're
serious about energy conservation if we encourage prolifer-
4 ation of throwaway beverage containers and with it, the kind
5 of throwaway life style that places a heavy and unnecessary
burden on our limited energy resources?
7 It is interesting to note that in 1960, we drank
8 95 percent of our soda pop, 50 percent of our packaged beers
9 from refillable containers. Today, nearly 80 percent of the
10 packaged beer and two out of three soft drinks are consumed
11 in no-deposit no-return bottles.
12 As a result, we are now using 60 billion beverage
13 throwaways annually which adds some 9 million tons of trash
14 to our national garbage. This 20 year shift from the use of
15 refillable containers for distributing beverages to a one-way
16 system has created a number of problems and I see significant
17 corrective benefits accruing from national bottle legislation
18 Number one, it would result in a significant
19 reduction of litter. Beverage containers account for almost
20 25 percent by number and 62 percent by volume of all litter
21 and their size and visability make them particularly
22 noticeable.
23 Beverage containers comprise a rapidly growing and
24 expensive segment of municipal waste — an estimated growth
25 rate of 10 percent per year between '62 and '72. The Bureau
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of the Census has reported that litter control takes the
largest share of state solid waste management budgets and
according to one estimate, if 90 percent of the containers
bearing a deposit were returned for refilling or recycling,
there would be a reduction of 70 to 75 percent in beverage
container waste or 5 to 6 million tons on a national basis.
With an 8 percent current growth rate, beverage
containers currently comprise about 7 percent of municipal
solid waste. The total number of non-refillable bottles
and cans used for beer and soft drinks is expected to double
by 1985.
National bottle legislation would address this
issue by restoring the economic incentive for individuals
to collect and return containers.
I might add as a personal note, in my own home in
Ourf"
Vermont, we have running along through «* property about,
oh, half to three-quarters of a mile of dirt road that
borders — actually divides our home and every spring, my
wife and I and children normally in the past, would go out
and clean up the litter on that. It's not a road that's
used all that much for that matter and we would take several
of these large garbage bags full of litter — and we would
take a day or so to do it after the first spring thaw.
Today, we can go out and do that in about 20
minutes along that whole line when spring time comes. I
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know that children in Vermont spend a great deal of time
going up and down the road just trying to find bottles
because they get deposits back on them but they find very,
very few.
Number two, it would result in a reduction in
municipal waste processing costs. Many solid waste collec-
tion and disposal services are not billed in proportion to
the amount of waste generated.
This shift to throwaways has significantly
increased the solid waste burden without paying the
additional costs. A national deposit system would divert
almost all beverage containers from municipal waste into
reuse or recycling programs.
And third, it would result in a reduction in
consumer costs. In 1972, the president of Coca-Cola, U.S.A.,
told Congress that Coke sold in food stores in non-returnable
packages is priced, on the average, 30 to 40 percent higher
than in returnable bottles.
The Pepsi-Cola franchiser in Portland, Oregon,
estimates that using refillable bottles reduces the containei
cost per filling to less than a penny, compared to 4 to 7*
for throwaways.
A 1971 University of Illinois study concluded that
changing from throwaways to refillables would save consumers
about $1.4 billion annually and since beer and soft drinks
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sold in refillable containers are generally cheaper to the
consumer than beverages sold in one-way containers, mandatory
deposit legislation should result in a decline in beer and
soft drink prices to the extent that the legislation induces
a shift to refillable bottles.
Fourth, it would result in energy savings.
Beverage containers that are refilled or recycled save
energy and materials. With a bottle law, approximately
200 trillion BTU's could be saved annually which is
equivalent to the energy content of 39 million barrels of
oil.
Fifth, it would significantly reduce air pollution
from manufacturing — a system using one refillable bottle
that will make ten round trips creates less than half the
air polluting emissions of a system using ten single-use
cans or ten one-way bottles, and it's four times as
efficient in holding down industrial wastes.
Now let me just speak briefly after what's
happened in Vermont. The Vermont statute requires a 5*
deposit on all containers for malt beverages, mineral waters
and carbonated soft drinks.
As of January 1 .of this year, it also bans pull-
tabs , throwaway bottles and plastic rings and other non-
biodegradable carrying devises. Bottles must be certified
as capable of being refilled five times.
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* Our experience with the statute has been extremely
2 positive. Litter has been greatly reduced. As I mentioned
3 before, after one year, after just one year of the law, the
4 Vermont Highway Department reported that roadside litter had
5 been reduced by 76 percent and that all litter declined by
6 33 percent.
7 A 50 percent reduction in state employee man-hours
8 devoted to litter pickup was also reported. It is a
9 significant saving to the taxpayers of Vermont. Consumers
10 have experienced savings.
11 Prices that consumers pay for beverages in
12 Vermont have risen less rapidly than in neighboring states
13 which do not have deposit laws. For example, prior to
14 passage of the law, Vermonters paid an average of
15 approximately 30$ more for a six-pack of beer than did the
16 people in New Hampshire.
17 The price of soft drinks was about 5 to 8£ per
18 quart higher in Vermont. Since the law's enactment, the
19 price differential in beer has decreased by 80 percent to
20 6
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refillable bottles.
Using the FEA formula for computing energy savings
the Vermont Agency of Environmental Conservation estimated
that Vermont's deposit law conserves approximately 651
billion BTU's of energy annually, the energy equivalent of
more than 4.5 million gallons of No. 2 fuel oil.
Now that's in a very, very small state, a state
of slightly under half a million people.
The municipal waste problem is being eased. Space
in sanitary landfills is being saved. The beverage container
law also enjoys a high level of public support. For example
we have a 95 percent container return rate.
And even the retail grocers, who had initially
expressed almost unanimous opposition to the law now support
it. And in my own mail, polls that we've seen, the vast
majority of people in the state support it.
I think that another example of this is the very
proper amount of respect that's been shown to my colleague
JsftwJU
in the House, Congressman Jim 3e££*f&s (ptr^) who has spent
a great deal of time going around the country in favor of
the kind of legislation that he has introduced, that Senator
Hatfield has introduced, that I've co-sponsored and pointing
out to the support that it's received in the State of
Vermont from all groups, including all groups that violently
opposed it.
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So in closing, I'd like to note that national
deposit legislation does enjoy an impressive amount of
public support. It's been endorsed by the U.S. EnvironmentaJ
Protection Agency, the National Commission on Supplies and
Shortages, the National League of Cities and the National
Association of Counties.
Interior Secretary Andrus announced in July that
all areas of the National Park System that sell beverages in
cans or bottles were putting the 5£ refundable deposit into
effect.
The only exceptions allowed were for beverages
purchased for consumption on the premises and for beverages
purchased from cup-dispensing vending machines. A test
program conducted from May to September of '76 by the
Department of the Interior at Yosemite National Park showed
that 70 percent of the containers were returned.
Thirty tons of recyclable aluminum, glass and
steel were recovered compared to one ton when it was
voluntary. Thirty times what it was when it was voluntary.
So I sincerely hope that President Carter will
make enactment of mandatory deposit legislation a priority
item on the legislative agenda. I hope that that will be
the ultimate recommendation of this panel and I thank you
very much for the time to be able to be here.
(Report follows.)
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THE CHAIRPERSON: Senator, thank you, for taking
time out of your busy day to come. We do have one question.
Hugh Pitcher of the Department of Labor had a question for
you.
MR. PITCHER: You stated a number of very positive
aspects of such legislation. There are on the labor side,
perhaps some dislocations which occur which affect
particularly glass manufacturing.
I wonder how you would suggest we should handle
these kinds of dislocations which may in specific cities be
rather severe?
. SENATOR LEAHY: I think I would want to see the
specific dislocations being referred to and it would be far
easier to answer. I suppose any program brings with it both
dislocations and improvements.
I would also point out that there are a certain
number of jobs created and maintained just through the
handling and the reuse of refillables and there are some
studies that have come to the conclusion that there is
actually a net gain in jobs available in going to a
returnable system.
There is also, of course, the fact that if we
continue to use energy at the prodigious rates that we are in
this country and resources at the rates that we are in this
country, that again, the net result is going to be a very
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29
substantial loss of jobs everywhere.
So that any effort that has major energy conserva-
tion as one of its primary goals, there may be a short term
loss of jobs at some levels. I suspect that the long term
though is an increase. As I say, there have been studies
made in using particular analyses which showed there would
be an increase in this but to answer your question very
specifically, I think I would have to see the specific place
for the jobs to be lost, the specific plan of recycling that
was being proposed and I think it would be much easier to
answer on that basis.
MR. PITCHER: Maybe I could rephrase it slightly.
Do you think we should make specific provision in
the bill to handle labor dislocation or unemployment that
can be specifically attributed to the passage of national
container deposit legislation?
SENATOR LEAHY: I think that if we find that there
are going to be substantial disruptions or substantial dis-
locations, yes — we could consider it but I would want to
see the study very, very clearly done.
For example, in Vermont, it did not result in a
single less job by doing this and I would hate to see — to
get hung up on the question of relocating jobs if indeed
there was not going to be a loss. I would want to see the
study showing specifically how many other jobs would be
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30
picked up in the recycling aspects of it.
If there was a serious dislocation created by
this, I would think that at least on a temporary basis, the
legislation should be involved with ameliorating that
situation but I don't think that we should jumpfc to the
conclusion that's going to happen.
MR. PITCHER: Thank you.
THE MODERATOR: Thank you, Senator Leahy.
Our next speaker — I ask the indulgence again of
those who have already been indulgent and add to it the
National Soft Drink Association — so that we may hear
Congressman AuCoin of Oregon.
Congressman AuCoin, please.
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STATEMENT OF CONGRESSMAN AuCOIN - OREGON
CONGRESSMAN AuCOIN: Thank you very much, Mr.
Chairman and ladies and gentlemen of the panel.
I am Congressman Les AuCoin and today I am very
pleased to have the opportunity to testify in behalf of the
National Bottle Bill and I am particularly pleased to be
able to join and reinforce the comments of my colleague from
Oregon, the Senior Senator, Senator Hatfield.
I represent the First District in Oregon in the
Congress and as a state legislator in 1971, I served on the
legislative committee that wrote Oregon's first-in-the-natioi
bottle bill.
It has been five years since the Oregon State law
went into effect, five years of continuous satisfaction with
a great experiment, an experiment that puts a price on the
head of every beer and soft drink container sold within the
State of Oregon.
Despite the overwhelming success and public
acceptance of this new law, nationally it has been subjected
to abuse, ridicule and lies in some instance by industries
determined to protect their wrong-headed, anti-consumer and
what I regard as socially bankrupt way of doing things.
Bottle bill legislation has literally been studied
to death. In every study uncolored by industry bias, there
has been the conclusion that has been the same, namely that
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32
states and national container deposit legislation reduces
litter and solid waste, saves energy and creates jobs.
In cases where the law is in effect, consumers pay
no more for their beer and pop and often they pay less and
the beverage industry profits are up, not down. Regardless
of what the opponents of Oregon's bottle bill may tell you,
the key fact concerning the impact of the law are beyond
debate.
Let me make six points. Fact No. 1, beverage
container litter along highways has been substantially
reduced as Senator Hatfield has pointed out. In the first
year in Oregon alone, the reduction was 72 percent.
And this Oregon ethic as illustrated by the Oregon
Bottle Bill, apparently led people in Oregon to be more
conscious about litter of all kinds, for in the same period
of time, the total items of litter were decreased by 26
percent.
Now you' may have an industry spokesman come before
you with a different story. In 1974, an Oregon public
relations agency hired by the beverage and container industry
claimed that Oregon's own figures for that summer of '74
showed a 127 percent increase in beverage container litter
for a three month period within our state.
It was subsequently shown, however, that the
figures supplied by the Oregon Highway Division were not
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33
accurate and that one litter sample, for example, had
actually been counted twice in that computation.
The truth is that for the months in question,
there was a 20 percent reduction in beverage container
litter in the State of Oregon. The industry has been advised
of this miscalculation but for reasons of its own has not
seen fit to issue a correction.
Fact No. 2, the Bottle Bill in Oregon reduces the
amount of litter going into the solid waste stream. From
1959 to 1972, beer and soft drink consumption in the United
States climbed 33 percent.
The number of beer and soft drink containers
consumed in this country skyrocketed by 221 percent. About
6 percent of the solid waste in this country is comprised of
beverage containers.
The financial burdens of dealing with this waste
is heaped upon society and of course, this may be one of
industry's delights. It has no responsibility for disposing
of the 90 billion containers produced annually and thus does
not bear the cost.
It should be clear that if this country is
producing 90 billion beverage containers a year and most of
them are non-returnables, they must not be going back into
use. They're going somewhere else instead, mostly into the
oceans or streams or rivers or along roadsides or into
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34
1 sanitary landfills.
2 It is a terrible waste of money and a dreadful
3 abuse of the environment and a waste of resources.
4 I Fact No. 3, despite industry claims, beverage sales
5 I will not be adversely affected, at least based on the Oregon
6 experience. A brewing industry spokesman recently told the
7 Washington Post that he opposed the bottle bill because beer
g sales would fall.
9 The argument doesn't hold water. Or beer, for
10 that matter. From 1973 to 1976, the first three years after
11 II Oregon's law went into effect, beer consumption in my state
12 I increased by almost 6.5 million gallons.
13 The figures are based on actual tax receipts, not
J4 estimates.
15 Fact No. 4, the industry has profited, not lost,
1$ after the passage of the bottle bill in Oregon. Mr. Ted
17 Gamble, the Pepsi-Cola bottler in Portland, Oregon, reported
18 late in 1973 that both his sales and his profits were up in
19 the year following the adoption of Oregon's bottle bill.
2Q Prices for beer and soft drinks in Oregon were then
and are now comparable to those in other western states.
Call up any half-dozen retailers in San Francisco, Portland
23 or Seattle right now and you can prove this for yourself.
24 Fact No. 5, the bottle bill saves energy. The most
25 recent studies indicate that a national container law would
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35
1 result in the savings of at least 70,000 barrels of oil a
2 day.
3 A study done for the Environmental Protection
4 Agency says that Oregon's conversion to a returnable bottle
5 saves 1.3 trillion BTU's a year. That's equivalent to the
6 natural gas required to heat 11,000 Oregon homes every year.
7 A 16-ounce non-returnable bottle consumes four
8 times the energy of a returnable bottle of the same size,
9 assuming only eight trips for the returnable bottle. A
10 12-ounoe throwaway is 3.8 times more energy-expensive than
11 a 12-ounce returnable bottle.
12 These are facts which should be heeded by a nation
13 which is battling an energy crisis.
14 Fact No. 6. The Bottle Bill creates jobs. I
15 recognize that there will be a shift from container manufac-
16 turing to bottling plants and retail stores. But that is
17 partly why every proposal for a shift to non-returnable
18 includes a phase-in period, to ease the impact, to afford al
1$ parties a decent chance to make the transition with minimum
2o disconfort as was the case in Oregon.
2i But there is another aspect of the so-called jobs
gg problem that has not, in my judgment, been properly consider
23 The rise of the throwaway was a trade off of energy for jobs
24 With breweries able to make their product in regional center
25 spreading all over the map because they no longer had to
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36
worry about getting their bottles back, the big got bigger
and the small became almost nonexistent.
The number of breweries is down by half from 1958.
Former EPA Director Russell Train said that in the period
from 1958 to 1967, the number of persons employed by
breweries dropped by 15.6 percent with an annual payroll
loss of almost $100 million.
Minnesota alone lost seven breweries from 1962 to
1974. A returnable system means some job shifts, but more
total employment. The throwaway system has cost America
jobs and has led to the demise of a lot of local industry.
Given all of the alternatives, ladies and
gentlemen, clearly it seems to me that the returnable
container system is a superior one. The Oregon Court of
Appeals did a superb job of summing up what the Bottle Bill
is all about when it released an opinion declaring our law
in Oregon constitutional.
The Court said this, "The availability of land and
revenues for solid waste disposal, the cost of litter
collection on our highways and in our public parks, the
depletion of mineral and energy resources, the injuries to
humans and animals caused by discarded pull-tops, and the
blight on our landscape are all economic, safety and esthetic
burdens of great consequence which are being borne by every
member of the public."
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37
Ladies and gentlemen, those costs can be reduced,
the blight can be halted with the adoption of Oregon's
Bottle Bill as a national law. It is time — in fact it is
well past time — to get the job done.
I appreciate the opportunity to come before you
today.
(Report follows.)
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THE CHAIRPERSON: Thank you, Congressman AuCoin.
Dr. Clark from CEQ has a question.
DR. CLARK: Congressman AuCoin, I was very
4 I interested in your comments and I wanted to follow up on
5 some of your statements about the local employment impact.
6 I'm particularly interested in the impact of the bill on
7 small businesses in Oregon. I presume that there were some
8 small bottling plants and perhaps some breweries there? Have
9 they been adversely impacted by the law or have they been
10 helped?
11 CONGRESSMAN AuCOIN: We allowed for a phase-in
12 period and I would have to provide concrete information for
13 the record because I do not have that with me today. Because
14 of the phase-in, those job loss-job shift adjustments were
15 really minimized and I think this is really one of the unique
16 facets of the Oregon story in its passage of the first state
17 law in the country, that minimization of job disruption.
18 DR. CLARK: But you're not aware of whether there
19 is a differential impact on the national bottlers versus the
2Q local bottlers?
CONGRESSMAN AuCOIN: Let me provide the figures
for the record.
DR. CLARK: I'd be very interested —
24 THE CHAIRPERSON: Thank you very much.
25 THE MODERATOR: Now I return, I believe, to our
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40
1 STATEMENT OF LLOYD LEONARD - LEAGUE OF WOMEN VOTERS
2 MR. LEONARD: Madam Chairman, members of the
3 Committee, I am Lloyd Leonard of the professional staff of
4 the League of Women Voters of the United States. I am
5 presenting this testimony on behalf of the League and its
6 137,000 members throughout the country.
7 I will also be submitting a statement by the League
8 of Women Voters of Vermont who were not able to send a
9 representative this morning.
10 The League of Women Voters of the United States
11 strongly urges that the Resource Conservation Committee
12 recommend federal beverage container deposit legislation to
13 President Carter and the Congress.
The benefits to be gained in solid waste and litter
15 reduction, in energy and materials savings and in lower costs
18 to consumers provide overwhelming justification for such a
17 recommendation.
In 1973, after a two-year study of our nation's
solid waste problems, the League adopted a position on solid
2Q waste management that calls for reducing the amount of waste
we generate, recovering usable resources from the waste
stream and safely disposing of the remainder.
Since reaching agreement on that position, local
_. and state Leagues as well as the League of Women Voters of
25
the United States have spoken out again and again in support
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41
of federal deposit legislation.
Statements submitted to this Committee by the
Fairfax County, Virginia League and the Vermont League
reiterate that message.
A federally enacted beverage container law is
essential to stem the growing tide of discarded cans and
bottles now estimated at 65 billion containers annually
that waste energy, resources and money.
Experiences in Vermont and Oregon and studies by
the federal government itself demonstrate the potential
benefits of a mandatory deposit law including a 40 percent
reduction in litter volume; a $260 million savings in solid
waste collection and disposal costs — a particular benefit
to strained local government budgets.
A savings of over 40 percent of the energy needs o
the beverage industry; a significant reduction in raw
materials consumed by that industry and major reductions in
air and water pollution by the beverage industry.
Moreover, all studies to date conclude that the
shift to a mandatory deposit system will result in a net
increase in jobs with estimates ranging from 60,000 to
115,000 new jobs.
The League of Women Voters Education Fund recently
published an analysis of the relationships between employment
and environmental controls. In discussing deposit laws and
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42
jobs, the publication noted that the Oregon experience can
provide useful information on job impacts since the law has
been in effect since 1972.
A study by Drs. Gudger and Bailes found that in
Oregon, although 350 jobs were lost in production labor, 575
new jobs were added in warehouse and handling and 140 more
in truck driving — a net gain of 365 jobs.
Another study by Applied Decision Systems
estimated the net job gain at a lower figure, somewhere
between 55 and 116. These figures are lower partly because
ADS found that retailers tended to increase the workload of
existing employees rather than hire new ones.
In 1975, League members in 24 states cooperated
with EPA to survey the costs of beverages in refillable and
throwaway containers. The price comparisons they made led
to the conclusion that beverages in refillable containers
are cheaper for consumers.
A later study by the Research Triangle Institute
estimated that under a mandatory deposit law, consumer
savings would range from almost half a billion to $3 billion
annually.
The League surveys also touched on what some
consider a cost of a beverage container deposit law — the
loss of convenience resulting from the need to return
empty containers.
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43
League members found that the current system in
which throwaway containers predominate imposes a substantial
inconvenience on those wishing to use refillabie containers.
They found that brand and size selection of soft drinks in
returnable containers was considerably less than the
selection in non-returnables.
In most instances, beer was not even available in
refillabie containers.
In general, we find the arguments about the
inconvenience resulting from mandatory deposit legislation
to be without merit. Consumers in Oregon and Vermont have
demonstrated that the vast majority of purchasers will return
their used containers and the ever present need for money by
scouts, religious organization and other groups provide them
with incentive both to collect used containers from house-
holds not choosing to return them and to gather discarded
containers.
A shift to a mandatory deposit system accompanied
by public education on the befits of returnable containers
can accomplish still another objective — a reinforcement of
the message that in a world of finite resources, both energy
and materials, conservation, recycling and reuse can become
a part of our lives without disrupting our lifestyles.
The League does not believe that any of the
alternatives to deposit legislation would be adequate
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44
substitutes, although some may be suitable as complementary
approaches to solid waste management.
A litter tax does not reduce the share of beverage
containers reaching municipal solid waste streams. It is
generally estimated that three-fourths of beverage containers
are thrown in the trash.
Costs of their collection and disposal must then
be borne by the taxpayers. Litter taxes neither prevent
litter nor provide economic incentives to individuals to
pick up and return littered containers.
Voluntary source separation and public education
programs have not been effective in achieving high rates of
container return or litter reduction. Neither can create
the resource, energy or economic savings of a mandatory
deposit program.
Direct recycling incentives, while useful in
encouraging recycling, are less beneficial than the direct
approach of mandatory deposit legislation. An emphasis in
the litter system on direct reuse would promote far more
energy and resource conservation and pollution reduction.
A solid waste disposal charge system has the
primary defect of not substantially reducing solid waste
generation, although it could be instituted in addition to
a mandatory deposit law and would have the effect of
internalizing waste disposal costs, its benefits in reducing
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45
litter and encouraging a conservation ethic would be
minimal.
In conclusion, the League of Women Voters again
urges this Committee to endorse a federal beverage container
deposit law. We do not deny that a return to returnables
will require some readjustments in terms of labor, manufac-
turing processes, retail operations and consumer habits.
But we do think that the benefits derived from
such a system will far outweigh the costs. Although
environmental improvement programs usually carry a price tag,
experience shows that the long term benefits from such
programs surpass short term costs and inefficiencies.
The experiences of Oregon and Vermont and at
federal facilities using deposit programs show that these
systems are acceptable to the public and effective in
achieving their objectives. It is time to institute a
beverage container law for the entire nation.
Thank you very much.
(Report follows.)
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THE CHAIRPERSON: ^ Thank you. Are there any
-
questions? Yes, Mr. Tolaey (±AK) has a question.
•"70Z.2-/
MR. 5EL-QEY". Mr. Leonard, one question. You are
aware in your capacity of representing the League of Women
Voters, I imagine as well as anyone of the wide range of
environmental statutes that the federal government is
presently trying to enact , that are now in the books , and
I'm sure you are also aware of much of the opposition at the
local level, municipal government levels and their body
politic opposing certain environmental statues , the implemen-
tation of them.
For example, transportation control plans,
compliance schedules for stationary ^sources, the implemen-
tation of the 404 program, pretreatment standards and I
could go on and on and these statutes are on the books and
right or wrong, there is some opposition or reluctance to
implement them — many of which, if not all of them, are
public health related.
In your view, if one were to assume that there is
a finite amount of resources , either by the federal govern-
ment or the state government or the local governments, where
would the League of Women Voters place in this priority a
mandatory — a deposit legislation versus some of the other
measures that we are trying to implement?
MR. LEONARD: I would like to say several things
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47
about that.
First is that League members throughout the country
are deeply involved in solid waste matters. We find that
bottle legislation both on the local, state and the national
levels are of deep concern to League members, so I think it
would rate very high on our priorities.
On the question of allocating federal, state and
local resources, I think that a national bottle bill would
be different from many of the programs that you described or
that you mentioned earlier.
It would substantially reduce the costs that
localities bear in collecting and disposing of solid waste.
I think that that reduction in the cost to local taxpayers,
to local governments, would make them strong supporters of
such legislation on the national level.
I would suggest that you direct that question also
to the member of the Fairfax County League who will be
speaking with you this afternoon, but I think the basic
point is that a bottle bill is much more of a self-operating
system than other types of environmental programs that often
need a substantial input by federal, state or local govern-
ments to keep them going and I think that would not be the
case with a national bottle bill.
' To ??•_(.:
MR. tfGBK: Thank you.
THE CHAIRPERSON: Are there any other questions?
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49
STATEMENT OF MR. FRED 0. WHARTON, JR. - CONTINENTAL GROUP
MR. WHARTON: Mr. Williams, Mrs. Blum, representa-
tives of the Resource Conservation Committee. 1 am Fred
Wharton, Director of Public Affairs for the Plastic Beverage
Bottle Division of The Continental Group.
Mr. Williams correctly identified me as representin
Continental Group. The list of speakers which was handed out
incorrectly identified me as representing the Society of the
Plastics Industry.
Continental is proud to have served America and
other nations with its packaging products for more than 70
years. It is dedicated to continuously striving to improve
products of packaging conforming with sound environmental
considerations.
We appreciate today's opportunity to present our
views which hopefully will contribute to a decision by the
Committee to not recommend federal beverage container deposit
legislation.
My statement today does not comment on the various
working draft background papers which were made available to
us last week. We will reply in writing to many of the points
contained in these papers.
We oppose federal beverage container deposit
legislation because we believe that there are other and
better measures that can achieve the objectives of this
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50
legislation without being counterproductive.
Continental, in conjunction with others who
manufacture polyester beverage containers or contribute to
their production will submit definitive data to the
Commission reinforcing and expanding on many of the state-
ments which I will make today.
Polyester beverage containers have recently been
introduced in response to perceived opportunities to offer
consumers a better product while participating profitably in
the beverage market.
This business decision was taken at a time — as
long as eight years ago — when threats of penalties or
indirect taxes unrelated to this product did not exist.
Consequently, industry could and did evaluate the
market, quantified the qualities and methods required to
produce a superior consumer product and thereby justified
the expenditure of millions of dollars in product developmen
costs.
The result is the polyester beverage container
which has numerous consumer and ecological benefits. Studie
show the entire beverage industry uses a small fraction of
the total U.S. energy consumption — less than one-half of
one percent.
However, large sized polyester beverage containers
intended primarily for home consumption use, will lower this
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51
minor energy expenditure because they use less energy in
their production and distribution than any other non-
refillable beverage container.
Data currently being assembled by the industry
suggests that polyester containers compare favorably in terms
of energy consumption with refillable containers whose
trippage is in the range of five to seven uses.
We also believe there is a great opportunity to
improve resin production and fabrication of polyester
containers and we are confident that future improvements will
further reduce the energy required in the manufacturing and
distribution processes.
Advocates of beverage container deposit legislation
support their position largely on a reduction in litter.
Polyester beverage containers are most effective and most
economical as large size packages — 32 to 64 ounces.
These packages are primarily used in the home and
consequently are unlikely to be littered. Today, beverage
containers represent less than 6 percent of municipal solid
waste.
The polyester containers should help reduce this
minor impact on the solid waste stream by beverage containers
Polyester bottles are lightweight, approximately 73 grains or
less than one-sixth of a pound in the 64 ounce size compared
with 1.9 pounds for a comparable non-refillable glass
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52
container or 2.9 pounds for a refillable bottle.
Additionally, polyester beverage containers can be
burned and their energy recovered where such resource
recovery systems exist or the need for fossil fuel to burn
garbage in incinerators can be reduced when polyester
containers are included in the waste.
Polyester beverage containers are safe because
they are extremely break resistant. If broken, they tend to
split into two or three large pieces with feathered edges
that are unlikely to cut or damage property.
There are other.benefits resulting from the use of
plastic beverage containers, too, but it is doubtful that
this product would have been developed had beverage container
deposit legislation been in effect.
Part of our opposition to legislation of this
nature is its stifling effect on innovation, risk taking and
free enterprise which could deny the public the choice of
better products than are currently available.
There are more effective alternative methods of
attacking the problems which deposit legislation seeks to
solve.
An approach to reducing litter that has been
effective is the clean community system which Keep America
Beautiful has helped to implement in some 70 American cities
This program has resulted in litter reduction in
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53
participating cities ranging from 10 percent after one month
of operation to up to 77 percent after three years and this
is total litter reduction, not beverage related litter
reduction.
This approach has much to commend it and it can be
activated without legislation and with minimal public
expenditures. The Clean Community System also helps unify
the community by providing a mechanism for attacking a
diversity of local problems.
Another alternative is operational in the State of
Washington which has enacted legislation that provides a tax
of 0.015 percent on the gross proceeds of the sale or the
manufactured value of a broad category of products which
become components of litter.
Revenue from this tax is used in a multiplicity of
ways to reduce the incident of litter and to increase
frequency of litter clean up and a part of this has to do
with changing public attitudes about littering which is
really the basic solution to the litter problem.
We believe that solid waste can best be approached
by programs which result in recovery of usable materials,
including the combustion of the remainder as a source of
energy.
The EPA estimates that 70 to 80 percent of U.S.
municipal solid waste could be recycled for its energy
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54
content. The EPA further estimates that there will be 36
energy recovery plants operating in 30 communities by 1980.
Polyester beverage bottles are a positive factor
in such systems, allowing energy to be used to produce a
container which subsequently can be recovered for the
production of electricity or for heating.
Federal legislation providing financial impetus to
8 I such programs would address the total solid waste problem
9 II with a meaningful solution.
Energy, another concern, is not just a national
11 problem but an international problem. It cannot be solved
12 by piecemeal legislation. Domestic policy has further
" complicated the issue by subsidizing petroleum and natural
14 |l gas prices with the result that the prices of many products
15 | do not include their true energy cost.
16 Thus, otherwise non-competitive products become
17 competitive. Allowing all energy sources to be price*at
18 their true market value would eliminate this inequity. Thos
19 products that are high energy consumers will be priced out o
20 the market unless there are offsetting savings or compensate
21 benefits.
22 In summary, we believe American society is best
23 served by allowing unrestrained competition between material
24 and fabricators supplying the beverage container market. Th
25 Resource Conservation Committee should address itself to the
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55
total problem of solid waste and irreplaceable raw materials
including energy.
t>^
We submit that beverage containers are insight the
total problem nor a substantive part of any of the problems.
The polyester beverage container represents a new beneficial
development that would not have been possible under
restrictive legislation.
Further, technical improvement will make it an
even better container.
We thank you for this opportunity to appear before
this Commission.
THE CHAIRPERSON: Thank you, Mr. Wharton. Are
there any questions?
THE MODERATOR: Please identify yourself.
MR. HERKS: Richard Herks, Department of Commerce.
Mr. Wharton, I believe you commented that you are
preparing comments on one of the documents that was previous;
mailed out to you for this meeting on the costs and benefits
of beverage container legislation?
MR. WHARTON: That is true. The documents were
received last week. There was not ample time to really give
them the consideration they deserve —
MR. HERKS: What I'm interested in is one of the
documents relates to the benefits of a 90 percent return rat1
— which previous speakers have discussed at this return rat
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56
We collect litter, save energy, etc., recover materials and
I'm actually looking for some sensitivity analysis with
respect to that return rate.
In other words, you alluded to the fact that your
plastic containers are energy competitive with refillable —
I believe at say a five to seven trippage and I'm interested
whether you have any data that you might be able to respond
to the document, looking at it from a national viewpoint of
what would happen at say, 80 percent return rate?
MR. WHARTON: An 80 percent return rate would be
somewhat lower than — that's — 10 percent — ten trips. A
90 percent return rate is approximately 12, 13 trips. The
national average, as I understand it today, is approximately
ten trips and this includes the on-site consumption market
where the bottles never leave the premises.
If areas of the country where the current trippage
is less than two and the east is one of these areas where
the refillable bottles actually make less than two trips —
if a mandatory deposit law which required bottles to be
returned were enacted and applied across the board, it is
doubtful that the current trippage rate nationally would go
up because now we have people who of their own voluntary
desire buy a refillable package which they don't return 90
percent of the time.
If it were enforced on people, it is unlikely that
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57
the rate would go up. Consequently, the relatively short
term situation would have to compare a polyester beverage
container with a refillable container making less than ten
trips i.n which case the comparison from the standpoing of
energy is in favor of probably the polyester bottle.
If the bottle is burned with its 10,000 BTU's per
pound that can be recovered, it improves the position of the
polyester bottle. On the basis of weight with the polyester
bottle weighing one-sixth of a pound and a glass bottle
weighing 2.9 pounds, the solid waste would be still
beneficially effected if the returnable bottle made 15 trips,
you would still have a weight saving with the single service
polyester bottle in solid waste.
MR. HERKS: I follow you on that and what I would
appreciate is the data which you alluded to with respect to
return rates, say in the eastern part of the United States
or the metropolitan areas, if that data is available.
MR. WHARTON: We will attempt to provide these data
and the submission which will be made to this Commission.
MR. HERKS: Thank you, very much.
MR. WHARTON: Thank you.
THE CHAIRPERSON: Any other questions? Thank you.
Oh, wait — yes, there is one more question.
OR. CLARK: Just as a matter of interest, what are
the prospects for getting a refillable polyester bottle?
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MR. WHARTON: I would hate to predict the
possibility of a refillable polyester bottle because there
are certain technical problems, the solutions of which are
not immediately apparent.
However, I think with confidence I would predict
that if plastic beverage containers remain a part of the
beverage container market, at some point in time, there will
be a refillable plastic container.
It may not necessarily be polyester but as long as
the market is there, the incentive to develop a product to
fill that market exists. If uncertainties and economic
discontinuities are not placed on this, superimposed upon
the risk taking which business normally has to take in a
major undertaking, then I am confident that industry will
respond to the opportunity to producing a product which the
public wants, needs and can beneficially use and there will
be a refillable plastic bottle but not necessarily polyester.
THE CHAIRPERSON: Thank you.
THE MODERATOR: Thank you, Mr. Wharton. Would the
last gentleman from the Committee please identify himself?
pR. CLARK: Edwin Clark, Council on Environmental
Quality.
THE MODERATOR: Thank you.
Again I must ask the indulgence of the National
Soft Drink Association, probably the Crusade for a Cleaner
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STATEMENT OF CONGRESSMAN JAMES J. JEFFORDS - VERMONT
CONGRESSMAN JEFFORDS: Mr. Chairman, I am pleased
to be here. I have a prepared statement which I would like
to submit but I would rather abbreviate that statement,
summarize it and make myself available to questions if that
is all right.
First, I'd like to speak about two aspects of the
problem. I come from Vermont and I'd like to tell you a
little bit about our experience and secondly, I'd like to
talk about the bill which I have introduced along with many
others in the Congress of the United States and discuss some
of the aspects of that and answer specifically some of the
questions that you have outlined in your letter.
First, it is always interesting to listen to people
who say how horrible this deposit legislation will be and all
these problems that are going to be created and what serious
situations are going to exist and then to come from a state
like Vermont, small as it is, who, if these problems do exist
would have them much more dramatically imprinted upon our own
system than would be on a national bill and yet we have a
great success story to tell.
Initially, our law did come about because of a
litter problem. It started in the 50's. We had a law —
first in the nation — we let it go and then we brought it
back again and it has been a success.
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We've reduced our roadside litter by some 76
percent. Our overall litter on the roadways has gone down
substantially and you notice it the minute you come across
the borders. It's been a big asset to our state.
Secondly, we have calculated that we do save
energy now with the amount of recycling which has come about
and the reusing of the bottles which has come about by virtue
of our law in spite of industry attempts really to scuttle
our law.
We are experiencing consumer savings. Again, in
spite of the representation to the opposite by industry
around this country, a person in our state using refillable
bottles now can save up to $60 a year per capita — per
family, rather, which is a significant saving and it's
certainly not a cost to them, and for those still using non-
returnable bottles and one-way type containers, there is no
significant increase in the cost to them which can be
demonstrated from many of the facts in our state.
It has created jobs. We have created jobs in our
state, some 450 jobs. For a. small state like Vermont, that'
significant but I have to say in fairness that we don't have
some of the dislocation problems which might occur because
our economy does not produce bottles and cans.
Most of all it's the support that the law has
generated in the people. The return rate is an indication
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of support. Well over 90 percent of our containers come
back so they can be recycled and reused.
I've done two polls and — again indicates the
increasing amount of public support for the law in our state.
The first one we got back indicating whether to support the
law — should have a national law, something like 78 percent
in favor.
This last poll we did this year shows a 93 percent
favorability. I ask you, what other thing can you do which
in a way affects people that is going to get you that kind
of support and the politicians ought to realize that.
You want to do something popular for a change, you
ought to try something that the people agree to like the FEA
study shows. The people of this country want it and if you
want to do something that the public supports, this is
something you ought to do.
We are preparing, and will submit to the Committee
a very extensive report on Vermont experience. It will be
ready by the 2nd of November. It will be the first up-to-
date study on the Vermont story and we'll have it available
to you and you'll be the first to have the benefits of it.
Now I'd like to go on to discuss why we feel it
ought to be a national experience rather than just a limited
experience in the two to four states that have it plus the
counties that are passing it now.
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1 First — I'm not going to go through all the
2 benefits. You know them, you've read the studies, you've
3 seen the studies at FEA and EPA and even Commerce's study —
4 with all of its biases — pretty much the positive stuff
5 comes through so I'm not going to go through that but I'm
6 going to try to be constructive and point out and answer
7 some of the questions and give you some ideas and perhaps
8 some of the ways my own bill ought to be changed and answer
9 some of your questions.
10 First, I think our present bill needs to be
11 changed. I don't think you should go out and supercede
12 state laws that are accomplishing the goals, what can be
13 accomplished.
14 So I would say that the guidelines ought to be
15 broad but specific in certain circumstances but not super-
16 ceding state laws that are accomplishing the same purposes.
17 In other words, I can see that like in our state
18 where the law is working well, I'd hate to see someone come
19 in and change it in some significant aspects, especially
2o with our refund system which we give to our retail grocers
2i which has made them happy with the law and they now support
22 ifc'
23 This kind of small deviation from just an ordinary
2,. deposit concept, I think might be counterproductive —
25 unnecessary in the states that already have the laws and
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yet the law should be broad enough and the guidelines should
be specific enough so that we can get some uniformity in the
laws throughout the country to insure that the industry
itself is not overly encumbered with difficulties in
producing containers to be distributed throughout the United
States.
Now I'd like to talk — just to give you an idea
and I might say that I have traveled from California to
Massachusetts, speaking to state legislatures who are
interested in this law and as you know, around the country
there is a momentum towards passing these laws in the variou;
states — very close in many states and I anticipate this
next year and the year after, many more states will follow
so I'm well aware of the arguments which you will be faced
as to why this is going to create such terrible things for
the country and give you a few of the answers.
First the litter tax. Now, I don't think that
that is going to have any viable effect on the Congress of
the United States — passing a new tax, we have enough new
taxes floating around right now without adding another one
on litter.
And I don't think that the litter problem is the
one that the United States Government should be focusing on
but rather the energy and the resource aspects but I'm not
going to — although that has been supposedly successful in
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the State of Washington, it doesn't do what should be done
and in effect, not as easily as the deposit law.
In other words, it doesn't get people to bring
things back. It pays people to go out and pick things up
and to me, it's much better for all the laws that we have,
obviously to bring the things back so that we save and make
the savings which of course, you're well aware of.
So I'm not going to spend much time on that.
That's an argument for the states primarily and not the
Congress.
The other argument which you hear and you've heard
it just before is the don't do this, it's only a small part
of the problem. Do the whole thing at once. Well, for all
the arguments that you have, other arguments you have, I
can't disagree with the fact that some day this country
ought to have a better and practically a total resource
recovery program and I suppose at some time in the future
that's going to occur.
But right now, that is going way too far too fast.
The implications on dislocations of jobs and the problems
which it would create with the steel industry and other
industries by moving all at once to a total resource recovery
— recycling all of our automobiles and all of our containers
laudible as it might be, I think it would be obviously — to
do it all at once would be too dramatic.
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Well, why not take a first step, a step that
people want to do anyway, that they agree that they want to
do? Why not do something which is totally compatible with
the total system anyway?
So if you have a beverage container law which gets
the beverage containers back, that's one part of it, yes.
But if you go ahead and do the whole thing later on, you
don't have to replace it, because everything you've done in
the beverage container legislation is just going to make it
easier to go a step further.
Also I think by just making that argument, they
admit it's a good idea. So I can't see how that argument,
as laudable as it is and it was tried in our state, everyone
of these arguments has been tried in our state.
We even had a litter tax for awhile. It didn't
work so we passed the beverage container legislation. We
had a petition drive and people were asked, would you prefer
a total recovery program to the beverage container and the
grocers ran it and they got 45,000 signatures. Which is not
surprising.
Sure, we're all interested in doing a better job
all the way around, but let's make the first step, the easy
step, the step that we know will be successful. We know we
will accomplish part of the goals and then if that works,
the way we think it will, then we can consider moving on to
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more in a total recovery aspect.
Another problem — and it's the most difficult
one politically — and you know it and I know it and that's
the job dislocation problem. Of course, overall, as you're
all aware, all the projections indicate a substantial
increase in jobs.
Right now, labor is divided on this issue. I know
in California, there was testimony from both sides. The
Teamsters and the Retail Clerks are in favor of it because
it creates jobs.
Yet there is emotional problems connected with the
loss of jobs but the loss of jobs as significant as they are
compared to the great benefits of the law are not such that
it ought to make it a decision — negative on the bill.
But we can do things to assist in the dislocation
area and because — although there is debate on just how
much there is, there is going to be increased revenue to the
United States by virtue of the additional jobs created.
We should use some of that, perhaps, in insuring
that those jobs that are lost, that there are training
programs or whatever it may be to see that they are not
permanently out of jobs or out of work and to help them to
find new jobs.
There is a great deal of controversy on this issue
but I think there are so many benefits here that yes, perhap;
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we should modify our law, you should maybe recommend that
there should be something done to assist those people that
may lose jobs, if any.
Of course, there is even debate of whether there
really will be any, as to whether or not the increase in
some of those areas — in other aspects of the industry will
not take care of those jobs.
I just want to complete by saying that my own
observations from around the country and from the fact that
we act as a central point for people who are interested in
these type of laws around the country that the trends are
toward more states and counties passing the law. You've seer
that in your own papers.
Thus I think it is critical at this time for the
industry and others that serious consideration be given to
national guidelines in this area to assist the industry.
Some of the industry is already coming to that position.
The aluminum industry -- members of that industry
are now saying hey, we've gone from against it to a neutral
and really, they're for it. We're seeing the brewers, some
of the brewers who were previously against it are now for it
— Falstaff, Coors and others are coming and saying it's a
good idea, if the national benefits and in fact the industry
benefits themselves as such that we've got to do this.
The trend is there and I only hope that you will
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recognize it and recommend supporting a law which will
provide the benefits to all the country that we in Vermont
have enjoyed. Thank you very much.
THE CHAIRPERSON: Thank you. Congressman Jeffords.
Questions? Yes, Jim Tosey (ph.) of OMB has a
question.
TotZX
MR. TOCEV: Congressman, what do you see as the
role of the federal government enforcing mandatory deposit
legislation? I read your bill and as I read your bill, it
has a citation for the particular section, U.S. code and
penalties, but I wasn't clear. I would like to get it
firsthand because I've been asked.
What do you see as the role of the federal govern-
ment in enforcing the requirements of your bill?
CONGRESSMAN JEFFORDS: Well, I think that there
are alternatives and I'll speak about the alternatives and
also the bill.
I think that if the guidelines are established
and then it could be left to the states to say that if you
pass a law or to do things within certain criteria and area,
then that's your baby and you can do it the way you want to
and the federal government would only come in in those
instances where states failed to pass it and then of course,
they would have to administer the law accordingly.
There is another option which we have thought
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somewhat about -- as far as the federal effects -- of course
that is the imposition of a tax on beverage containers of a
5 or IOC -- some type of tax which would — but then allowing
to come from under the tax — all those that have deposit
systems so that there wouldn't be as great a federal effort
except through the utilization of the tax effort.
But primarily, the imposition of the system would
be requiring that the manufacturers and the distributors and
the retailers that comply with the deposit system.
TOlW-
MR. TOSBY: Thank you.
THE CHAIRPERSON: Any other questions?
BR. CLARK: You mentioned a scheme for refunding
deposits to the local grocery?
CONGRESSMAN JEFFORDS: Right. In Vermont, we have
a system and that's why there's some concern. I think other
states are going to adopt it.
In order to compensate the grocer for his action,
we allow, out of the 5* deposit, he gets one penny back.
Now the 10 percent that are not recovered pays for part of
that and the additional penny is passed on in some way eithe
the consumer — or absorbed as a cost by the distributor or
the retailer.
There has been no — as I indicated, there has
been no indication of any significant at all increase in the
price to the-consumer so we believe it is coming out in
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absorbed cost or in the case of refillables, there is such
additional profit that it has come out that additional
profit.
Certainly almost all of our soft drink industry
now has gone to refillables with the exception of the use
of cans so — and their profit has increased substantially.
From a gross profit from somewhere around 18 percent with
non-returnables — somewhere around 50 percent with
refillables so they have been able to absorb — that
additional part within that pricing structure.
&R. CLARK: Thank you.
THE CHAIRPERSON: Congressman Jeffords, we heard
from the industry that there has been a good deal of
complaint in states that have bottle bills now, about the
inconvenience to families of returning these.
You say that this is a very politically popular
bill. Am I assuming from that that you don't feel that there
is a problem with inconvenience — are you having complaints
about inconvenience?
CONGRESSMAN JEFFORDS: Not at all. There were
initially and some concern over this issue expressed by
consumers but primarily by grocers of having to take them
back. But that has all disappeared.
Just as a matter of note, for those people who
don't like to turn them back, there are many people who are
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willing to pick them up and bring them back. In fact, it's
been a great source of revenue to the Boy Scouts and the
hockey teams and all these things and people use this as a
ready and willing way to contribute to these functions.
Obviously, usually for every can you have to bring
back, it's lighter than the one you bring home and I've
always been kind of confused about the argument, how
terribly inconvenient it is because if you're going to pick
them up and bring them home, it's not that much more
inconvenient to bring them back.
We've also had to bring up to meet this situation,
centers which have grown up just to pick the bottles -- just
have people bring them back. They can bring all their
bottles back to one place and they'd sell beverages there
and that's where a lot of our job increases have come.
So there hasn't been really — I think also that
the good feeling you have about knowing you're doing
something which is getting rid of the trash and helping —
sort of overcomes any inconvenience in the minds of the
people.
THE CHAIRPERSON: And you're saying now that the
retailers are no longer complaining?
CONGRESSMAN JEFFORDS: Not at all. In fact, there
are some and I run into them — I run into them once in
awhile but the fellow who is the head of the grocers now say
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that they've just swung right around and that the large
majority of them support the law now — partially because
of the revenue feature of it, I'd have to admit.
That's why our law doesn't have that. States that
want to utilize that sort of thing, I think should be
allowed to do so.
THE CHAIRPERSON: Yes, there are some more
questions. Department of Interior, Jim Holt.
MR. HOLT: Congreesman, could you comment on what
kind of public education program you had in Vermont at the
beginning or even beyond that, how best the public on a
national level could be informed of the positive benefits
you're talking about?
CONGRESSMAN JEFFORDS: I'm sorry, you're referring
to the aspects of the law or are you talking about the littei
problem?
MR. HOLT: Any comment you want — any component
you want to address but it seems to me that the public
education aspects of this thing are going to be very
important. We ought to know something about them before
we implement some kind of national law. -- What kind of
experience you had with that —
CONGRESSMAN JEFFORDS: That's difficult for me to
answer from the Vermont experience because ojie, we had a law
for four years in the 50's so there was a great deal of
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public education that went on at that time.
Subsequent to that, we had — our governor who is
very environmentally-minded, organized — Green Up Day —
and there was a great deal of work in Vermont on people going
out on one day in the spring and picking up all the cans and
bottles which was an excellent public education on how
terrible the problem was.
So that aspect would be a little hard to organize
on a national basis, obviously, and so who knows, you might
want to do it, but that kind of public education went on —
an awareness of the problem.
But I would suggest that certainly along with the
implementation of the law, yes, you should have a public
education program but if the polls are correct, especially
the FEA poll — I think there's been enough — in almost
every state in the country, this has been an issue and with
a broad public support that the polls indicate for this kind
of legislation, I don't think that it would be as a difficult
public education problem as you might find in other aspects
Plus -- except for those of you who are much
younger than I — we used to do this not too many years ago
ourselves anyway and I would say most of the adult populatioi
over 35 anyway, probably remembers the days when they had —
they brought them back anyway.
THE CHAIRPERSON: Congressman, Richard Herks from
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the Commerce Department has a question.
MR. HERKS: Congressman, first of all, I commend
the State of Vermont for the high return rate. What I'm
interested in — I believe you referred to refund center or
return centers?
CONGRESSMAN JEFFORDS: Redemption centers — they
are called beverage centers, discount centers, all different
names —
MR. HERKS: Could you expand — are these state
operated or private operated?
CONGRESSMAN JEFFORDS: They are private operated.
There is at least one which is a nonprofit institution which
they use the money for charitable purposes which has been
very successful in the town of Bennington but they have
sprung up entirely from the private sector meeting a situatio i
which existed and people using the free enterprise system to
take advantage of that situation.
MR. HERKS: Thank you.
THE CHAIRPERSON: Thank you very much. Congressman,
we appreciate your coming.
CONGRESSMAN JEFFORDS: Pleasure being here.
THE MODERATOR: We are now going to hear from the
National Soft Drink Association, Mr. Sidney Mudd, Mr. Williair
Landes and Mr. Richard Posner.
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STATEMENT OF SIDNEY MUDD
NATIONAL SOFT DRINK ASSOCIATION
MR. MUDD: My name is Sidney P. Mudd. I am a
soft drink manufacturer in Hew Rochelle, New York. I appear
today on behalf of the National Soft Drink Association.
The industry's size is conveyed by 2300
manufacturing plants, 140,000 employees and annual sales in
excess of $11 billion wholesale value.
The issue before us, government intervention to
influence private sector production and buying decisions is
both serious and complicated. It involves capital disloca-
tions estimated to approach $5 billion; the displacement,
if not loss, of some 80,000 skilled jobs; a limitation on
industry's capacity to take its product to market in the
fashion most likely to meet consumer needs and wants; and
the freedom of the consumer to make individual choices in
the struggle to achieve the standard of living he or she
elects without guidance from government.
These issues cannot be addressed substantively in
the time we have been allotted. We sincerely hope that our
written statement will be given careful consideration by the
members of the Committee.
We view litter and solid waste as variations of
the same problem. From a national policy standpoing,
addressed in piecemeal fashion. Public conern should
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address the mass of solid waste and its disposition by
whatever weans is most effective and correspondingly least
costly and disruptive.
The avowed purpose of every container legislation
is to increase usage of refillable bottles and decrease
usage of non-refillable bottles and cans. Estimates of
fewer packages in the waste stream are based upon questionab]
assumptions of lower costs to consumers and historic
consumer behavior under an all-returnable system.
Our conviction is that neither assumption is
currently valid. The underlying fallacy in such theories is
the failure to recognize the strength of implicit values
which exist among consumers.
It is not longer possible to predict consumer
behavior solely on discretionary purchasing power or
comparative price differentials because of a full price
standard which permeates the marketplace, and I would
underline the word "full".
Dr. Landes and Prof. Posner who follow me will
develop this concept in their testimony so that we will not
have a duplication.
The operation of this market force is undeniably
demonstrated by the rise of non-returnable market share from
near zero in the mid 50's to some 56 percent today with a
distinct store-cost advantage to refillables during that
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entire period.
This market response is unmistakably clear.
Consumers placing a relatively low cost on the return
process will elect returnables while those placing a
relatively high cost on that process will choose non-
return ables.
This is precisely how the market is presently
segmented and serviced today by a bottler or a brewer.
Mandatory deposits do indeed deter the beverage manufacturer
from continuing to serve a segmented market effectively.
Mandatory deposits would combine the now efficient
one-trip container with the capital and labor intensive
returnable distribution system. These cost pressures must
then flow to consumers.
However, the interest of manufacturers — and I'm
a bottler — is to lower prices thereby increasing sales —
not to raise prices. Therefore, if forced to use the costly
returnable system, the manufacturer is pressured to combine
it with the refillable bottle in the hope that his store
price will not escalate.
In our view, this is the only valid assumption
associated with mandatory deposits. If these pressures fail
to materialize and we don't think they'll fail — but if
they do, and cans remain in the marketplace above token
levels, there is no adequate national recycling capability
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to accommodate them.
It would require a national commitment to bring
one into being, a proposal which we shall address positively
in a few moments.
While current resource costs temporarily permit
aluminum to enjoy the economics of recycling, aluminum
cannot meet the total beverage can need or demand. For
returned steel cans, only two avenues are available.
First, the bottler or the distributor, after
refunding the deposit, may dump them into the municipal
waste stream, passing along the added handling cost to
consumers or two, the steel industry may make a market for
used cans and accept them from the bottler or the distributoi
The cost of subsidizing such a market will be
added to the price of new cans — or other steel products —
and again passed to the consumer. Theorized, social gains
imagined to flow from mandatory deposits ultimately depend
on refillable containers returned a sufficient number of
times.
Faith in this concept is rooted in the belief that
enough customers will prefer returning the container to
forfeiting the deposit. The increasing willingness of
returnable buyers to discard deposit containers -- as well
as deposits — is evidenced by the fact that trippage —
which is the number of times containers are returned for
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deposit — has declined from a national average of about
20 in the mid-50's to an average of 10 or 12 trips today
and many areas of the country have fallen below the four
trip level.
I'd like to just digress for one moment because
we happen to be the bottler here in Washington. I have
asked that a record be kept for my own instruction of the
trippage of our returnable packages in Washington and
environs.
It runs back from 1977 — current month of
September — I do not have October yet, of course — back to
1971 and for our 16-ounce returnable 7-Up package with a 10*
deposit, we are getting this year 2.8 trips.
For our returnable Dr. Pepper package which is
sold in lower volume in Washington than 7-Up, we are current]
getting 3.1 trips.
While not attempting to instruct anybody in
arithmetic because I certainly don't know enough about it to
do it, let me give you a simple formula.
I think there was some confusion when we talked
about trippage. There is a very simple way for all of us to
think about it and immediately get the trippage from the
percentage rate.
If 10 percent of the bottles fail to return, you
simply divide 10 into 100 and you get 10 trips, it's that
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simple. If 50 percent of the bottles fail to return, you
divide the 50 into 100 and you get two trips.
So no matter what we're talking about in the rate
of percentage of return, you simply take that non-return
fraction and divide it into 100 and it will give you the
number of trips.
We find no evidence that mandated deposits will
alter basic value judgments of the public. Consequently,
public policies designed to reduce the use of non-returnables
will impose new costs, presumably of substantial magnitude
on the consuming public.
Let me go to a footnote. You heard some conversa-
tion earlier — or engaged in conversation earlier about the
handling charge. Almost inevitably, a mandatory deposit
bill will produce a handling charge. It has done so in most
all instances or is about to and it is imposed either
indirectly by the dealer himself — meaning the storekeeper
himself or imposed by law and it has gone as high as 2
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and brewer bill cost.
A total returnable market must sustain at least
the trippage provided by those who now support the returnable
system. If prices of beverages are to remain stable and if
environmental gains are to be achieved.
Now that notion assumes that today's users of non-
returnables will embrace the return process to the same
degree as do returnable users, a choice which they now
increasingly reject and yet some people are assuming that
they're going to do it.
If the industry were 100 percent returnable today
and experienced an increase in container loss rate of only
4-1/2 percent, it would drop trippage from 12 down to 8,
just like that.
With an increase in the loss rate of only 17
percent, trippage declines to four trips. I think the impact
on consumer prices and on theorized environmental gains is
self-evident.
If in spite of obvious perils, some form of
government intervention is politically inevitable, we would
urge a broadly based national program designed to accelerate
the development of resource recovery.
Such a program funded by a recovery charge, small
enough to avoid artificial constraints on economic decisions
by producers or consumers, could adequately subsidize the
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initial placement of a nationwide resource recovery facility
and litter control program.
Designed to expire after a limited number of years,
the program would not long intrude upon free market alloca-
tion of resources. The outline of such a program is
attached to our complete statement and we urge its consider-
ation as both a practical and less intrusive public policy
alternative.
Because we are convinced that the alternative
represented by such a concept is less disruptive, less
punitive, more constructive and more promising of progress
in dealing with solid waste and litter, we look forward to
introducing it to both the administrative and legislative
branches of the government in the immediate future.
We are confident that with it, we will be able to
bring substantial support from both industry and labor and
hopefully, from such a posture, industry, labor and govern-
ment can work together to meaningfully address this real
concern of society.
(Report follows.)
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THE CHAIRPERSON: Thank you, Mr. Mudd. I would
like to ask that Dr. Posner give the summary of the Landes/
Posner statement and then if you do not mind, I will ask
questions of all of you.
DR. POSNER: Can't Mr. tandes summarize his half
of my statement?
THE CHAIRPERSON: Well, certainly, however you
have it worked out.
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STATEMENT OF WILLIAM LANDES
NATIONAL SOFT DRINK ASSOCIATION
MR. LANDES: My name is William Landes. I am
Professor of Economics at the University of Chicago Law
School and I shall attempt in the'.eight minutes allotted to
me to summarize the first part of a longer statement that
Prof. Posner and I have prepared for submission to this
Committee.
Our prepared statement is an economic analysis of
proposals to restrict non-returnable bottles and cans. In
preparing our statement, we reviewed the extensive literature
concerning the merits of public intervention in the container
market, and to our surprise, we found that the issue had
apparently never been analyzed by the theoretical and
empirical methods of modern economics.
Our statement represents a first step, though a
preliminary step, toward a responsible economic analysis of
the problem. Though our analysis is not definitive, it does
raise serious doubts concerning the wisdom of proposed
container restrictions.
We first attempted to explain from an economic
standpoint the significant growth over time as well as a
substantial variation across states today in the share of
cans and non-returnable bottles in the soft drink market.
Both the growth in non-returnables and the variation
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across state is a result not of producer whim as it is
sometimes alleged but fundamental economic factors. Foremost
among these is the growing value of time to consumers which
has made the full price of returnables — that is, inclusive
of non-pecuniary but real costs such as the time and
inconvenience associated with transporting empty containers
from the home to the retailer significantly greater than that
of non-returnables for an increasing number of consumers.
Because consumers attach different costs to the
return of a bottle, the full price of a returnable will vary
among consumers. In general, we expect that consumers placinjg
a relatively low value on the return process will opt for
returnables while those placing relatively high value on
this process will choose non-returnables.
This analysis implies that public intervention
designed to restrict the use of non-returnable bottles and
cans would impose substantial costs on the consuming public.
Consumers forced to shift either of one — excuse me,
consumers forced to shift toward returnables will incur
higher costs because either one, the direct price of a
returnable plus the time cost of return will exceed the cost
of a non-returnable today or two, the direct price of a
returnable plus the deposit foregone among consumers who
choose not to return the returnable, will exceed the cost
of a non-returnable.
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Now when these costs are summed across millions
of consumers, they may well be very substantial and to our
knowledge, there has been no attempt to estimate these costs
using the statistical tools of economics.
Now the concept of full price which I defined
above has important positive implications on market behavior,
It suggests, for example, that in areas where consumers time
costs are high as approximated by the areas average wage
rate, non-returnables will have a larger share of the soft
drink market.
Similarly, the growth in real wages in the U.S.
economy implies an increasing value of time which in turn
would generate a growing demand for non-returnables relative
to returnables and to take another, less obvious example,
consider the impact of the growing labor force participation
of women in the United States, particularly of married
women in the last 25 years.
The proportion of married women in the labor force
today is about 45 percent compared to 22 percent in 1948.
Since participation in market activities reduces the
availability and hence increases the value of non-market
time, the working woman attempts to economize on time by
substituting toward less time intensive consumption items.
This may explain in part the declining birth rate
in the U.S., since raising children is a very time-intensive
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activity, the growing demand for fast-food restaurants and
TV dinners, as well as for a variety of household items that
economize on time such as dishwashers, freezers, garbage
compactors, etc., as well as the increasing share of non-
returnables in the soft drink market.
Thus far, I have been discussing factors relating
to the demand for non-returnables relative to returnables.
Changing supply conditions over time have also tended to
raise the relative costs of returnables to non-returnables.
For example, the growing — the technology of
returnables is relatively labor-intensive compared to non-
returnables arising in part from the labor involved in
handling and transportation from retail outlets to the
bottler and as a consequence, with increasing wage rates
over time, this will increase the cost of returnables
relative to non-returnables leading consumers to substitute
non-returnables for returnables.
To summarize, elementary economics provides a
compelling explanation for the non-returnable phenomena. In
our longer statements, however, we went further by attempting
to test this theory by using multiple regression analysis to
explain differences across states in the percentage of non-
returnables.
There we found that non-returnables were positively
related to average earnings in a state to the proportion of
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women in the labor force and to average years of schooling
and as expected, negatively related to the price of non-
returnables relative to returnables.
This analysis, though preliminary, also refutes
an alternative hypothesis that consumers have been somehow
brainwashed by advertising into preferring non-returnables.
The brainwashing hypothesis, as we formulate it, would imply
that schooling should be negatively related to the share of
non-returnables, whereas we find that average years of
schooling is positively related.
Now for the second part of the statement, I'd like
to turn it over to Prof. Posner.
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STATEMENT OF RICHARD POSNER
NATIONAL SOFT DRINK ASSOCIATION
MR. POSNER: Mr. Landes has been talking about the
cost side of container restriction, the social cost,
particular cost to consumers to reduce convenience. In our
longer statement, we also examine possible benefits of these
restrictions in terms of the various reasons advanced for
such restrictions.
The two in particular we discussed are energy and
other resource savings from deposit legislation or similar
types of restrictions and the question of the externalization
of solid waste and litter cost.
I was surprised to hear Congressman Jeffords stress
the first reason as in his view, the only substantial reason
for federal intervention, namely the container restrictions
would reduce energy and other resource consumption.
From an economic standpoint at least, that is a
flimsy argument. Even if one thought that the free market
were not adequate to ration the use of energy so as to
conserve it appropriately, I have never seen the question
addressed of what would happen to total energy consumption
as a result of restricting the output of one particular
product — a bottle or a can.
Obviously, the resources used to manufacture these
bottles would be deployed to other uses in the economy and
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consumers having at least a nominal saving in shelf price
would use their money to buy some other goods and whether
after the economic system adjusted fully to the shift to
returnables, there would be a net energy saving is a questior
that has never been responsibly addressed.
The better economic argument for container
restriction is the extra — argument, although we are not
persuaded that that argument actually justifies container
restrictions.
It's certainly not enough to simply note that it
is costly to collect and dispose of garbage and that garbage
includes discarded cans and bottles.
The critical question is the extent to which these
costs are already internalized. One factor which doesn't
get the consideration it deserves is that in many parts of
the country, garbage collection is handled by private,
profit maximizing firms, the private scavengers and they beai
the full cost of collecting and disposing of the garbage the
collect from their customers and presumably pass those costs
back to the extent feasible to their customers, and there's
no reason why there should be an externality (ph.) in a
service of that sort.
Secondly, many of the costs of garbage are non-
pecuniary but real and substantial cost which are internal
to the household, borne fully by it and involve no
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externality.
I refer to stench and storage costs, carrying the
garbage to the point of collection and other substantial
aspects of the solid waste problem. As I say, there is no
externality there.
Whether the remaining externality, genuine
externality is sufficient to justify costly public inter-
vention is a question that has never been responsibly
addressed.
Now because of our analysis of the benefits and
costs of container restrictions, we come out with the advice
to you that federal intervention is simply premature. Not
enough is known about the problem.
One of the witnesses this morning said the problem
has been studied to death. The problem has been polemicized
to death but there has been no rigorous empirical study of
the costs and benefits of alternative policies.
The staff statements which was distributed by this
Committee is not the kind of responsible rigorous study of
serious proposed policy that would pass muster if, for
example, the question was whether the Department of the
Interior should build a new hydroelectric dam.
For such a proposal, there would be a study of
costs and benefits that used professional quality, economic
technique and that has never been done in this area. If
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the momentum for intervention is irresistible, we suggest
in our prepared statement as a serious though politically
infeasible — we're not politically oriented people, that
garbage collection simply be turned — simply be privatized
— simply be turned over to the private sector.
We see no basis in public policy for having public
garbage collection. We know from evidence from Los Angeles
and elsewhere that private garbage collection is cheaper and
we think that privatizing garbage collection would ensure
internalization of all but the litter costs of can and
bottle production.
I think it was Mr. Leonard who said that J.H hie
three-fourths of the cans and bottles turn up as garbage
rather than as litter and that three-fourths can be dealt
with by a more rational system of the pricing of garbage
collection service.
Very far down the list of — to us — of acceptable
policy options is the mandatory deposit. This is a form of
taxation designed to bring about a drastic change in
consumer behavior without adequate basis for believing that
the benefits will exceed the costs.
We especially emphasize the inappropriateness of a
national mandatory deposit law. I was surprised in answer
to a question by Ms. Blum, Senator Hatfield said that the
Oregon experience justified a national bill.
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On the contrary, if the experience is as splendid
in Oregon and in Vermont as the Senators from these states
say, there is surely no need to impose a federal solution.
Let the word spread to other states and if they have the
same tastes as the people in Vermont and Oregon, they will
presumably pass their own bill.
But a uniform law is worse than unnecessary
because it is almost certainly an inappropriate policy
instrument, given the gact that any external costs to solid
waste are not uniform throughout the country.
It's clearly much higher in New York City than in
rural Nevada and therefore a single uniform national tax is
going to produce too little social control in some areas and
too much in others and because the costs of collecting and
disposing of solid waste, including the litter costs, are
borne generally by the residents of a single state, it's a
problem that ought to be left for local action.
Mr. Mudd's figures on trippage rates in the Distric
of Columbia suggests that to generalize from Vermont and
Oregon experience on consumer reaction to these laws to other
states could be a terrible mistake and a national law could
have quite unpredictable and unfavorable cost results.
Well, having examined these popular methods of
social control, we then looked at the industry measure which
Mr. Mudd summarized. Ue do not consider it anything like an
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ideal solution from the standpoint of economics.
2 We think it has attracted second best qualities
3 given the void of responsible knowledge that we've stressed.
At least such a tax would avoid, would postpone drastic
5 changes in consumer behavior and business behavior that
6 can't be justified on the basis of present knowledge and it
7 would yield some revenues to address the widely perceived,
8 although in our judgment, unproven problem of resource
9 scarcity and it therefore seems to us to be a reasonable
10 interim measure pending what we regard as urgently necessary
11 serious economic analysis of the question.
12 We will be happy to answer questions.
13 (Report follows.)
14
15
16
17
18
19
20
21
22
23
24
25
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THE CHAIRPERSON: Questions from the Committee?
Hugh Pitcher, Department of Labor.
MR. PITCHER: I wanted to look just a moment at
Table 4 in your longer statement which is your regression
results.
One, I get questions about your inference about
brainwashing. You have a cross-section analysis —
presumably we're talking about largely the national adver-
tising market so there is no reason to believe that the
advertising pressure varies that much.
MR. LANDES: Well, our justification for --
brainwashing is really a formless hypothesis and one has to
give it some sort of operational definition by defining what
one means as brainwashing and we argue, although again as I
say, it's somewhat of a formless hypothesis that greater
years of schooling, more educated people would be less
susceptible to brainwashing.
If that is the case, then you would expect to find
that as years of schooling would arise in an area, that the
brainwashing impact would be somewhat smaller and the net
effect would be a reduction in the share' of non-returnables.
MR. POSNER: I think you could make an equally
logical argument about the value of time being directly
correlated with years of schooling.
MR. LANDES: Whether we do make that and we do say
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that that's also an additional component of the value of
time.
MR. PITCHER: A technical point — you're using
-- squares — techniques rather than — or something like
that which would be sure — appropriate for the —
MR. LANDES: Not necessarily. I'm quite familiar
with that material in sort of the range of our observations.
I don't know if you want to get into more technical details
but in the range of our observations, a probative or logic
is really a linear approximation —
MR. PITCHER: You're saying that most of your
values are near the midpoint?
MR. LANDES: Yes. Most of the shares are in the
order of between 20 and 60 percent.
MR. PITCHER: Okay, no problem.
THE CHAIRPERSON: Yes, Jim Holt, Department of the
Interior has a question.
MR. HOLT: I just quickly scanned the information,
we haven't had much time to look at it yet but I have a
question.
I'm sure there are probably more than one non-
economist in the group and I happen to be one so please, try
to answer it in English if you can.
MR. LANDES: I thought I was speaking in English.
VOICE: No, you're speaking as a lawyer —
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(Laughter.)
MR. HOLT: Anyway, you've made a very strong
argument that there has not been enough rigorous analysis
for the benefits and costs of -- container legislation and
you have presented a plan which would basically put the cost
— capital expenditures required to fund resource recovery
projects on the consumer.
Do you have any kind of rigorous analysis of these
costs and benefits and if so, could we be provided that to
look at?
MR. LANDES: No, we only have the statement you
have there. What we'd like to do and what v/e are planning
to do in the next several months is a longer study which will
attempt to actually estimate the cost to consumers of
mandatory deposit legislation.
I really think it's practical that one can do
something using relatively crude techniques, make inferences
based on studies on the value of time to estimate what these
costs will be but we haven't done them as yet.
MR. HOLT: My question was not so much to the
benefits and costs of container legislation but the benefits
and costs associated with placing the burden of funding
resource recovery projects on the consumer. Are you planning
any kind of analysis on that?
MR. LANDES: No, we're not.
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STATEMENT OF BETSY HOUSTON
CRUSADE FOP A CLEANER ENVIRONMENT
VOICE: Good morning. ily name is i;ary Jo Sarraaon.
I'm speaking as proxy for Betsy Houston, Executive Director
of the Crusade for Cleaner Environment.
Miss Chairperson, members of the Resource
Conservation Committee, we appreciate your invitation to
express our views on federal beverage container legislation.
The Crusade for Cleaner Environment is a unique
organization of bottlers, suppliers to the soft drink
industry, ecology groups and concerned citizens fron, all
walks of life.
Because many of our members are bottlers and
suppliers, CCE has become of the leading non-governmental
sources of information on the economic and environmental
advantages of refillable bottles versus throwaways.
I wish to emphasize that these bottlers and
suppliers form a significant part of the industry which so
often is pictured as a monolithic giant united in its
position against so-called environmentalists.
As a result of our studies over the past seven
years, it is our judgment that a returnable deposit system
is the best and most economical way to overcome the solid
waste, energy and resource depletion problems associated
with throwaway beverage-containers.
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Ideally, consumers and industry would cooperate
in a voluntary return to such a system of distribution which
has served the soft drink industry well for over 75 years.
4 Since this apparently is impractical, however, the best
5 solution is the federal mandatory deposit.
6 Federal legislation will promote the nationwide
7 conservation goals of the returnable deposit system. It will
be easier for industry to comply with our national law
rather than a patchwork of state laws.
In 1978, there will be four mandatory deposit laws
11 in effect in widely scattered parts of the country — Oregon,
12 Vermont, Michigan and Maine. Given the fact that virtually
13 every other state legislature as well as dozens of municipa-
14 ities are considering such legislation, chances are that a
15 patchwork returnable deposit system will be imposed on the
soft drink and beer industries within the next several years.
The deposit should be imposed at the distributor
18 level. One of the keys to success of the returnable deposit
19 system is making it easy for people to bring their containers
20 back and obtain their refund.
21 If the deposit originated at the retailer level,
22 there may be an incentive for the retailer to discourage
23 returns since he would profit from the unredeemed deposits.
24 If the retailer has to pay a deposit himself for the
25 container, However, ne will have an incentive to return it
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to the distributor.
In the soft drink industry, this closes the loop
since the distributor is also the bottler. He can reuse the
refillable bottles and sell cans back to his supplier for
recycling.
In recommending a federal law, we do not envision
a universal deposit level. The federal government should set
a minimum deposit — 5C appears to be the most practical at
this time — then let local market forces set the actual
rates.
In most areas of the country, 5* probably is
enough to ensure an adequate rate of return. In urban areas
like New York or the inner city of Washington, 10* may be
necessary to provide the incentive for consumers to return
containers.
Because it will be in their best interests to get
containers back, bottlers will set the deposit level high
enough to get adequate return rates. There are advantages
and disadvantages to a two-tiered deposit with standardized
containers.
The pros and cons are spelled out in your staff's
draft background papers so I will not repeat them here. At
this point, we believe that the fewer new features introduced
into the traditional returnable deposit system, the better.
Also, market forces in some areas of the country
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1 may encourage a lower deposit for standardized containers
2 without the two-tiered system being locked into law. In
3 order to effect a simple return to the returnable deposit
4 system as it has become familiar to generations of Americans,
5 we recommend including only beer and soft drink containers
6 at this time.
7 The •economic, environmental, energy and social
8 impacts of a return to returnables have been studied and
9 restudied. Analyses of the Oregon and Vermont experiences
10 and projections onto a national scale indicate that the
11 beverage container portion of both litter and solid waste
12 could be reduced by about 80 percent, saving taxpayers
13 millions of dollars in clean up and disposal costs.
14 Consumers would be able to purchase beer and soft
15 drinks at lower prices — about 5
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The beauty of the returnable deposit system is
that its recycling system is already working. Returnables
are the traditional way of doing business in the soft drink
industry.
Bottlers have plants and trucks adapted to the
system and the capability of acquiring more as necessitated
by a shift to the returnable deposit.
We believe that the market will take care of any
temporary dislocations caused by a return to returnables
and that the federal government should not intervene. A
three to five-year lead time should be included in the
legislation to allow bottlers and retailers to gear up to
avoid these dislocations.
There is no alternative to the returnable deposit
system which would so simply alleviate the problem of
throwaway beverage containers. Litter education, such as
Keep America Beautiful campaign, has done little to clean up
beverage cans and throwaway bottles from the countryside.
While resource recovery systems offer excellent
potential for recovery of energy and materials from post
consumer waste, they are economically feasible only in large
metropolitan areas, cost hundreds of thousands of taxpayer
dollars and take years to bring onstream.
The returnable deposit system will complement
resource recovery.
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Finally, the most talked about alternative to
mandatory deposits — the litter tax — has proven not to be
as affective in cleaning up beverage can and bottle litter
in Washington State as the deposit law in Oregon.
The tax merely provides funds to pick up the mess
once it has been made and adds to the cost that the consumer
pays for his soft drink or beer. By contrast, the returnable
deposit system prevents the litter problem before it starts
by providing a financial incentive not to throw away a
beverage container.
The system places the penalty for littering
squarely on the shoulders of the person who litters, not on
society as a whole through taxes and higher prices.
In summary, the returnable deposit system is the
most economical way to deal with the environmental and
economic problems of throwaway beer and soft drink containers
We urge the Committee to recommend its adoption. Thank you.
THE CHAIRPERSON: Thank you very much. Are there
any questions from the Committee?
Thank you.
THE MODERATOR: The next speaker is Mr. Steven
Burks from the National League of Cities.
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STATEMENT OF STEVEN BURKS
NATIONAL LEAGUE OF CITIES
MR. BURKS: Thank you, Mr. Williams. My name is
Steven Burks, I'm Director of the Solid Waste Management
Projects of the National League of Cities.
The National League of Cities appreciates this
opportunity to comment on the issues of federal legislation
for beverage container deposits. We commend the Environmen-
tal Protection Agency and the Federal Interagency Resource
Conservation Committee for their initiatives in exploring
approaches to address the issues of litter, the disposal of
solid waste and the conservation of resources and for their
commitment to gather public comments and input on the
beverage container deposit issue.
The National League of Cities recognizes that
programs to curtail manufacturing and packaging practices
and to control activities which contribute significantly to
solid waste disposal problems and resource consumption must
be initiated by government and private industry.
With regard to the specific issue of beverage
container deposit legislation, NLC's National Municipal
Policy, adopted in December 1976, reads as follows:
"Federal regulatory source reduction measures,
including the establishment of federal packaging standards
and a ban on the sale of no-deposit, no-return beverage
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containers should be coupled with a mandatory deposit of
sufficient value to encourage the return of containers to
proper distribution points."
However, prior to NLC's full support for beverage
container deposit legislation, we urge this committee to
recommend that a thorough examination of the relative costs
and benefits of the various alternatives be conducted,
particularly as the alternatives relate to local jobs.
While it may be argued that the overall effect of
beverage container legislation may be a long term net
increase in the number of jobs, it is NLC's concern that
the protection — that protection against loss of jobs in
cities in which bottling plants and container manufacturers
are located not be overlooked.
In accordance with this Committee's intention to
explore alternative solutions, NLC could support a system of
disposal charges with recycling credits, including limited
and temporary tax incentives at the national and state level
to encourage the recycling of solid waste materials.
In sum, the National League of Cities applauds
this Committee's efforts to address the problems of litter,
solid waste and resource use. It is NLC's hope that the
means to do this — the means to this end will be determined
on the basis of the acceptability, appropriateness, and
benefits to local communities and the nation as a whole.
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STATEMENT OF HENRY KING
U.S. BREWERS ASSOCIATION
MR. KING: Madam^ Chairman, members of the
Committee, I appreciate the opportunity to appear before you.
I'm going to be very, very brief.
In April of this year, we submitted to each of the
Departments represented here, detailed documents covering a
span of about seven years of studies conducted by the brewing
industry.
We have had a dialogue in the interim with OMB,
with Treasury — quite recently, MadamtChairman has given us
the opportunity to discuss the studies with her and it is our
understanding that EPA will be responding to these materials
in a relatively short time.
THE CHAIRPERSON: The staff of the Resource
Conservation Committee will be.
MR. KING: Oh, I beg your pardon — well, that's
good because some of the agencies represented here, while
they've had the materials for seven months, have not even
acknowledged receipt of it as yet and that's been somewhat
discouraging to us.
I think our position is pretty well Known. But
first of all, a brief note about tne Brewers Association.
We represent some 95 percent of the production of the United
States, and in addition, we represent most of the importing
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brewers who ship in from Canada, Europe and other parts of
the world.
We are opposed to mandatory deposit legislation.
One brewer takes exception to that position and that's the
Coor's Brewing Company of Golden, Colorado. They take
exception to the position, not because they believe in
mandatory deposit legislation as a viable alternative but
I believe — and I'm sure that they will be filing a state-
ment with you — they do not believe that resource recovery
will take place within a time frame sufficient to meet the
issue and they have also grave reservations about the
legislative prospects feeling in a sense that it's inevitable
but fundamentally, they don't see this as the best alternative.
Now we have a very simple position. We agree
quite readily that a mandatory deposit system will result
in a reduction of beverage container litter. We're
suggesting, however, that it is at a cost far in excess of
the benefits achieved.
We believe, too, that there will be a net increase
in jobs. We don't quarrel with that at all. We quarrel
with the quality of jobs. We don't think that it's good
national policy to lay off a steel worker or a glass worker
who is earning a very substantial wage and hire in place as
though it were a balance sheet, part-time school students
who sort bottles.
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There is no question that there is a net gain in
jobs but it's the quality of jobs and that impact which we
think demands your attention.
We question very seriously the advocates who have
said that the cost of more beverages will be reduced if we
go to a returnable or a mandatory deposit system and we ask
in vain for the studies that verify that.
We have in the documents that we have submitted to
you — I think spelled out very clearly through empirical
studies subject to your analysis and review, that it will
on the contrary cost the American public substantially more
and we would welcome any studies that would show this to be
not so.
Finally, the cost to the industry in terms of
conversion. We have submitted a study conducted by the
Wharton School of Business which would indicate that it woulc
cost the brewing industry some $2-1/2 billion to make the
conversion.
Again, we would like some analyses, critique,
evaluation of it. We think there are more affirmative
positive ways to deal with the subject.
Number one, we are completely committed to the
concept of resource recovery. We believe that -- as the
soft drink industry does — that perhaps the quickest, most
viable way of bringing that about is some type of a user
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charge or a tax placed on thosa commodities that add to the
solid waste — municipal solid waste stream as developed
through household usage and we are quite prepared to pay
what would be a fair burden on the brewing industry, bearing
in mind, of course, that any charge is always reflected
finally by the cost to the consumer.
We believe that the clean city system which
industry and labor have developed and which have been tested
for at least a few years now and tested very successfully in
Charlotte, North Carolina, in Macon and in Tampa, Florida,
deserve the attention of this Committee.
We're disappointed that no agency of government
has given any support or endorsement to this program in any
meaningful way and we think that it ought to be reviewed and
looked at because we do believe that it is an answer to the
problem of litter — not just beverage container litter but
all litter.
That's about where we're at. Very simply, we think
that the proposals will not result in the benefits that the
proponents purport to them. We have provided you with the
documentations which we welcome your citicisms of and we urge
you to look to the viable alternatives as we see them of
resource recovery funded by a user charge or tax and clean
cities anti-litter programs that are in effect.
One final point and I think this is something that
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EPA is very mindful of and I hope that the other organiza-
tions or other agencies are — repeatedly, over the past
several years, those spokesmen within government who have
talked about this so-called solution of mandatory deposits,
have repeatedly said that there will be a transitional perioc
and that there will be procedures and steps taken to minimize
the disruption.
Recognizing that there are costs involved,
recognizing that there is job displacement — indeed, in the
flyer that went out, there is a question that addresses
itself to that.
Unfortunately, in seven years, there is no evidence
that we have been able to find, either in conversations or
even employing Freedom of Information Act procedures, we just
can't find even a draft of a transitional study and I suggest
very respectfully that that's one of the major considerations
that should be given in any discussion.
I'm hoping that your ultimate decision will be
that deposit legislation is not necessary and not desirable
but I suggest to you that if you proceed along the lines
without looking to the impacts and how you're going to
implement it, you do a great disservice, both to yourselves
and to industry and certainly to labor and the consumers.
Now we found that some agencies seem to have lost
this material so if anybody doesn't know about it and would
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like to have it, it's available again in any quantities that
you want. I hope I'm not giving you the impression of being
annoyed or angry. I am giving you a very real impression,
though, that I am terribly disappointed.
We're disappointed that — particularly that some
of these studies are as much as six years old and agencies
of our government have ignored them. We think we have a
right to get your critique. If you don't agree with them,
you should say so.
If you find them faulty, you should say so and you
should say so not only to us but to the press and to use
every medium you have but to ignore it, I think is unfair
and I want to thank you, Madam Chairman, because you've
evidenced in our meetings a very real willingness to have
this material evaluated and we look forward to getting those
evaluations.
THE CHAIRPERSON: Thank you, and we have that
material available to anyone else on the Committee who would
like to have it.
MR. KING: We'll also make it available to the
proponents if they'd like to see it. It's here for anyone.
THE CHAIRPERSON: Appreciate that.
MR. KING: And we would like the opportunity to
file a statement with responses to the specific questions
within the next few days.
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weeks.
115
THE CHAIRPERSON: Most certainly. You have two
MR. KING: Thank you very much.
ToT-Z-l
THE CHAIRPERSON: Jim Tteasy of OMB has a question.
MR. -TOSH?: Thank you, Mr. King, for a somewhat
articulate statement.
What is the major adverse impact sustained by the
brewing industry should we implement mandatory deposit
legislation?
MR. KING: Well, there are two impacts. Number
one, we are at best a marginal industry. Of the 45 brewers
-- 48 brewers who are operating in the United States, for
the first nine months of this year, five of them are operatin i
with increased sales.
The rest are having declining sales and many of
them suffering severe economic losses. The small local
brewer and the regional brewer in our judgment will not be
able to find the capital to fund the conversion necessary to
make the changeover and we think that the attrition that's
taking place in our industry right now will be accelerated,
and we have documents we will make available with respect to
that. That's Number One.
Number Two, we believe that there will be a decline
in sales because of the fact that up until about the middle
of the 1950 's, until we went to convenience packaging, we had
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a relatively stable growth. We were pretty much at a plateau
With the advent of the convenience package, an
extraordinary thing took place. It gave new opportunities
for the consumption of the beverage. Heretofore, it had been
consumed either in a tavern or you took it home.
Now it was consumed at picnics, it was consumed in
all sorts of social settings where normally, it would not
have been consumed because of the lack of availability of
the convenience package.
I might also say without any hesitancy that that
was the beginning of the real litter problem as well. There"
no question about that.
Now, we believe that our sales will decline and
attending the decline in sales, we believe will be an obvious
loss of revenue to the states and to the federal government.
What extent to the loss of sales, we don't know, we're doing
worK on that —
TottJ
MR. BOOD¥: Were those data in those reports that
you furnished us? I didn't see them.
MR. KING: Yes, they're in the Wharton material.
And the final problem as we see it, and we're concerned with
this as well, there's no question that there will be a
disruption among the labor force of our suppliers. There's
a labor loss right there.
If you don't make cans, then you're not going to
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have can workers and finally, we are convinced and we think
we've demonstrated and documented it, that the cost to the
consumer will rise substantially.
•fozxa.
MR. TOOBi': I was asking just in terms of your
industry and I guess your two points were first as capital
requirements and second, that there's a reduction in sales
I guess was articulated —
MR. KING: Well, cost to consumers — you know,
we're in a consumer business — it's an impact on the
consumer — it has to end up —
TOZZJ.
MR. TOOEV: That would be related to your sales
reduction —
MR. KING: That's right.
TOIIK.
MR. gOCHBY: Well, let me ask you then, given those
two consequences, in your opinion or in the opinion of the
Brewers Association, would those events get worse if there
was a continued expansion of a local mandatory deposit action
In other words, from your economic picture, is that
aggravated by a continued expansion of individual localities?
MR. KING: Well, up to this point, up until the
adoption of the referendum in Michigan, the legislation in
Oregon and in Vermont — we're talking about less than '2.
percent of our share of the market and now with Maine coming
on and Michigan, we'll be something over 4 percent.
It will obviously have a disruptive effect in the
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Michigan area — highly industrialized — but we reach a
point — assuming that the legislatures act and these laws
are brought into effect. You reach a point where you've got
nothing but a chaotic situation.
If you have one state with a deposit system and
another state without it and you have to stop your lines to
run now packages that have the State of X, Y, Z on it — it
makes for a whole host of distribution and production
inefficiencies and at some — yes, the answer is of course,
it will do that.
But it's interesting to note that in the states
in the last eight years, this issue has been before state
legislatures almost 1400 times — almost 1400 times — and
up till now, three states through legislative process have
been enacted.
And we believe that the states understand the
problem and very frankly, we hope that we can be persuasive
of our federal government as we have been with the states.
Now I do think — I can be very candid with you on
this — unless we can have in position within a relatively
short time frame, some system of resource recovery —
without resource recovery, there is no justification for thi:
continuous system.
We can't justify making packages that aren't
recyclable and we believe that and I think everybody believe
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that. We have no quarrel with the environmentalists on that.
Our quarrel is that resource recovery has not moved as
rapidly as think it should have and we have been very critical
of EPA in this respect. The National Resource Recovery Act
of '76 that Senator Randolph sponsored -- the Solid Waste
Act — more officially known as — we think it should be
properly funded.
TOZZJ.
MR. TOCBY: — at a cost to the consumer, too,
because there was a large amount of appropriated funds put
in those and I'm not sure whether — without looking at the
funding levels again -- whether those are any more or less
expensive than some of the other actions --
MR. KING: We think the best deal for the consumer
and for industry and labor — the three components -- is
through some system of user charge or tax which is borne by
all of the commodities in the waste stream.
Beverage containers are a very visible symbol but
they don't constitute anything in the solid waste stream —
perhaps 6 or 7 percent. In the litter stream, we keep
hearing numbers of 20 percent but we've got very real
reservations about those numbers.
We don't think we as industry or government itself
has done a pretty good job in really quantifying what
beverage container litter is. We know it's a lot and we're
concerned with it.
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1 THE CHAIRPERSON: Are there any other questions
2 II of Mr. King? Is Mr. Stroh going to speak also?
3 || MR. KING: Yes, he is but perhaps in a less hurt
4 I and more polite vein than I.
5 Somebody has handed me a note — may I remain here
6 long enough to see if it's pertinent?
7 One of the proponents has asked for our material
8 || and I assure you, he will get it. Thank you very much.
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
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STATEMENT OF PETER STROH
U.S. BREWERS ASSOCIATION
MR. STROH: Madam Chairman, members of the
Committee, I am Peter Stroh, President of the Stroh Brewing
Company in Detroit and Chairman of the United States Brewers
Association.
For the past seven years, the United States Brewers
Association has advocated a nationwide network of local
resource energy recovery and recycling systems. The brewing
industry has argued that the development of a nationwide
network of resource energy recovery and recycling systems
would be more effective in a ccomplishing our national energy
and materials conservation objectives than any attempt to
achieve these objectives through source reduction by
eliminating non-returnable beverage containers.
May I respectfully remind all who are present here
today that EPA's own 1974 study, Energy Conservation Through
Improved Solid Waste Management, Report SW-125, confirmed our
position and may I respectfully suggest that it would seem
in the past, EPA has ignored not only our studies but its own
as well.
We have previously submitted documented evidence
that proved that a resource recovery strategy is a far more
cost effective solution for accomplishing our national
energy and conservation objectives than any source reduction
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strategy based on banning non-returnable beverage containers.
Municipal recycling provides a more effective
solution at a lower cost to the environmental problems
associated with beverage convenience packaging than reverting
to returnable bottles.
Dollar for dollar, resource recovery from municipal
solid waste will conserve at least four times as much energy,
get rid of eight times more solid waste and save at least
twice as much aluminum, ferrous metals and glass as returning
returnable bottles would.
Municipal recycling makes more environmental sense
in other areas as well. It will help eliminate the rodent
and groundwater contamination problems associated with our
present dumping and landfill practices to say nothing of the
environmental problems associated with atomic power plants,
offshore oil wells and coal strip mines that would be
required if the recovery of energy from municipal solid
waste continues to be neglected.
A favorable balance of payments impact of more
than $2 billion annually from the development of this energy
short source should not be ignored as well, nor should the
long term consequences of dissipating precious environmental
capital — costly and wasteful solutions to very serious
environmental problems be ignored either.
The United States Brewers Association has recently
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prepared an analysis which examines resource recovery as
an alternative energy source. This analysis shows that the
capital required to build a national network of local
resource recovery systems is significantly less per barrel
of daily oil equipment than the capital required to support
the widely discussed synthetic alternatives.
It also shows that when adjusted for a reasonable
lending curb effect, the investment required to support a
national resource recovery system becomes competitive with
the investment required to develop our coal resources.
The data sources for this analysis entitled
Resource Recovery as an Alternative Energy Source which we
are now submitting to the Resource Conservation Committee,
are basically studies for the EPA and Alcoa by Franklin
Associates and Midwest Research Institute and the MIT
Workshop on alternative energy strategies — second technical
report. Energy Supplied at the Year 2000.
If we utilize the Workshop estimates of the
components of the total investment, we can develop an
individual investment requirement estimates for coal gas,
coal liquids and oil shale energy sources and compare them
with the investments required for a nationwide system of
resource recovery based on the previously noted sources.
By resource recovery, it is possible to obtain
760,000 barrels of daily oil equivalent by 1990 for an
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investment of between 11.8 to $13.7 for — per barrel of
daily oil equivalent.
By contrast, for coal gas it would cost $29,000
per BOB. For coal liquids, $27,000 and for oil shale,
$12,000 while the investment for oil shale appears to be
approximately competitive with resource recovery, oil shale
offers a relatively modest energy potentialof something in
the order of 100,000 barrels of daily oil equivalent versus
the previously noted 760,000 barrels of daily oil equivalent
for resource recovery.
In fact, if total synthetic energy sources were
utilized by 1990, the country would receive 700,000 barrels
of daily oil equivalent for an investment of $26,000 per
barrel of daily oil equivalent compared with 760,000 from
resource recovery systems at less than half the cost.
I believe that when the Resource Conservation
Committee analyzes this report, they will agree that resource
recovery can and must make a vital contribution to not only
our growing solid waste problems but also more importantly,
when all national interests are taken into account, to our
essential energy needs as well.
These systems coupled with the clean community
system for litter elimination achieve the goals which we all
aspire to and agree with and which I referred to earlier,
conservation ot resources, energy savings, elimination of
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litter and reduction of solid waste.
Proponents of mandatory deposit legislation seek
to achieve these goals fay changing packagings. We seek to
achieve the same goals through cost effective techniques
which do not place an undue burden on the American consumer
or the taxpayer.
Thank you very much.
THE CHAIRPERSON: Thank you, Mr. Stroh. Are there
any questions? Yes, Mr. Tosey?
To^W-
MR. TOOE¥: Mr. Stroh, we heard earlier from Mr.
King that the imposition of a mandatory deposit legislation
would possibly act to the detriment of small brewers because
of the capital costs.
Then prior to Mr. King's statement, we heard earlie
— at least it's my recollection that the imposition of
mandatory deposit legislation might help regional'bottlers
because of the return rate and the decentralization of the
process.
As one of the nation's major brewers, what is your
position on the relative --
MR. STROH: I agree with Mr. King's position.
There's absolutely no doubt in my mind that deposit legisla-
tion or returning to returnable bottles would accelerate the
shakeout that's presently taking place in the American
brewing industry.
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ost of
smaner brewers in this country are
prepared to produce so-called one-way packages and they're
not in a position to convert their business back to
returnable packages.
T^VlS-
MR. TO3EY: Thank you.
THE CHAIRPERSON : What was the impact on the
brewers in the states that have mandatory legislation now?
MR. STROH: Well, I would like to defer to Phil
Katz who is the economist of the United States Brewers
Association to answer that question.
THE CHAIRPERSON: If Mr. Katz could answer it
briefly because Congressman Hughes from New Jersey arrived
some time ago and we would certainly like to hear him as
quickly as possible before the lunch break.
MR. KATZ : The only data that we really have on
that would be for say, the State of Oregon. We do not have
profit data — we are not in the business -- or can be in
the business of collecting that — but I can tell you that
in that particular state, the leading brewer in that state
prior to deposit legislation was a local brewer who at that
point had about 35 percent of the marketplace.
Today that brewer has about 23 percent of the
marketplace. I'm not necessarily saying it's totally a cause
and effect relationship but mandatory deposits caused him —
or caused that company to lose share of market but I'm also
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STATEMENT OF CONGRESSMAN HUGHS
STATE OF NEW JERSEY
CONGRESSMAN HUGHJ^J Thank you very much. Members
of the Committee, my name is William J. HughftS member of
Congress representing the Second District of New Jersey. I
want to personally thank the Committee for accommodating me
— we went into session at 10 o'clock this morning/and have
been voting on a rule and it was necessary for me to change
my appearance time.
I am pleased to have this opportunity to testify
before you on the important subject of a nationwide system
of beverage container deposits. The major issue in my
judgment before the Committee today is whether we should
attempt to eliminate one source of solid waste, namely
beverage containers, from the waste stream.
The means for controlling those containers would
be a mandatory deposit that would discourage the disposal of
those containers and presumably encourage their reuse. The
benefits to be derived from the approach according to its
proponents is a savings of energy, a control of litter, a
reduction in the amount of solid waste. Those, of course,
are very worthwhile objectives.
But as usual, there's a price tag associated with
the advancement of our goals. My home State of New Jersey,
we have over 14,000 people employed directly by the glass
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1 industry — most of those in my district.
<*8
2 Many thousands more|yindirectly employed. A great
3 many of those employees, as I indicated, are in a district -
4 my district — which has an unemployment rate right now of
5 about 13.6 percent, the highest in the state and well above
6 the national norm.
7 It's axiomatic to say that any measure that
8 discourages the manufacture of a certain product is going to
9 result in a loss of jobs in that particular industry. The
10 effect of bottle laws in those states that have them
11 demonstrated that the job losses do result.
12 In Oregon, the Owens Illinois plant in Portland
13 had ten forming machines before the bottle law went into
14 effect. In February of 1976, the president of Local 112,
15 the Glass Bottle Blowers Association, reported that two of
16 the forming machines representing 50 jobs each had been
17 removed from the plant and that two more idled all as a
18 consequence of the new law.
19 In addition, two can plants in the neighboring
20 State of Washington closed down completely after the ban
21 went into effect. Although a survey sponsored by the State
22 of Oregon indicated that 250 jobs were gained as a result
23 of the ban, it's also apparent that 450 jobs were lost with
24 a net loss of some 250 jobs.
25 The question then becomes whether we wish to
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repeat that experience on a nationwide basis. If we had no
choice, then we would have to do it and pay the price but
are we faced with that situation? I frankly don't think so.
I think we can achieve our goals without putting a
lot of people out of work. In fact, some of the alternatives
open to us may accomplish our same goals even more effectivel
than with a mandatory nationwide beverage container deposit
law.
If i£'s litter we're concerned about, the State of
Washington has a model litter law that has achieved results
at least equal to and probably better than Oregon has
achieved in terms of reducing roadside trash.
It's based upon public education, the widespread
distribution of litter receptacles and penalties on those
who litter. The program is financed through a small fee on
all those involved in the sale of materials that may end up
as municipal trash.
Considering that only 20 or 30 percent of litter
is beverage containers, it seems that the model approach
would have a far more beneficial result in the long pull
in reducing overall litter, rather than litter from just one
source.
A major concern to all of us is energy and
whether a nationwide deposit on beverage containers might
help us, save some energy, is really in question. It
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certainly deserves a great deal more study.
It appears, for example, that refillable container
must be made stronger and more durable materials and that
requires more energy in the manufacturing process because
they're heavier, more energy is, required to transport these
containers, perhaps as much as 30 percent more.
Beyond that, to be effective in saving energy, a
bottle must be reused a certain minimum number of times.
Although this has been achieved apparently in Oregon, it's
not clear that this minimum level of reuse -- probably about
six returns per bottle — will be achieved nationwide.
Consumers in some areas, such as New York City,
have demonstrated an overwhelming preference for throwaway
containers as compared to other big cities. Some tests
conducted at Yosemite National Park and at various military
bases, indicates that the minimum level of return may not be
achieved universally.
We're talking about changing basic habits and
lifestyles. There is also the energy expenditures required
for cleaning the bottles for each reuse and the potential
for increased truck travel to transport refillable bottles
back and forth.
The financial and energy expenditures for convertiig
bottles — and manufacturing plants, the use of refillable
bottles must also be considered by the Committee.
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Considering that the manufacture of non-returnable
beverage containers accounts for only one-half of 1 percent
of our nation's total energy usage, I seriously question
whether this is a fruitful area for a conservation effort,
particularly if it is so costly in terms of jobs.
The final item of concern is the impact of
disposable beverage containers on our overall management of
solid waste. I'm of the viewpoint that the problems will
persist whether or not we eliminate beverage containers from
the waste system.
Moreover, viewed in perspective, it's apparent
that aluminum and glass beverage containers are only a small
percentage of our overall waste only between .25 and 1
percent of aluminum is aluminum and between 7 and 8 percent
is glass. Those are really not overwhelming amounts.
In addition, between 55 and /5 percent of the
aluminum cans can be extracted for recycling and between 30
and 60 percent of the glass.
There's one last item that I'd like to touch upon
which is an intangible factor but nevertheless I think
significant. As a federal officer holder who must seek
election every two years and a new member of Congress, I've
seen a growing tide of resentment against federal intrusion
into individual and personal business lives.
Some of these intrusions are indeed necessary but
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others only create major inconveniences and often hold
federal programs up for ridicule. We ban flammable children'
sleepwear only to find out later that we created a major
cancer hazard.
Some of the regulations promulgated by OSHA have
created turmoil in the business community. In some instances
have been difficult to justify. With a nationwide bottle law
we would be creating a hassle for an awful lot of people and
perhaps unnecessarily.
A consumer will have to cart his empty bottles and
cans back and forth to market. The storekeeper will have to
do a lot of bookkeeping and paper work to keep track of
deposits as well as devote a portion of his premises to the
unproductive purpose of storing a lot of empty bottles and
cans.
The bottler will have to go to great lengths to
pick up and drop off empty bottles and cans. We're likely
to encounter a great deal of public resistance. Since 1970,
bottle laws have been rejected in 10 out of 13 referendums
that were held at the state and local level.
To many people who have become used to throwing
out their empty bottles and cans, the deposit will simply
be regarded as a cost to the product and I don't have to
tell you what the glass worker on the unemployment line is
going to be thinking and in terms of cost, it is going to
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134 j
cost the consumer more money.
In conclusion, it's iny feeling that a nationwide
ban on throwaway containers will not result in a substantial
savings of energy or any meaningful reduction in our solid
waste burden.
In terms of litter control, there are other
approaches that can be as much or more effective. I might
also add that as we begin to try to address the whole host
of problems dealing with waste disposal, it may be that we're
doing ourselves an overall disservice because we ought to be
addressing the problems of how to dispose of sludge and other
forms of solid waste which we have to begin to recycle in
the years ahead.
In addition, a number of negative results might
very well come about including a loss of jobs, as I've
indicated, increased consumer prices and the resentment.
Because I have so many glass manufacturing plants in my
district, I've made an effort to keep informed as to their
activities and I know they're making a serious effort to
reduce their energy usage and they are achieving it — some
successes and we hope for more.
The main problem with disposal of beverage
containers is that they're frequently disposed of on our
roadsides, parks, and other public places instead of the
trash can where they belong. The clear success of Washingtor
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State's model litter law and overall GO percent reduction of
litter is a clear indication that there are viable alterna-
tives to bottle laws. Alternatives that spread the burden
around to all the producers of litter and not just to one
industry.
One fruitful area of inquiry would be to -- a
program to encourage our states to follow the lead of
Washington State. Such a program, when combined with
increased use of prudent resource recovery techniques would
help us achieve our common goals without inviting economic
disruption, inconvenience and loss of jobs.
I thank the Committee.
THE CHAIRPERSON: Thank you, Congressman HughfcS.
Are there any questions from the Committee?
Thank you.
CONGRESSMAN HUGH<$; Thank you much.
THE MODERATOR: The next speaker is Mr. Roger
McClure from the Sierra Club.
THE CHAIRPERSON: Let me say at this point that —
excuse me, Mr. McClure, before you start — we are going to
have to recess promptly at 12:45. We will be back promptly
at 1:30. I'm sorry for the inconvenience that is caused to
you — those of you who have testified this morning. We will
say though until we've heard the last speaker or reschedule
tomorrow.
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THE MODERATOR: Thank you, Ms. Blum. Excuse me,
too, for making a brief announcement. I hope you won't
consider it too much of a federal intervention if I suggest
that you eat lunch in the cafeteria below here in this
building, if you will, because we encouraged them to prepare
— to buy extra food in anticipation of a crowd. You may
eat elsewhere, of course, no penalty —
Thank you.
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STATEMENT OF ROGER McCLURE - SIERRA CLUB
MR. McCLURE: I will address that federal
in te rven ti on.
Chairman Blum, federal citizens, my name is Roger
McClure and I am an attorney and citizen volunteer with the
Sierra Club, a nationwide organization of over 175,000
members.
Members of the panel, imagine yourself in the Oval
Office with a conference with the President. You say to
President Carter, Mr. President, I have a program which
reduces energy waste; helps to clean up refuse from our
nation's roads, parks and streams; creates a net increase of
over 100,000 new jobs; will save consumers over $2 billion
a year; reduces our waste of valuable natural resources and
uses self-interest to encourage every American to lead a
less polluting life.
Also, a recent poll showed that 73 percent of
Americans support a program like this. Voters of two states,
Michigan and Maine, recently overwhelmingly approved a
program similar to this.
We have had public hearings, detailed studies,
have looked at the issue and the citizens and the facts
support this program. Well, that sounds great, I don't often
get someone who comes in with a program like that every day.
Certainly there must be problems with this program. Not
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every program is perfect.
Yes, there will be some dislocations in the metal
and glass fabricating industries. These are important
problems we have to address. We can solve these. We can
solve these problems by special Labor Department programs
designed to help any individual or companies hurt.
I also recommend that the program be effective two
years or some other date after enactment by Congress so that
industry can smooth out any transitional problems.
Wonderful. But tell me, what is this program?
The program is to establish a minimum 5
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the lives of every American into their very refrigerators?
No, Mr. President, this is one of the best things
about this program. It uses the free enterprise system and
the individual's own self-interest to make sure that it works
in that federal bureaucracy.
Companies and people will return the containers
because they're worth 5* each. The Boy Scout says —
mentioned before — will have drives to make sure that these
people who don't want to go to the trouble when they go to
the store to buy their soft drinks, rather than also putting
the soft drink containers used, once in their car, can have
Boy Scouts or other people pick them up for them.
They don't have to under this program to take them
back.
You certainly must remember, Mr. President, as a
kid, picking up pop bottles along the road or other places
to get a few pennies to go to the store — this program
brings back a new idea — a good idea from the past to solve
a modern problem.
The Sierra Club hopes that this scene will soon
take place in the Oval Office.
In brief, the Sierra Club endorses the mandatory
5
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after we have had some experience with a nationwide deposit
on these containers.
The program should preempt inconsistent state law
to avoid needlessly complicating the business of the soft
drink and beer industry. A tax on unrefunded deposits
would burden the administration of the program and would
harass the beverage industry.
The unclaimed deposits would help bottlers and
manufacturers to make the transition back to deposit
containers and encourage them to support the program.
Finally, the deposit should begin at the beverage
producer or filler stage because these are the businesses
most likely to be able to reuse returnable containers.
The staff draft papers I received, the Resource
Conservation Committee's work, sets forth the reasons and
facts sufficient to support a deposit program and the Sierra
Club endorses the implicit recommendations of these staff
papers.
Are there any questions?
THE CHAIRPERSON: Jim Tllllj of OMB.
MR. veSBV: That skit you played that you wish
would take place, I wonder if you would just add a few more
scenes to it —
MR. McCLORE: Sure.
MR. TOOD1*: I know you've got to get in there and
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141
out of there quick —
(Laughter)
•Tails.
MR. TOOG'J: From the Sierra Club's standpoint,
do you then — when you said there was no federal bureau-
cracy, there would be no federal enforcement role whatsoever
in any legislation — if some were enacted?
MR. McCLURE: One of the bills in the Senate does
allow EPA to issue rules and regulations. There is the hope
of the Sierra Club that the program can be designed to use
economic incentives to the maximum possible —
follj.
MR. 'HJUEi: What does that mean —
MR. McCLURE: That means that if the container is
worth 5*, then it's likely that people would return it. If
contrary to the evidence we have so far as how these programs
have operated in the states where they have similar minimum
deposits, contrary to that evidence, if the program does
fall down, according to what some of the people have said
here today, then it may be necessary to have additional
federal intervention.
I would hope that that would not be necessary and
you ought to try the deposit first. It has worked in the
other states, before you start in on the program with an
enormous amount of federal enforcement by swooping down on
beverage distributors or manufacturers for frinfclnn~ —
infractions they may consider minor.
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The beauty of this program is using the 5C
minimum deposit to get people to lead a less polluting life
and I think the program should be enacted and with that as
the main way to handle it, you're obviously going to have to
issue some rules and regulations — there ought to be a
provision for EPA to issue rules and regulations in a
proposed statute.
But let that be the main way and then if it
becomes necessary to have further federal intervention --
which I doubt -- that's not our experience so far -- that
may be necessary or maybe the program has to be reexamined.
T»TX*
MR. gOOB¥: Would it be accurate then to
characterize your position as no enforcement role and
letting it see if it works — then seek federal enforcement
authority?
MR. McCLURE: Well, obviously, if you're going to
say that there has to be a 5* minimum, there will have to be
some enforcement role. What I'm talking -- trying to say --
you want to pass the law, have EPA issue some rules and
regulations to make sure that everybody is using the 5*
minimum deposit.
But what I'm saying is you don't issue rules and
regulations from the beginning. EPA goes out and closes
down some businesses for months or years because they
haven't switched, say to bottles — returnable bottles or
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something like that.
TolZi.
MR. TBOBff: Thank you.
THE CHAIRPERSON: Are there any other questions?
Thank you very much.
THE MODERATOR: As you can all tell, we're running
a little over an hour behind time. I certainly hope that
the several spokesmen and spokeswomen who were scheduled to
come on in the morning can come on right after lunch and I
should like to take the remaining time before lunch to offer
an opportunity to anyone who did not have a prepared
statement but who desires to make a comment of any kind or
ask a question of anyone to do so.
If no one so desires, we will go on to the next
speaker for the remaining few minutes of the morning session
VOICE: I'm Charlen Nimo (ph.) representing the
Florida Resource Recovery Council which is a group of 13
people instituted by '74 legislation. It includes
representatives of industry, business, education, the
environment and also four legislative members.
Although the major part of our work has been in
encouraging a very aggressive resource recovery program and
a state solid waste management program, we also operate
under the concept that energy recovery should not be a
self-fulfilling prophecy.
We have legislation that prohibits local bottle
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bills so they must be considered either at the state level
or at the national level.
Recently, Florida was considering an Oregon type
mandatory deposit bill and part of the testimony that
occurred did cover some of the elements that have been
discussed today concerning a brief survey of some beach
litter.
Some of the things that we were told was that in
this brief survey of Jacksonville beaches, that we could
find, if we looked at total number of pieces, 25 to 40
percent were throwaway bottles and cans.
If we looked at the volume, it was about 50
percent and if we looked at the weight, it was about 70
percent. But if we looked at the element of non-bioldegrad-
ability, it was 90 percent.
Now in Florida, we're really very interested in
the two issues, electrical energy production occurs from 75
percent of imported oil but of course, our beaches and the
litter issue is very important for a state that is tourist
oriented.
I might add that the Council did approve the
mandatory bottle legislation by a split decision. However,
it was one of those bills that was referred to that never
did get out of committee.
We're very anxiously awaiting your findings on
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this issue and also the product charge because we're
interested in the entire solid waste situation and we are
also interested that your basic assumptions be very realistic.
We have some questions concerning the 12 to 15
trippage rate. I guess my summary statement is that we are
anxiously awaiting your inpUt and are very pleased that you
are looking at the bottle legislation, the product charge,
the resource recovery and the whole issue.
Thank you.
THE MODERATOR: Thank you. Any comments or
questions from the Committee members?
All right. Does anyone else have a question or a
comment to make, please?
Very good — oh, I'm sorry, yes, ma'am?
MRS. POWELL: Mr. Williams, I'm down here as
President of Keep Loudon Beautiful, Ms. Bea Powell. I
actually have a last name, it's Harrison. I would like to
give my five minutes to Mr. Brownell. May I do that? We
actually have just a very short little statement. He's a
supervisor at Loudon County and he's due in Richmond at
another meeting.
THE MODERATOR: I see.
MRS. POWELL: We would appreciate it.
THE MODERATOR: You want to let Mr. Brownell on
before lunch?
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MRS. POWELL: If Mr. Brownell would come on. We
have printed a little thing and its good reading. It'll be
a lot more interesting than those studies --
(Laughter.)
MRS. POWELL: Here's Mr. Brownell.
THE MODERATOR: All right, Mr. Brownell, welcome.
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STATEMENT OF JAMES BROWNELL
KEEP LOUDOUN BEAUTIFUL
MR. BROWNELL: MadamfChairman, members of the
Committee. I, too, will echo some of the previous introduc-
tory remarks. I am very pleased that you have held this
hearing and that you are soliciting our input.
I have a lot of different views. I have a prepared
statement. I might start off with maybe what we're talking
about is that sign over there — some people might object to
but in the common interest, you put that up there -- No
Smoking. I think that's what we're talking about.
I'll go on with my prepared statement.
My name is James Brownel! and I am a member of
the Board of Supervisors of Loudoun County, Virginia, have
been for ten years. During that time, I chaired the Special
Container Committee of the Metropolitan Washington Council
of Governments.
We went through lengthy discussions and hearings,
finally setting up guidelines for beverage container
legislation for the COG area. That was in 1974. To date,
only Fairfax County actually has a deposit ordinance being
enforced.
Our ordinance in Loudoun goes into effect
January 1, 1978. Two different Boards of Supervisors in our
county have voted unanimously for a refundable deposit
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ordinance; first in 1971 and again in October of tiiis year,
after an unfavorable court ruling on the 1971 ordinance,
and I've enclosed for the record a copy of our ordinance.
It is patterned after the Oregon law and very
similar to the federal legislation which has been submitted.
It, too, requires the minimum deposit of 50 on containers of
carbonated soft drinks and beer to originate with the
purchaser.
Now there is a difference between our ordinance
and Fairfax County and I'm sure you will be hearing about —
I see Allen Magazine is on for this afternoon. It mentions
that the pull tab opening -- we do not mention our ordinance
— the code of Virginia reads that on and after January 1
of 1979, no person shall sell or offer for retail — resale
— any beverage container and so on, the point being that
state law will take care of the detachable opening.
Now to get into the general area that's been
discussed here, pros and cons — and I will bore you with a
few figures which you get so many. We've been through these
hearings on a local level so many times and we heard so many
sets of figures, I'll try to be brief on them.
But we do have some very strong feelings in our
area and I have to agree with the earlier Congressman who
came on. We're representing the people. Basically, I'm a
good old conservative Republican but when it comes to bottle
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legislation, I guess I'm a flaming liberal.
It's an issue that the people — they have their
feelinys and they feel so strongly about it. Anyhow, to get
on with the statement.
We feel very strongly the deposit is the only way
to get at those cans and bottles that litter the highways
and get onto private property and I'm a farmer and I can
speak with experience with what happens to some of us when
it gets on private property.
We don't find tomato juice cans or cottage cheese
containers along the road. Leave them out. We're just after
those that are littered. We want a minimum deposit, not a
tax.
The 5
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program of recycling gives 15C per pound for aluminum.
There is not enough value here. People will not pick cans
up and haul them to a place for redemption when they are
paid less than one cent a can.
In Virginia, the Virginia wholesalers gave to the
Highway Department peli-cans which are trash receptacles.
They put them out over the state. They didn't work. The
industry has stamped cans "Don't Litter". Fine and dandy,
but it doesn't work.
Our volunteers are tired — by our volunteers, I
mean the citizens of Loudoun County — from little old ladies
in tennis shoes all the way across to Boy Scouts, — are
tired of picking up litter which our studies show that some
66 percent of the bottles and cans picked up along the roads
of our county would have been covered by the deposit
requirement of our ordinance.
Then we have to turn around and do this every year
at our annual spring cleanup. I agree with some other
speakers in this particular area. The answer is not another
study.
Well, speaking of studies. Last year, the Virginia
General Assembly ordered a study under the Litter Control
Act of 1976. They ordered this by the Highway Department.
The results proved what we have been saying all the time --
that beer and soft drink containers and food related wrappers
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and containers represent the largest proportion of litter.
Now we'll get into a few figures here. This is
from the Highway Department's study, not our own. The
combined data show that beer products — bottles, cans and
cartons — constitute the largest proportion of litter,
about 29 percent by item count, 41 percent by weight and 27
percent by volume.
Proportions of returnable versus non-returnable
beer and soft drink bottles along highways were addressed.
There they found that essentially 100 percent — this is
the conflicting figures that I know you're exposed to -- but
the Highway Department has found that essentially 100
percent of the beer bottles were non-returnable and in
parenthese, I have only 2 percent — only two returnable
beer bottles were found in all of the samples and 85 percent
of the soft drinks were non-returnable.
Last summer, the County put out a team of young
people under the Youth Corps program of the Department of
Labor, to clean up old dumps. They went to 22 sites and
hauled over 55 tons of trash to the county landfill.
Here again, the percentage of non-returnable
beverage containers in some areas of these illegal dumps
ranged to as high as 80 percent.
In conclusion, try to respond specifically to
some of your questions, we feel yes, we should develop
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specific federal container deposit legislation which should
supercede state and local laws with no compensation to the
industry.
Reasons have already been explained by others.
Standard national legislation will make it easier for the
industry to comply. This is our objective and I thank you
very much for your time and I appreciate your letting me on.
THE MODERATOR: Thank you, Mr. Brownell.
I would ask if there are any questions or comments
from either committee members — all right, thank you, Mr.
Brownell.
I have three brief things to say. One is I
apologize to the Can Manufacturers Institute, the Food
Marketing Institute, Rhode Island Solid Waste Management
Corporation and the Public Interest Economic Center and
Environmental Action, Inc., for the fact that we were not
able to get you on this morning.
We'll start with you at 1:30. Now one more thing.
If anybody who has given a prepared statement, has not
already done so, please leave copies of your material at
one of the registration desks and the third thing is that if
this meeting goes on beyond the 6 o'clock deadline that the
establishment here has imposed on us, we will continue the
meeting tomorrow — not in this auditorium but in an
auditorium close by in the Department of Commerce auditorium
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where you can enter through the main door of the Department
of Commerce on the west side of 14th Street. We couldn't
get this hall tomorrow at 9.
If we don't finish tonight by 6, we will resume
tomorrow at 9 in the Department of Commerce auditorium.
All right. That's it. Have lunch downstairs and
be back at 1:30, please.
(Whereupon, the meeting was recessed for luncheon
at 12:45 P.M., to reconvene at 1:30 P.M. this same day.)
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AFTERNOON SESSION
1:30 P.M.
THE MODERATOR: Welcome back from the cafeteria.
We'll now continue with the summaries of formal statements
and continuing from where we were broken earlier.
Our first speaker will be Mr. Mai Owings of the
Can Manufacturers Institute.
Would you have the people on the outside brought
in, please? Forcibly —
STATEMENT OF MALCOLM W. OWINGS
THE CONTINENTAL GROUP, INC.
MR. OWINGS: Thank you. Madang Chairman, members
of the Committee, ladies and gentlemen, I am Malcolm W.
Owings, Vice President of the Continental Group.
As spokesman for the Can Manufacturers Institute,
I am pleased to make available what I believe to be
significant new information on litter, aspects of solid waste
recovery, retail store impacts, energy and the use of critica
resources such as oil and water as they all relate to this
proposed legislation.
Attached to my testimony are excerpts from the
following contemporary research, either not previously
published or just made public this month.
The first is a Litter and Litter Management in the
United States: An Exploratory Investigation by the Stanford
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Research Institute finished in February of this year.
The second is an Independent Assessment of Litter
Reduction Effectiveness by the Institute for Applied Research
to be published in October — this month.
The third is The Use of Water in Beverage Filling
Operations by the Midwest Research Institute completed in
June 1977.
The next are some costs from the Americology
Resource Recovery Operation for this year in Milwaukee,
Wisconsin.
The next is an excerpt from the Progressive Grocer
Magazine which is a Survey of the Impact of Forced Deposits
on those states which now have them in operation. That is
on the stands right now, October 1977 issue and the last is
a Preliminary Energy Use Impact Study that my company did.
Now these studies highlight the following facts:
The litter problem is a behavioral characteristic
induced by affluence, vastly increased mobility of the
American population and the failure of local government
services to keep pace with these changes as measured by per
capita expenditures for sanitation and clean-up services
from 1960 to 1975.
Funded by industry and labor, behavioral
scientists developed clean community systems now installed
in over 70 certified cities in the United States.
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The Applied Research Institute study found beyond
doubt that the three original Clean Comriiunity System test
cities have effected a 40 to 50 percent overall litter
reduction compared to control cities where such systems have
not been in practice and where they've only used piecemeal
operations against litter.
The Clean Community System is the only litter
program endorsed by the American Public Works Association.
Now, the American Public Works Association happened to be
the very people that are in charge of sanitation and cean-up
in this country. They're the ones that perhaps know more
about it than anyone else and this new research proves it
has reduced more litter effectively than all the deposit
bills ever passed.
For the first time in any litter research, proper
adjustments for vehicle volume, pedestrian traffic and
location of entrapment potential such as ditches, hedges,
fences, etc., was factored into the statistics.
In a similar manner, the Institute also studied
for the first time two states to accurately compare litter
rates in terms of actual human exposure to litter in various
types of rural and urban locations accounting for the size
of litter items and the frequency of clean-up.
Upon measuring 110 — I'll repeat that — 110
comparable locations in each of the states of Washington and
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Oregon, Washington measured in the months of June and
September 1977 was found to have a 29 percent lower amount
of litter based on the square foot of accumulated litter per
mile.
Beverage can and bottle litter in rural areas
during June of 1977 were found to be 7 percent of all litter
in Oregon and 11 percent of all litter in Washington but
less than 3 percent of total litter in the urban areas of
both states, suggesting that if the goal is to reduce all
litter, a broad based litter tax funding litter education
and stronger litter law enforcement that is in place in the
State of Washington may work better than a deposit bill
without any economic or personal employment dislocations,
I might add that since I used the term "litter
tax" here, I learned this morning we ought to call it a
handling charge. One of our Congressmen suggested that so
from hereon in, I will so do. In any event, I know who it
costs.
It is interesting to note that these Oregon
statistics show that as ring pull tabs from cans declined
in Oregon litter, and they have — the number of bottle caps
increased significantly, approaching an even exchange rather
than any sizable overall litter reduction and this is by
count and we are submitting the statistics to you.
The Midwest Research Institute study finds that
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refillable bottles require significantly greater amounts of
heated process and wash water than cans or non-returnable
bottles.
In some cases, three and a half gallons more per
bottle at the filling locations which results nationwide in
two to eight times more water being required in any refillabl
bottle system.
Therefore, if the proposed federal deposit
legislation resulted in 80 percent of all beverage products
to be sold in refillable bottles, water use would increase
by a minimum of 7.5 billion gallons at these beverage
filling locations.
Now in looking at where the water shortages are
in this county, we have determined that two-thirds of all
beverage filling locations today either have water shortage
problems in their area or are predicted to have such problems
by 1990.
Actual cost data in the operation of the Americolog
Resource Recovery Plant reports an average disposal cost of
$23.50 per ton to recover and recycle up to 90 percent of all
the cans in the solid waste stream of Milwaukee.
Now when I say all the cans in the solid waste
stream of Milwaukee, I mean that. The paint cans, the hair
spray cans, the food cans and the beverage cans as well as
coat hangers are all in that.
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1 The bottle bills in Vermont and Maine mandate, a
2 handling charge of one cent per container. Since there are
3 an average of 31,000 beverage cans per ton, these deposit
4 collection systems cost $310 per ton for the handling cost,
5 13 times the cost in Milwaukee and we should remember the
6 cans are still in the retail stores contributing to future
7 health and sanitation problems as was recently reported on
8 television in Medford, Oregon.
9 Anyone who is interested, should get in touch with
10 the Department of Health and Sanitation in Medford, Oregon
11 and you will learn what happens after several years of return
12 containers in back rooms.
13 As stated, the Milwaukee system recovers up to 90
14 percent of all cans compared to a return rate in the EPA
15 Yosemite Park test of just less than 75 percent. This means
16 that Yosemite Park — if you wanted to look at an equivalent
17 trippage rate, is 3.6 trips and a 10 trip equivalent in the
18 Milwaukee system.
19 So any time you want to talk trips, you'd better
20 look at the real world out there and what happens when you do
2i take them from the solid waste stream as resource recovery.
22 Now this month, the Progressive Grocer Magazine
23 reports that three out of ten retailers in Oregon would like
24 the bottle bill repealed and six out of ten want it modified
25 to include a container handling allowance because of the high
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cost of handling — you've heard that before.
The large urban supermarkets in Oregon are where
the most opposition to the bill exists and if this is true
in Oregon, can you imagine what might occur in urban retail
markets east of the Mississippi?
We are talking about costs that are paid by the
consumer. The already published Research Triangle Institute
study refers to "Equivalent Barrels of Oil" but I suggest to
you that there is no such thing as an equivalent barrel of
oil. You cannot run a truck on an equivalent barrel of oil.
All BTU's saved in an energy system are not equal
to each other. For example, the RTI determined that a
beverage container system uses substantially more coal than
refillable bottles and refillable bottles use more petroleum.
Further study by my company and now being confirmee
by preliminary reports from the Batelle Institute is now
indicating that 80 percent of the energy used in a refillable
bottle system consists of critical resources such as oil and
natural gas, where only 50 percent of the energy used in
cans is oil or natural gas.
This suggest that substitution of refillable
bottles for cans would increase the use of oil and as
previously stated, water and the majority of energy savings
that would take place would be a savings in the use of coal.
This seems a strange direction and proves that all
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1 BTU's are not equal and the reckless use of equivalent
2 barrels of oil nomenclature should be seriously questioned
3 and perhaps considered unacceptable in the future.
4 On Page 2 of the Executive Summary of the Resource
5 Conservation Committee's Report of October llth it states
6 and I quote — "Deposit legislation would result in energy
7 savings of 25 to 35 million barrels of oil per year."
8 I suggest the energy saved would be coal and I
9 hope that you have not been misled as others have been by
10 using equivalent barrels of oil from other studies.
11 Today, the federal government indicates they want
12 to participate more in the planning and management of the
13 U.S. economy. Now, businesses have learned that in order to
14 plan their operations, the principle of test marketing must
15 be utilized and business spends literally millions of
16 dollars and several years test marketing in several different
17 types of regions before going nationwide with any new product
18 or system.
19 The agencies up until now seemingly presume that
20 the Oregon experience is a good typical test for the nation.
2i In truth, Oregon, as is Vermont, is mostly rural with less
22 than 1 percent of the U.S. population and really quite
23 dissimilar to 95 percent of the states east of the
24 Mississippi as well as the States of Texas and California.
25 Business uses test market analysis to make sure
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that their judgment can stand up in the public forum before
spending stockholders funds. While there has been reams of
rhetoric on rural Oregon, we believe only now the first
scientific market test analyses are being made.
In addition, the next real test market is the
State of Michigan that has also passed this law, as you all
know, effective next year. Should federal legislation be
passed before this important urban test market counsels all
of us on what future courses we should take?
Up until now, I have deliberately limited my
comments to new information. However, I would be remiss if
I did not repeat on behalf of the thousands of wage earners
in my industry and supplier industries that such deposit
legislation could have serious economic impact on 50 percent
of our employees in the United States and therefore, you
must establish that the benefits of this legislation are
major and compelling in order to justify its support.
There are five questions I think we should ask;
can we afford to pass a national law that forces beverage
fillers to use more water when up to two-thirds of those
locations are now or are about to be short of water?
Can we afford to pass a law that mandates the
savings of coal and the additional use of oil because it —
we didn't do all of our homework on BTU's?
Can we afford to pass a law that has such
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significant impact on urban retail stores without a real
urban test market?
Can we afford to pass a law that by all research
available to date reduces overall litter in Oregon, only 10
percent with significant employment and economic dislocation
in urban areas and I emphasize that.
Can we afford to ignore what I believe this new
research suggests -- that a broad based litter tax, like
Washington, combined with the application of Clean Community
Systems may be the answer to effective litter control.
I suggest it's about time proven principles of
market tests analysis be applied to such situations and we
all lower our voices on this subject and start doing our
homework.
We know we have more to do. Frankly, we believe
the agencies do also, and I thank you.
(Report follows.)
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THE CHAIRPERSON: Any questions? Comments? Yes,
sir?
VOICE: I have a few questions, Mr. Owings.
You mention the Michigan deposit law which is
scheduled to go into effect in January of 1978. I have
heard or spoken to a gentleman whose name I can't remember
who contends that there is a great deal of pressure being
brought to amend that law by various special interest groups
which will make that test perhaps non-represenative.
Could you comment on this gentleman whose name I
can't remember statement?
MR. OWINGS: I'm afraid I don't know whom you're
referring to so I have a little problem there. There has
been a hearing held in Michigan by the Michigan Board of
Liquor Control and what they are trying to do is determine
the mechanical elements of enforcing the law.
Now, it doesn't seem to me it has to go back to
the legislature for this organization who is charged by the
law to enforce it and they are determining things of whether
the manufacturer will originate the deposit or the distribute
will originate the deposit.
That is somewhat up in the air right now. So
there are certain mechanics of the law that are still to be
decided. I'm frankly not aware of any real effort to change
it significantly that it would not be a test market for what
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I refer to here and my political sense tells me that anyone
who thinks they might be able to do that before a law goes
into effect, that would seem a strange political force.
INTERIOR: Just out of curiosity, in Oregon, where
does the deposit originate?
MR. OWINGS: It originates with the distributor.
INTERIOR: The distributor. Two other questions.
In terms of the can manufacturers, what would their feeling
be, assuming that there was national legislation of this
type, as to whether this legislation should or could contain
a ban on pull tabs — that is, removable pull tabs, would
this be a major problem?
MR. OWINGS: The removable pull tabs are slowly
leaving the market. The only reason it's slowly, really, is
because it takes so much time to convert very expensive
equipment which our total industry is doing.
As each month goes by, there are more non-detach
pull tabs being shipped by the group that I represent. The
very success of the easy opening package has been its own
demise because people rudely littered those pull tabs and
society today will not tolerate that nor should they and
therefore it had to be replaced and it is being replaced.
INTERIOR: Okay, one last question. A question
has been discussed amongst various people on this senior
policy advisory committee as to whether a national law if it
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were implemented, should be preemptive of state laws.
How would your organization or how would you feel
about this question?
MR. OWINGS: Well, I think we're asking which
devil is the worse devil —
INTERIOR: Well, that's still a fair question —
MR. OWINGS: And it would appear to me that you
can make a case for preemption in one case but then I heard
a gentleman here this morning say that if you do a national
law, it will never fit all situations in all 50 states and
he's got as valid a point as the other and you can debate
both of those right down the line.
In other words, you can give me 20 minutes, I
believe, and I could argue it either way rather convincingly
I guess I come down to — I don't know which of those may be
the best.
INTERIOR: Thank you.
THE MODERATOR: All right. Thank you, Mr. Owings.
Our next presentation will be made by Mr. Dennis
Devaney of the Food Marketing Institute.
Mr. Devaney.
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STATEMENT OF DENNIS M. DEVANEY
FOOD MARKETING INSTITUTE
MR. DEVANEY: Madame Chairman and members of the
Committee, I am Dennis Devaney, Counsel for the Food
Marketing Institute — for short, FMI.
FMI is a nonprofit trade organization whose over
900 members include both retailers and wholesalers. Among
those members are retailers and wholesalers ranging in size
from the very smallest to the largest, including independent
grocers, chains and both voluntary and cooperative whole-
salers.
Approximately 20 to 25 percent of our membership
operate only one store; another 48 percent of the membership
operate between 2 and 10 stores.
Food Marketing Institute is also a member of the
Labor Management Committee for Solid Waste Policy and in
that respect, we are privileged to associate ourselves with
the remarks of Mr. Howard Chester, who is Chairman of the
Labor Management coalition and will be appearing before the
Committee later on this afternoon.
We appreciate the opportunity to appear today to
give a brief overview of our position. We intend to file
detailed comments on the questions circulated by Deputy
Administrator Blum within the comment period provided.
I believe the tone of my remarks can best be
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stated by borrowing from a political slogan which comes out
of the Colorado referendum campaign in which the voters of
Colorado, a state which most of us would concede appears to
be environmentally conscious — rejected a forced deposit
amendment by better than 2 to 1 margin.
The phrase that captures the essence of my remarks
roday is "Right problem; wrong solution."
As the Committee is well aware, the history of
this issue in the Congress and throughout the state
legislatures is a long one and I think it's fair to say
that the rhetoric on both sides — both the proponents and
the opponents of deposit legislation has sometimes been
excessive.
We, at the Food Marketing Institute, which is a
new organization that grew out of the merger of the Super-
market Institute and the National Association of Food Chains
in order to create a more unified voice to the retail and
wholesale grocer here in Washington and the state capitols,
view ourselves as purchasing agents for our customers. In
fact, that's a point that's in our bylaws and in that regard
I think many of you are probably aware in this Washington
area of what*sometimes been called the Consumer Bill of
Rights which many of our companies have adopted.
One of the most important of the principles
articulated is the consumers' right to freedom of choice in
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the marketplace. I think our membership is also in a
unique position in that we have done business in the two
states — Oregon and Vermont — which have already enacted
the deposit laws.
In a timely article which appeared in this month's
Progressive Grocer Magazine and which was alluded to by an
earlier speaker, an extensive analysis of the experience of
retailers in the States of Oregon and Vermont is presented.
I am enclosing as an appendix to my testimony a
copy of the Progressive Grocer article and will send directly
to the Resource Conservation Committee members and the Senior
Policy Group reprints of this article.
It represents what I think is the best current
data which is around and can tell you what is really
happening from the perspective of people who live and do
business in a deposit regime.
The basic conclusions of the Progressive Grocer
article were developed through visits to supermarkets in
Oregon and Vermont, questionnaires to 127 store owners and
operators and extensive interviews with business, environ-
mental and government leaders familiar with the issue.
I don't want to or intend to detail an analysis of
the article which I submitted but I would like to highlight
some of the conclusions which are important to our customers
and therefore important to us.
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Prices of soft drinks and beer in bottle bill
states are as high or higher than in neighboring states
and as a parenthetical, I'll note that proponents of this
legislation generally suggest that a cheaper product will be
one of the end results of deposit legislation.
I should at this point maybe take a brief minute
aside to say that I've always argued to my environmental
friends who are for this legislation that if you want to be
fair about the arguments, it shouldn't be cheaper package
today — deposit law — cheaper package tomorrow.
It should be — the costs are going to be more,
maybe not substantially more but there is going to be a cost
if the public and the citizens are willing to pay that higher
cost for environmental benefits — let's have the issue
decided on that basis and not on the fact that there's going
to be a cheaper package in the future.
Second point, there has been a decrease in
beverage business. Cans and non-refillable bottles especial!
have suffered and private label sales have declined. We
also face some special problems in the retail business.
The cluttered front store problem. Three out of
four of our stores in the states where the deposit law is in
effect, accept returnables at the front end as a service to
their customers, yet the median amount of space available
for this is only 32 square feet.
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This leads to another problem which has developed
and that's the sanitation problem. Sanitation clean-up and
pickup is more intense and expensive under forced deposit
conditions.
The unwashed containers smell, partially filled
containers spill, bottles break and some operators have
found that they have to increase the frequency of the
extermination services.
Additionally, labor costs have increased and
finally, addition storage space has been necessary in back
room areas. A median in the Progressive Grocers study was
250 square feet of back room space is devoted to returnables
One quarter of the retailers who responded find it
necessary to augment this with 200 square feet of space
outside the store. Obviously, that entails additional
capital expenditure and for the one store operator, that's
an impact that's going to be felt substantially.
In summary, as the article concludes, the forced
deposit approach reduces consumer choice, does cause
disruption for retailers and wholesalers in the marketplace
and represents a cost to the consumer in the long run.
In order for us to get a better handle from a
scientific perspective on what actual consumer attitudes and
response to this type of legislation, we have commissioned
Prof. Philip Kuehl at the University of Maryland to do a
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consumer attitude study within the metro Washington area. j
As you know, Fairfax County, Virginia recentl/ |
adopted a soft drinks only ordinance. I think Commissioner j
Magazine will be here later on this afternoon. In Montgomery!
County, Maryland, a deposit ordinance is scheduled to be ;
implemented on January 1, 1978.
In addition, the County's proposed tax on one-way
containers at the rate of 2
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INTERIOR: You indicated in your testimony that
sales of private labeled soft drink beverages have declined
in Oregon and Vermont. Can you tell us why?
MR. DEVANEY: That's correct. They have declined
and I think one of the reasons is that the bulk of private
label products had been in cans and especially in Oregon,
immediately after the law — as you have seen, I'm sure
these figures have come out — the can was virtually knocked
out of that market.
In Vermont, where you have the one-tier system,
the can was not impacted as substantially but it did have
some impact on private labels sales in the Vermont area also.
INTERIOR: The can, I have been told at least, is
coming back in Oregon —
MR. DEVANEY: I think that's a fair assessment.
I think that's correct.
INTERIOR: Are private label soft drinks coming
back in proportion?
MR. DEVANEY: I can't say that in proportion. I
don't think the figures are accurate enough to break that
out. I would assume that we might see a little bit of it
come back in that area as the can makes its approach back
into the Oregon market.
INTERIOR: Assuming that the committee recommends
deposit legislation to Congress, where do you think the
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deposit ought to be placed, at the filler brewer, at the
bottler, for example, or as a second choice at the
distributor level or as a third choice at the retailer level?
MR. DEVANEY: I guess we would have a little
different perspective on that than some of the other groups
obviously coining from where we are in the chain of distribu-
tion.
I think that if there was to be a deposit, we
would be interested in seeing that a handling charge would
be included no matter where you place the deposit along the
distribution chain in order to help the retailer defray some
of the costs which have been added on by the added labor, the
space requirements, the things I talked about.
As you know, in Vermont they have a one cent
handling charge. I think if there was to be a national law,
we probably would — if the committee recommends that -- we
would assume that the committee should also recommend that
it be preempted and that for consistency sake, there should
be one type of system which we have to deal with across the
country.
Obviously, for companies that do business in a
number of states, it's important that they not be faced with
numerous requirements and of course, the trend that we're
seeing right now, tends to go in that direction.
With Michigan's law, different in the deposit
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levels than Oregon's which has the two-tier system, Vermont
with the one-tier system. As far as at the distribution or
the manufacturing level. I think that's your choice.
INTERIOR: Okay, one last question. Would you
have any comment on what you feel, assuming that the
committee were to recommend legislation, would you feel that
the level of the deposit ought to be and whether it ought to
be a two-tier or a one-tier system?
MR. DEVANEY: I guess first of all, I should make
it clear that we don't believe that the committee should
recommend the deposit —
INTERIOR: I understand that.
MR. DEVANEY': But again, as someone mentioned, if
it's the choice of the devils, I think that you would want
to see a one-tier system — although there will be some
constriction in products available to the consumer — it
seems to me that some of the problems you had with the Oregon
law because of the preference for the refillable bottle are
avoided.
Let me pick up something that you asked me earlier
— you talked about some special interest groups in Michigan
tinkering with the evolution of the referendum passed. I
think it's interesting that Representative John Dall (ph.)
who was one of the prime architects in the legislature of
deposit proposals has now introduced a bill to require
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refillable containers.
Now if that's the long range goal, I think that
ought to be again up front so I don't know if we can classify
Representative Dall's as a special interest leader but he
certainly has a piece of legislation that's already been
introduced which does tend to adjust the formula that was
developed by the voters in November.
Can I make one other comment? Something was raised
by one of our staff people. I think Congressman Jeffords
was here this morning and he mentioned that the Vermont
Retailers Association supported the deposit bill.
What I would like to say to that is obviously, we
hope to be good corporate citizens and Vermont has had a
deposit law for a number of years so therefore our companies
and our members would try and live within that system.
I talked to Jim Holmes who is the President of the
Vermont Retailers only a few minutes ago to check what his
feelings are about that and he said we're not thrilled with
it but since it's the law, we're trying to work with it.
He made the point that if there is to be such a
law, it would seem to be more appropriate to be on a national
level and that perhaps there could be consideration for a
handling charge.
I think it's important you know that. I also thin*
it's probably significant for you to know that Mr. Holmes
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doesn't represent all the retailers that do business in
Vermont and a number of companies would not adhere to that
position. In fact, they would reflect the statement that
I've made to the committee today, that the deposit proposal
is not the way to go.
I understand also, some people have talked about
assessments or product charges. It seems to me that's more
appropriate for your next forum. I'd like to comment on
that at that time. Our inclination would be to support that
kind of legislation over a deposit legislation.
THE MODERATOR: Thank you, Mr. Devaney.
MR. DEVANEY: Thank you.
THE MODERATOR: Now may we hear, please, from Ms.
Sue Baldyga, the Rhode Island Solid Waste Management
Corporation.
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STATEMENT OF SUSAN J. BALDYGA
RHODE ISLAND SOLID WASTE MANAGEMENT 'CORPORATION
MS. BALDYGA: I represent both the Rhode Island
Solid Haste Management Corporation, a quasi-public
corporation aiding the State of Rhode Island in the
development of a statewide solid waste management plan and
the Rhode Island Coalition for Eottle Bill, a group of
citizens working for beverage container deposit legislation
for Rhode Island.
It is our opinion that federal legislation
mandating beverage container deposits superceding state laws
is necessary. We support a simple, straightforward law that
would end wasteful use of energy and material, reduce
unsigntly litter and help relieve state and local governments
of the burdens of controlling that litter.
As we have heard many times today, the need for
this legislation is obvious and the time for this is already
past by making immediate action necessary.
The solid waste management crisis in this country
is of such proportion that no one method of waste control
can be effective alone. We are of the opinion that beverage
container deposit legislation cannot be the sole answer to
the problems of an ever-increasing waste stream and
diminishing disposal alternatives.
However, a bottle bill is the most visible and
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easily understood concept of waste reduction and the
responsibility for recycling is shared among consumers,
retailers and manufacturers.
A bottle bill is one facet of a comprehensive
solid waste management plan and cannot be considered an
alternative to high technology resource recovery but should
be a companion to such efforts.
Even packaging legislation is compatible with
deposit legislation when viewed as part of a solid waste
disposal and resource recovery plan, a problem with many
roots needs a solution with many aspects.
Rhode Island feels that a federal beverage
container deposit law should be as uncomplicated as possible
in order to ensure compliance. The deposit should be no lest
than 5C per container and should be uniform for all containei
This is what Rhode Island is now proposing to the state
legislature.
The deposit should be high enough to assure high
rates of return. All detachable flip top cans should be
banned and we feel that no standardization of containers is
necessary.
We feel that in the Rhode Island lav; that the
deposit should originate at the retail level and a retailer
should be required to accept returns on only the types of
bottles — of containers that he sells.
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;te feel that redemption centers — at least in
our state -- other than the retail establishments would not
be necessary and would only be an added expense.
The benefits of a deposit law are many and most of
them have been mentioned here before. The environment would
benefit directly through the reduction of litter and
something that Rhode Island is concerned about is that it
would require less landfill space.
Indirectly, it would reduce the need for virgin
materials and save much needed energy sources for other uses.
A bottle bill would also aid in the development of
a conservation ethic among consumers that would affect the
consumption and conservation of materials in the future, an
aim that President Carter has placed high on his list of
priorities in dealing with the present energy crisis.
There are economic disadvantages that must be
acknowledged. Retailers will undoubtedly incur expenses
for the storage and handling of the returnable containers.
Jobs will be lost in the container industry but mandatory
deposit legislation will create new jobs for the handling of
the returnable bottles.
It has been proven in Oregon and Vermont that the
use of returnable containers eventually lowers the retail
price of that beverage but the costs will drop only if those
industries involved in the manufacture and bottling process
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allow the market to operate-
There is a fear on our part that industry will not
cooperate with the government to ensure the success of this
type of program. It should therefore be a priority of the
committee to actively solicit the help and support of both
business and labor in order to develop a fair and workable
returnable container program.
Finally, we stress the immediate need for such
legislation and believe that implementation should take
place no later than 13 months after enactment. Guidelines
on implementation, management and enforcement should be
issued at this time.
Thank you.
THE MODERATOR: Thank you very much.
Any questions, please?
Very good. Thank you, Ms. Baldyga.
Is anyone here to represent the Public Interest
Economic Center?
Very well, we'll continue on then to call on Miss
Pamela Deuel of Environmental Action, Inc.
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STATEMENT OF PAMELA DEUEL
ENVIRONMENTAL ACTION, INC.
MS. DELEL: Thank you very much. I am Pamela
Deuel and I work at Environmental Action, a national citizens
organization concerned with — we follow a number of issues
and the solid waste problem has been on our agenda for
several years.
Today, however, I speak not only for Environmental
Action but for some 27 other organizations — do you by any
ciiance have that list before you? I hope they had distributeja
that to you.
Well, I'll just point out a few of the organization
in addition to the Environmental groups who are now in
support of the concept of a uniform deposit on soft drink
and beer bottles and cans.
These include the American Association of Universit^y
Women; the American Fishery Society; the National Air
Conservation Committee of the National Lung Association; the
Americans for Democratic Action; the Center for Science in
the Public Interest; Environmentalists for Full Employment --
which I would like to underscore -- the National Association
of Social Workers which has a strong concern with the
problems of urban America; at the same time, the National
Grange supports the measure because tney have a real
agricultural problem and they have found that this is one
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very effective way of dealing with some of their problems.
The Public Interest Economic Center, as you know,
who were unable to send a speaker today, and the Tax Refund
Research Group and then the many national environmental
organizations located here in town.
I guess 1 would like to respond -- instead of
delivering my prepared statement which I have and which does
respond, in fact, to the questions in the staff background
paper No. 3, regarding the design of the legislation --
although I will be glad to answer your questions and I will
submit these statements for the record.
I'd like to make a few points which I don't feel
have been adequately clarified. To begin with,we"re not
talking about a can ban and I want to make sure that members
of the committee understand this.
Mr. Mudd from the National Soft Drink Association
referred to the fact that environmentalists are interested
in a system which promotes or which requires only refillable
bottles and I think we realize as do many of you, that we
have cans in the marketplace, they have succeeded in gaining ;
a very substantial portion of the beverage container — of
the market shares.
So what we are interested in is coming up with a
system that is going to be effective in recycling those cansi
as well as a system that will promote the refillable bottles.)
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Last year, some 70 billion throwaways were made
and one-fourth of those do end up as litter and that
problem exists and a substantial solid waste problem exists,
too, and we feel that the deposit system would be the most
effective way of getting most of these containers out of the
solid waste stream.
They comprise some 8-1/2 percent of the manufacture^
goods portion of the municipal solid waste stream and that
is the largest and most easily isolatable portion of the
solid waste strear.i.
There have been comments made this morning that
we should be trying to come up with more of a comprehensive
approach. Perhaps we should be looking at a disposal charge.
Perhaps we should be supporting the resource recovery system.
Well, we are not opposed to that and in fact, in
the long tern, both of those may be real solutions to our
waste problem but resource recovery systems are still in the
experimental phase. Disposal charge is still very much a
concept that is being born* and is not at all near to being
enacted.
The deposit law, on the other hand, has been
proven to be effective both in Oregon and Vermont and will
soon know in Maine which starts its deposit law in January
and in Michigan, next November, plus the fact that everybody
returned bottles in the past and we know how the system
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136
works and it's not as though you're trying to create an
entirely new manufacturing process.
It would require shifts within the industry, of
course, but nevertheless, we know it can work.
Just to underline my statement about the cans, I
was reading my issue of Beverage Industry which is a magazine
affecting the industry and on the back page is an advertise-
ment by the Committee of Tin Mill Products Producers and
it's a full-page ad and it encourages the recycling of
steel cans.
So unless they don't believe what they're
advertising on the back of these magazines, I think that
there is real option for the recycling of the steel as well
as the aluminum cans.
Another question that I have had some problem with
this morning is the consumer choice. A number of people
have said that consumers prefer the throwaway. This is why
in fact the market has three-quarters throwaways and only
one-quarter refillable bottles.
But actually, the decision about the type of
container that is to be put on the shelves of markets is
made by the grocer himself. He is the one who tells his
distributor, please send a truck to me next week that has
75 percent cans or throwaway bottles because this is what I
prefer and maybe 25 percent refillable bottles.
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So I don't think that the argument that the
consumers are voluntarily selecting the convenience of the
throwaway really bears weight.
I would also like to point out that the question
— the fact that cans disappeared from the Oregon market
when the law went into effect five years ago is because the
Oregon retailers independently decided to do so.
They said, well, this is a deposit law, we don't
know how it's going to work. Let's play it safe and let's
sell only refillable bottles. So the decision to remove all
throwaways was made.
Therefore, they started the law with 100 percent
refillable bottle system and no throwaways and gradually,
the cans are gaining a foot in the marketplace. I think
it's now about 12 to 15 percent and it is gradually
increasing because in fact, there is a need for special uses
and certain people simply do prefer cans.
But please don't be misled. And then there are
grocers who will then also tell you that the system works
very well. An independent small grocer in Oregon named
John Piascentini (ph.) has some 90 markets and he's very
happy with the law and he's finding that he has not had to
add employees in order to handle the beverages even though
he has voluntarily agreed to take — containers not only of
the kind that he sells in the store but also any other sort
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of container and he finds -that he can accommodate this in
the slack hours by the employees that he has in his markets
which are quite small and which do not have a lot of space.
So again, I want to underline the — this is a
political issue. There are different points of views and
you can find people who are very pleased with the legislatior
and in Vermont, handling centers have sprung up voluntarily.
This is a demonstration of the free enterprise
system. There are some 50 redemption centers in Vermont
and they handle the used containers and they carry the
responsibility of getting them back for recycling or
refilling.
So this is another way in addition to having —
return to the market — of having the containers handled.
In the case of Yosemite, people are pointing out the fact
that the return rate in Yosemite is 70 or 75 percent and
that that's not a very good indication of the fact that the
people like the idea.
Well, I'd like to point out that the average
visit to Yosemite Valley is two and a half days. It's a
national park. People go their for a vacation. So they
go there, they don't stay very long and in fact, the fact
that people have succeeded in returning seven out of ten
containers with very limited public education — I think
attests to the fact that this is an issue that people can
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189
understand very easily even though they are faced with a
problem with what do I do with a can — I never had a
deposit on a can before and I don't quite know how to deal
with this.
Most of the containers sold in Yosemite are cans
and there are in fact people who are managing to survive in
Yosemite by picking up the containers. Therefore, I want
you to be aware of the point that 70 percent is not good.
It's in fact very good because there is not just
much time for people to find the recycling centers and to
return the containers.
I'd be glad to answer your questions — that might
be a better way to proceed than my continuing on at this
point.
THE MODERATOR: Ms. Brown or anyone else have any
questions?
VOICE: You pointed out that in Oregon, the cans
got removed from the shelves by the retailers so the
purchasers had no choice but they are making their way back
onto the shelves?
MS. DEUEL: That's right.
VOICE: Now, how do you know that they won't make
their way back to the shelves to such an extent that they
sell 100 percent cans and further, how do you know if you
had national legislation that the retailers wouldn't take
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the same attitude, wipe out the cans and then because of
consumer preference, the cans wipe out the bottles and so
that you pay twice for the same benefits that may or may not
be substantial?
MS. DEUEL: Well, Oregon was the first state to
adopt the law and I think they were extremely cautious and
I think there's enough evidence now that cans can be viable,
studies suggest this.
A recent EPA draft report now projects that cans
will retain approximately the same market share. My opinion
of what's going to happen under a national law is that you
will — what will result is an exaggeration of the market
situation in each state.
So for instance, you go to a New England state
which has primarily throwaways — has primarily cans and you
will see a recycling system developing. You gotto the south
which still has predominantly refillable bottles and you
will see a shift towards increasing volumes of refillable
bottles.
I don't think this problem in Oregon is going to
repeat itself. I think they've learned.
VOICE: Nevertheless, you just don't know.
MS. DEUEL: Sorry?
VOICE: Neverless, you simply don't know how
people will act — not even the retailers.
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1 MS. DEUEL: And that's one of the big questions
2 and one of the controversies over which opponents and
3 proponents constantly have a tug of war but as I say, with
4 the steel producers, with the aluminum can producers now
5 touting recycling systems and with resource recovery systems
6 becoming developed and with techniques improving, I think
7 that the probability of cans being recycled continues to
8 improve and there's a real need to get that metal back.
9 I know in the case of aluminum, the aluminum
10 companies want their aluminum back.
11 THE MODERATOR:; Will the gentleman from the
12 committee please — who was just speaking, identify himself?
13 VOICE: My name is Louis Santone, Department of
14 Commerce.
15 THE MODERATOR: Thank you.
16 VOICE: My name is Bob Kaplan, I'm with Interior.
17 When the cans are collected in Oregon and Vermont, what
18 happens to them, where do they eventually go?
19 MS. DEUEL: The recycling centers which collect
20 the cans — I don't know about Vermont but I think what
21 happens is they're shipped back down to the producers who
22 then reuse them in making of the new containers. I can't
23 answer that in detail, although I can find out.
24 MR. KAPLAN: I'd appreciate knowing because one
25 of the questions that I have is that I wonder what guarantee:
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that the cans will go from the grocer back to recycling and
therefore decrease the waste stream as opposed to going from
the grocer to the dump.
The second question and the last one I have, you
indicated that resource recovery plants were still
experimental. Could you tell me what you mean by
experimental?
MS. DEUEL: Well, it's the official opinion of the
Environmental Action that resource recovery plants are still
very much in the experimental phase. I think the experience
of the Baltimore — Plant is an example of the problems
they're having was trying to draw energy from solid waste
and a number of other types of resource recovery techniques
simply have not become very effective.
There are a couple such as water well incineration
which are working but right now, its still — I think a
very large inw4tment that has a very high risk attached to
it and it's not one that communities should waltz into until
they've seen the technology that are proven.
MR. KAPLAN: Would you consider Ames, Iowa or
Milwaukee or New Orleans or Baltimore County as opposed to
Baltimore City as experimental — as still in trouble in the
same vein that you consider Baltimore City in trouble?
MS. DEUEL: Well, those are working but there are
others that can be pointed to that are not having the same
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1 ease of operation.
2 THE MODERATORS Would the gentleman from the
3 committee representing the Department of Treasury or the
4 Treasury Department —
5 VOICE: Yes, two quick questions. I'm Bill
6 Steiger from Treasury. There were comments previous that
7 we should extend the deposit to fruit juice cans and other
8 cans as well as to beverages. Is that what your —
9 MS. DEUEL: No, I spoke with the representative
10 from the Sierra Club and that was in error. In fact, Sierra
11 Club supports a deposit on soft drink and beer to begin with
12 at this point.
13 I don't think they would insist upon mineral water
14 and the fruit juices was a mistake.
IS VOICE: Or vegetable jars or —
16 MS. DEUEL: That's correct, that was a mistake.
17 VOICE: Now, there was matter of discrimination
18 in equity that some people might take issue with. How would
19 you handle that?
20 MS. DEUEL: Well, again, I point to the need for
21 a system that is going to deal with the solid waste problem
22 effectively and the deposit law can deal with some 8 or 9
23 percent of it right now and I like the idea of coming up with
24 a solution that will manage all of our waste but I would
25 rather sit down with somebody and come up with a compromise
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which in some ways the bottle bill is.
— To deal with — to part of the solid waste
stream. Communities are faced with real crunches in terms
of landfill shortages and rising costs so I view this as a
first step but I don't feel it is incompatible with a
disposal charge, for example.
VOICE: But you don't think it should be extended
to food stuff?
MS. DEUEL: No, we do not.
VOICE: Even though it's the same containers?
MS. DEUEL: The systems do. not exist for refilling
or recycling at this time. Perhaps eventually, we may find
that recycling the food cans is viable.
VOICE: Thank you.
THE MODERATOR: Thank you, Ms. Deuel.
MS. DEUEL: Thank you.
THE MODERATOR: Our next representative of the
public is of all things a private citizen —
(Laughter.)
THE MODERATOR: Prom Oregon, Ms. Betsy Classman.
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STATEMENT OF BETSY GLASSMAN - PRIVATE CITIZEN
MS. GLASSMAN: Hello. Thank you for the opportunit
of having me speak today. I am a native of Washington, D.C.
and I recently returned from Oregon where I lived for three
and a half years and where I've/witnessed and participated
in the workings of the Oregon Bottle Bill.
The containers returned for deposit under this law
include glass bottles and aluminum cans for beer and soft
drinks. Pull tab cans are banned under the law. The system
in Oregon is the same that was used nationwide when I was a
child.
A consumer buying such beverages pays a deposit
for each container at the grocery store and the deposit is
returned when the container is returned. The deposit is an
excellent incentive for consumers to return bottles and cans
Even a person unaware or unconcerned about sound
environmental practices is aware of his own economics. Most
people in Oregon do return their containers. An Oregon
State University study showed that in the first two years
after the bottle bill took effect, beer and soft drink
litter was reduced 83 percent.
But one who visits a bottle bill state really does
not need to read a statistic to know that roadside and trail
litter is astoundingly less in these states. The visual
impact of this litter upon leavinoj a state operating under
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a bottle bill is overpowering.
In a roadside study by the Oregon Environmental
Council, 37 cans and bottles littered Oregon per mile as
opposed to 357 containers per mile in Washington State.
In an age of resource, energy and job shortages,
there can be no reason why we cannot make the first step
toward a recycling economy nationwide to replace the
throwaway economy we now live in.
Studies in Oregon show that while there was a
shift in employment from some segments to others, there was
a net gain in jobs and labor income as a result of the
bottle bill.
Annual energy savings equal 1.4 BTU's which is
enough to provide for the annual heating needs of 50,000
Oregonians. It has been found that a glass beverage containe
used ten times consumes less than a third the energy needed
to make ten non-returnable bottles.
Recycled aluminum cans save 78 percent of the
energy required to make cans from raw materials.
A national bottle bill will help reverse our
throwaway living. It will be a much needed start to a
recycling economy. But why stop at recycling only soft
drink and beer containers? Why not eventually include all
glass and aluminum containers under a deposit law?
In Oregon, discussion is now underway to include
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wine bottles, for example, for deposit. It is my hope that
eventually we will recycle under law every material we can
possibly recycle and if the material is difficult or
impossible to recycle, we should reexamine its worth as
packaging or as a product.
The following is a personal story about waste in
our country. I'm a photographer. In Oregon, I went to a
local hardware store to see if I could pick up the extra
cardboard boxes which came in there.
I wanted to cut these up and use the cardboard as
backing for my frames. The store's manager was most agreeabl
to my request, for in fact he said, we have so many boxes,
we have to burn a large number of them every week.
These boxes were extremely strong for in them was
shipped heavy irrigation equipment. One box I got at this
store has seen over two years of service with me, making
numerous trips to craft fairs and more recently, making a
trip cross-country from Oregon in a moving van. This box
is still in excellent condition.
Here again we see an example of our throwaway
system. These boxes burned after one time use are trees,
homes of multitudes of wild animals and birds and caretakers
of soil, watersheds and even the human spirit.
Shall we continue to use a product once when it
can be used a hundred times and shall we continue to rape
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our land for resources when we have our resources here
already to be used again and again?
What can the concerned individual or household do
to recycle containers and other materials in a state where
there is no bottle bill?
First, place three or four trash cans, bags or
boxes on the kitchen floor instead of one. One container is
for metal, another for glass, one for paper and another for
plastics.
All containers must be clean before they are
dropped into the proper receptacle. When the bags or boxes
are filled, store them until you have a carload to take to
your local recycling center.
But here you will no doubt run into a problem;
there are not enough recycling centers. The stunning fact
is that in D.C., there are no recycling centers. This fact
is very interesting considering that in 1974, a bottle bill
adopted by the D.C. City Council was vetoed by the mayor.
In heavily populated Montgomery County, the county
does run one small recycling section near the landfill
operation in Rockville. There are also a few private firms
which pay money for materials the consumer brings in to be
recycled.
But these few efforts are small and relatively
unknown to the general population of the county and they are
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typical of the relative lack of recycling centers in
America as a whole.
When I returned to Washington from Oregon, I
talked to my new household about separating and recycling
so-called garbage. They all agreed it was a good suggestion.
But on discovering that the closest recycling center was the
one in Rockville, 15 miles from our Bethesda home, household
enthusiasm and incentive to recycle was severely diminished.
It is obviously uneconomical, even unecological in
terms of gas and oil to travel so far for voluntary
recycling and for working people, such a trip is — to say
the least — inconvenient.
We do not have land, resources or energy to waste.
Our current landfills are filling up. Presently garbage
amounts to 1-1/2 billion pounds daily in the U.S. Top
agricultural and wetlands are used for landfill.
The factors that make land bad for farming also
make it undesirable for landfill. There are those of us
who support enlargement of our wilderness system. Do these
samp; people separate and recycle garbage? Do you?
My feeling is that if more people actually
performed this very important personal action, there would
be more conveniently located recycling centers and there
would be nationwide deposit legislation.
At the same time, such individual action will
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insure that we will have extensive wilderness for us and
our children to experience. For what will America the
Beautiful look like in the years to come if our throwaway
living continues?
I envision more dumps, more cans and bottles along
the roads and trails and everywhere the earth mined, logged
and destroyed. This will affect you directly when you
discover that your favorite city, state or national park is
now an official dump.
Why wait until such a time when it's too late?
A national bottle bill would be an excellent beginning to
national recycling efforts and legislation. If the earth is
destroyed, we, too, are destroyed and if virgin wilderness
land is mined to meet our insatiable needs, we ought to at
least recycle the products until they can be used no more,
or that land and the creatures that inhabit it, will be
wasted, just as its materials have been wasted.
Man's vanity has led him to believe that everything
on this earth is for his use alone. We have too often
neglected to look at our world as a finite planet with
finite resources.
We can continue in this way, mining, poisoning,
clear-cutting and destroying and in the end, we will die
along with the plant Earth too heavily burdened by our foul
mess to survive. We will also set a precedent for
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destruction on other worlds as well.
So the time is here and the time is now to live
with the Earth as it lives with us, circularly. So let's
pass a national bottle bill for it's a start.
THE MODERATOR: Thank you, Ms. Classman.
Any questions from the committee?
Thank you very much.
Our next speaker will be Mr. Howard Chester of
the Stone, Glass and Clay Committee of the AFL-CIO.
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STATEMENT OF HOWARD CHESTER
STONE, GLASS AND CLAY COMMITTEE, AFL-CIO
MR. CHESTER: Thank you, Mr. Moderator,
Chairman and members of the panel.
My name is Howard Chester and I am the Executive
Secretary to the Stone , Glass and Clay Committee —
coordinating committee which is a group of seven internationa
unions and all affiliated with the AFL-CIO.
Five of the unions represent workers involved in
the manufacture of beverage containers , namely the Aluminum
Workers International Union, the American Flint Glass Workers
Union, the Glass Bottle Blowers Association of the United
States and Canada, the United Glass and Ceramic Workers of
North America and United Steelworkers of America.
As a matter of fact, at this point, I'd like to
call the panel's attention to the fact that the AFL-CIO in
San Francisco in 1975 passed a rather extensive resolution
on solid waste and to address just the one whereas that you
are concerned with here today on beverage containers, it
states , "Whereas the AFL-CIO opposes legislation at any
government level which seeks to resolve this problem by
restricting the sale or use of non-returnable containers
regardless of the unemployment and other negative consequencejs
And of course, we join and support that resolution
even though that is one — only one facet of the entire
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resolution. Other facets deal with the solid waste problem
and resource recovery and so forth.
Our interests here today will be confined to
several conclusions that have been drawn from several
beverage container studies especially with regard to
employment.
All the studies that we have examined very
importantly acknowledge that national deposit legislation
will result in tremendous job losses in bottle and can
manufacturing.
Any projected job gains would be in retail and
distribution causing a shift from high-skilled, high paying
jobs to Relatively unskilled, low paying jobs. We maintain
that these so-called job gains are merely job trade offs
since any increase in the handling end would be made at the
expense of the manufacturing sector.
We also question whether there will be an actual
increase in jobs because some studies indicate that
additional work hours required for handling will not
necessarily result in the hire of additional workers,
placing more work on those who are then employed.
But I'd like to take a moment to take a special
look at one of the manufacturing workers, whether he work in
steel, aluminum, glass — the buildup that he has made over
his working life, his age — he may be from 40 to 60 years
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old, he's built up seniority in his occupation, he's built
up a pension future, insurances, and he's established himself
in the community and I would like to say that I think I would
find it very difficult — and I'm sure that the members of
the panel as well as anyone in here would find it difficult
to go to that worker and tell him that his job has been
displaced due to the fact that we are about to pass or
are attempting to pass federal legislation to place a
deposit on the beverage container.
To further support some of the job loss that we've
talked about, the Department of Commerce conducted a study
on the impacts of national beverage container legislation
and this study was put together in 1975 and it estimated a
job loss of 82,000 people split between the glass and the
can manufacture, both in — in can manufacture, whether
steel or whether aluminum.
It showed a job gain of roughly 95,000 to 115,000
in retail distribution beverage production so there was a
net gain of between 13,000 and 33,000 jobs in this study.
However, the study did point out that can and bottle
manufacturing will be seriously affected in terms of
unemployment and states that jobs gained are generally
lower paying to the extent that the average hourly wage
rate of each individual added in processing, distribution
and sales is only 30 percent of that of each individual
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1 displaced in metals, glass and container fabrication.
2 They also mentioned in their study that the
3 adverse economic impacts such as job losses are a reason
4 that Commerce was not recommending enactment of national
5 container legislation.
6 In conclusion, I would like to say that these
7 studies do show tremendous job losses in manufacturing of
8 beverage containers and we do not believe in the trade off
9 situation of creating more jobs in retail or distribution.
10 We are concerned about the manufacturing jobs of
11 steelworkers, aluminum workers and glass workers and I think
12 Congressman Hugh^jput it quite well this morning — or just
13 before we adjourned for lunch — with 14 to 17,000 workers
14 — glass workers in the State of New Jersey, he is not ready
15 nor are we to adopt any kind of legislation that would seek
16 to place a deposit — a mandatory deposit on the beverage
17 container.
18 Another question that was addressed here this
19 morning — it was addressed to Congressman Jeffords with
20 respect to dislocation and adjustment — if the adjustment
21 that was talked about is anything at all like adjustment
22 assistance involved with the Trade Act, we would definitely
23 be against any kind of adjustment of that type since it's
24 a band-aid type operation and we do not think that a job
25 can be replaced by adjustment assistance.
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In the case of the Trade Act, adjustment assistance
is of one year duration and after that, the worker is more
or less on his own.
So again, I would like to place our seven unions
on record as opposed to deposits on beverage containers and
Mr, Moderator, with your permission, I would like to submit
for the record the resolution in full passed by the AFL-CIO,
within which this one whereas I read.
Thank you very much and if you have any questions,
I'll be happy to try to answer them.
(The statement follows.)
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THE MODERATOR: Are there any questions of Mr.
Chester?
MR. CHESTER: If there are no questions, I would
like to say that Mr. O'Shinsky had to leave, he was called
away and he asked me if I would let the panel know that he
will be submitting a statement on behalf of the United
Steel Workers of America. So Mr. O'Shinsky is not here.
THE MODERATOR: Thank you, Mr. Chester.
MR. CHESTER: Your welcome.
THE MODERATOR: All right. Our next speaker is
scheduled to be Mr. George Marienthal of the Department of
Defense.
Mr. Marienthal.
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STATEMENT OF DONALD ROBINSON
DEPARTMENT OF DEFENSE
MR. ROBINSON: Mr. Moderator, ladies and gentlemen,
my name is Donald J. Robinson and I am a Special Assistant
to Mr. George MarienthaJ.,the Deputy Assistant Secretary of
Defense who is responsible for three major functions; energy,
environmental protection and occupational safety and health..
Solid waste management and resource recovery
activities are directed, logically, in Mr. Marienthal's
office of environmental quality and hence so are the beverage
container guidelines.
To review briefly the Solid Waste Disposal Act of
1965, as amended by the Resource Recovery Act of 1970, under
Section 209, required the Administrator of the Environmental
Protection Agency to publish guidelines for solid waste
recovery.
On June 5, 1974, the Natural Resources Defense
Council sued the Environmental Protection Agency for failure
to issue those guidelines. The NRDC suit was settled out of
court and one of the conditions of the agreement for settle-
ment was that EPA develop guidelines to encourage beverage
container recycle and reuse.
The Department of Defense formally objected to the
original draft guidelines. DOD questioned the authority of
EPA to publish the guidelines and we commented extensively
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and we worked closely with EPA as the final guidelines were
developed.
EPA published the guidelines in final form on
September 20, 1976. Like good soldiers and in spite of our
initial reservations, we are complying with the guidelines.
We objected to the piecemeal implementation of the guidelines
and because of the complex issues involved, we elected to
test the guidelines in cooperation with EPA at ten selected
representative military installations — three army, three
navy, three air force and one marine corps.
There was a predictable reluctance on the part of
some beverage suppliers to cooperate with us in the test and
there were several logistical problems associated with
labeling containers and with the redemption, storage and
recycling of the empty beverage containers.
The test program requires that a 5* deposit be
collected on all carbonated beverage sales which are purchase J
for off-premise consumption. The test protocol does not
require that all containers be refillable but simply that all
containers be returnable and refundable.
Test parameters reflect changes in sales by the
number of containers sold, by the brand mix, the container
mix and the dollar value and an indication of the return
rate for those containers for which a deposit was required.
As of the end of September, one installation had
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been under test for six months; two for five months and
the remaining seven facilities for four months.
Opinion surveys indicate that people are generally
in favor of the beverage container program but they resent
the inconvenience of having to return empty containers for
refund.
This reluctance, together with some loss of
available brands, because the beverage suppliers elected not
to participate in the test program, has resulted in a decrease
in sales at most test bases.
The magnitude of the sales reduction is primarily
a function of the proximity of the military facility to
private sector markets which do not require a deposit for
containers.
Remote bases exhibit a small or a temporary loss
in sales. Bases which are located near competitive markets
have exhibited a significant reduction in sales. One base
in August, reported a sales reduction in excess of 80 percent
as compared with August 1976.
The container return rate, while quite poor
initially, gradually increased toward about 80 percent for
most facilities. This fact, together with survey information
suggests people purchase beverages weekly but return the
empty containers monthly.
Moreover, there is a predictable lag of return rati
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1 during the first three or four months following implementa-
2 tion.
3 It is our intention to continue this test for a
4 full 12 months at each facility. Once the test is completed
5 and the data analyzed, we will make a decision to expand the
6 implementation program to other defense facilities or to
7 limit the implementation to those installations where it is
8 clearly feasible to do so.
9 It may be apparent already that we are unable at
10 this time to answer the various questions which the Resource
11 Conservation Committee has posed relative to the beverage
12 container issue.
13 I believe, however, that we can safely say we
14 favor national legislation rather than this piecemeal
15 approach to implementation which causes federal agencies to
16 operate from a disadvantaged position which may result in
17 some permanent dislocation of previously established markets
18 I thank you for this opportunity to appear before
19 the Resource Conservation Committee and to advise you of the
2o status of our test program.
2i THE MODERATOR: Thank you, sir. Are there any
22 questions from the Committee?
23 Thank you very much.
24 Our next scheduled speaker is Mr. Robert Silvagni
25 of the Minnesota Pollution Control Agency.
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STATEMENT OF ROBERT A. SILVAGNI
MINNESOTA POLLUTION CONTROL AGENCY
MR. SILVAGNI: Thank you, Mr. Moderator, Madamf
Chairwoman, members of the panel, ladies and gentllwa, it's
been a long afternoon.
I am Director of the Minnesota Pollution control
Agency's Division of Solid Waste. In this capacity, I
manage programs in resource recovery, source reduction,
packaging regulation, some areas of hazardous waste manage-
ment and various municipal and industrial solid waste disposal
facilities throughout the State of Minnesota.
Representing the PCA Board, we appreciate this
opportunity to come here to present testimony concerning the
federal legislation for beverage container deposits, the
objective of your committee.
I don't plan to repeat many of the issues that
have been brought before you already by others. My statement
will be brief. It will be directed to four main points.
The Minnesota Pollution Control Agency, the
Minnesota Pollution Control Agency Board, the Governor of
Minnesota all have supported the need for container
legislation.
We believe that the people of Minnesota continue
to support this kind of legislation but due to intense
industry lobbying against our state container deposit
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1 legislation, we have not yet succeeded in getting our own
2 legislation passed.
*" We believe that a mandatory and uniform national
4 deposit program phased in over an appropriate period would
5 result in significant conservation of energy and material.
6 Such legislation would further result in a reduction of
7 solid waste, significant reduction in litter but most of a'.
8 it'll foster the first steps to a national awareness of the
9 necessity to allocate and conserve our natural resources.
10 It represents a very easy step forward toward a
11 very complicated problem. At whatever level -- federal or
12 state — the refundable deposit on beverage containers as
13 proposed is a significant source reduction measure.
14 We believe that source reduction is the first step
15 in dealing with our ever-increasing solid waste volumes and
16 can be achieved by eliminating planned obsolescense and
17 encouragement of increased reuse of items.
18 Some opponents of deposit legislation take another
19 approach — that of resource recovery or recycling but this
20 approach only serves to perpetuate the proliferation of
21 products while trying to see the society on recycling.
22 We point out that mandatory deposit laws, whether
23 they be federal or state, may be viewed in two ways. Such
24 laws may be considered as removing a solid waste disposal
25 subsidy presently provided to the beverage container industry
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— beverage industry and to those in our society who purchasi
throwaway containers.
Since all taxpayers must share in the costs of
solid waste collection and disposal, regardless of the
quantities of waste each produces, a deposit law would make
those who choose to discard containers pay for this privilegi
On the other hand, mandatory deposit laws may be
viewed as incentive that encourages the return of containers
for reuse and recycling.
Upon review of the Environmental Protection
Agency's efforts to put into effect the Resource Conserva-
tion Recovery Act, there does not seem to be a significant
and/or substantial effort to carry out the resource —
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Therefore, we strongly urge that this committee
and the Environmental Protection Agency to assign greater
staff and greater financial resources to waste reduction and
related container deposit measures.
The Pollution Control Agency will be continually
reviewing the various staff positions and the positions of
this committee and providing you written comments during
your further deliberations.
Thank you for this opportunity.
THE MODERATOR: Thank you, sir. Are there any
questions from the Committee?
Thank you.
All right. Our next speaker is Mr. William D.
Toohey, Jr. of the Society of American Travel Writers.
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STATEMENT OF WILLIAM TOOHEY, JR.
SOCIETY OF AMERICAN TRAVEL WRITERS
MR. TOOHEY: Thank you, Mr. Moderator, Madam*
Chairman, members of the Committee; my name is William D. Tooh^y,
Jr. I am here today on behalf of the Society of American
Travel Writers, an organization of almost 700 journalists
in the print and electronic media.
The SATW has long been concerned with threats to
our environment and thanks you for the opportunity to express
our opinion on a proposed national returnable bottle system.
I would like to read to you a resolution endorsed by
the Society at their 1976 annual convention:
Whereas, the refillable bottle is making a
comeback across the country as more and more counties, cities
and states pass laws which require deposit on all beverage
containers and the proliferation of one-way, thrcwaway
beverage containers places a heavy and unnecessary burden on
our national energy resources, and whereas, it would help
clean up America's roadsides, trails, beaches, parks,
streams and lakes which too frequently are littered with
beer cans and broken bottles and about three billion no
return beverage containers or 20 to 40 percent of all litter
are dumped as trash on the roadsides of America, and whereas,
the Management and Behavioral Science Center of the
University of Pennsylvania's Wharton School of Finance
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evaluated the Keep America Beautiful programs and other
industry-sponsored anti-litter efforts, concluding that neithe
significantly reduced litter nor showed promise of doing so,
and where a national bottle bill could save the equivalent of
two to four million gallons of gasoline per day, and whereas,
preservation of wildlife, national resources and environmental
quality will be enhanced with passage of throwaway legislation
Be it resolved that we, the members of the Society
of American Travel Writers endorse and actively support
bottle bill legislation — a small deposit will bring a
large return.
That concludes our comment. Thank you, Mr. Chairman
THE MODERATOR: Thank you, sir.
Are there any questions of Mr. Toohey?
INTERIOR: Mr. Toohey, Mr. Owings of the Can
Manufacturers Institute cautioned the Committee not to confuse
BTU's from coal and BTU's from oil. And, yet, you have just
told us that can legislation or deposit legislation could
save us two to four million gallons of gasoline per day.
Who are we to believe?
MR. TOOHBY: Sir, I heard new information today.
I really can't answer that. I would be happy to look into it
and have our Conservation Preservation Committee submit a
written answer to your question.
INTERIOR: Thank you.
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STATEMENT OF DR. ROBERT TESTIN
REYNOLDS METAL CORPORATION
DR, TESTIN: Mr. Moderator, Madam*.Chairman, members
of the Committee, my name is Robert F. Testin. I am
Director for Environmental Planning for Reynolds Metal
Company in Richmond, Virginia.
I am responsible for our company's solid waste
and resource recovery activities.
Reynolds Metal Company is opposed to mandatory
deposits on beverage containers. It is our belief that this
approach to resource conservation is deficient on two counts.
First, beverage container deposits could result
in serious financial and employment losses to material
suppliers, beverage container manufacturers and the beverage
industry generally.
Second, these potentially large disruptions would be
accomplished with a relatively minor impact on the problem of
litter, solid waste, energy and resource conservation which
they are designed to solve.
It is our belief that beverage packaging systems
can most efficiently serve the consuming public in the free
market environment.
As just one example, I would like to hone in on our
product which is the aluminum beverage can. This container,
the aluminum beverage can, was introduced in the mid-1960's
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and has been an extremely successful package.
Competitive pressures have forced other material
suppliers such as glass and steel to dramatically cut their
package weights during the time that the aluminum can has
been a competitive force in the marketplace.
And we have not been idle either. The aluminum
beverage can has been reduced in weight approximately 23
percent by Reynolds since its introduction and we have
continuing plans for further weight reduction.
The aluminum industry is on an energy conservation
program, as well. It has reduced the energy required to
manufacture aluminum more than eight and a half percent in the
last four and a half years. And we are using less primary
metal and more recycled scrap metal every day, thus increasing
our energy savings.
It is our belief that the response of the consumer
in the free market environment will push for the most
viable package when all factors — by all factors, we mean
economic, environmental, convenience, quality and so forth,
when all of these factors are taken into account.
We are confident that this package will be the
aluminum beveragecan, but we are willing to stand the test of
a free market environment to determine the eventual outcome.
We believe that any other approach will be economically
disruptive and will not stand the test of the cost/benefit
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analysis.
In addition to constantly sharpening our competitive
edge through approaches such as materials and energy
reduction, we are continually searching for innovative
solutions to the problems your committee is addressing today.
The most dramatic example of this is the aluminum
can recycling program which last year brought in some 4.8
billion aluminum beverage cans and that is about one out of
four cans produced in the United States.
As a pioneer in consumer recycling, Reynolds
brought back some 2.4 billion cans in 1976. It is approximate
50 percent of our total production.
From its inception ten years ago, our Reynolds
program alone has resulted in the recycling of 9.7 billion
cans with a cash payment to the public of some $62 million.
Aluminum can recycling is continuing to grow, both
in the company and throughout the industry at a rapid rate.
At last count there were some 2100 locations throughout the
country where aluminum cans and often other — could be
sold back to our industry for cash payments.
By the way, our current price is 17 cents a pound.
I think an earlier speaker mentioned that it was 15. We
have not ignored the other half of the problem either. Those
containers that are not separate)from recycling but find their
way into the solid waste stream.
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At Reynolds we have been conducting research
since the year 1970 on the development of a method to
retrieve aluminum from solid waste. Other aluminum companies,
private companies, manufacturing special equipment, have
also been investigating in this area.
Several aluminum recovery systems are now in place
in resource recovery operations around the country and a
number of others will be on line shortly. We at Reynolds
have several long term contracts to buy the aluminum
recovered by solid waste processing systems. We understand
that other aluminum companies have similar commitments.
On the first of November, we are sponsoring a
technical seminar on the recovery of aluminum in solid
waste. This seminar is pointed towards the special engineerin*
community. It is designed to insure the technology of
aluminum recovery from solid waste is made known to technical
communities responsible for designing resource recovery
systems.
Similar seminars sponsored by other aluminum
companies are being held in Pennsylvania and California
before similar technical audiences.
In summary, I believe we are moving forward to do
the job which is of concern to this committee. Furthermore,
we are doing it in a way that is not economically disruptive.
Instead, it makes a positive contribution to the economy of thi
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cp9 1 nation. We will be supplying the committee with additional
information on the aluminum can including our response to
the questions that were prior to the hearing.
If you have any questions for me right now, I would
be happy to try and answer them for you.
THE CHAIRPERSON: If all the aluminum cans were
recycled, could you handle them?
MR. TESTIN: We — yes. I will just give you a
flat answer. If you brought them all into us tomorrow, we coul
not. But technically, yes, we could handle them given proper
notification.
In fact, our goal through these combined programs,
continual recycling and the recycling from solid waste, you
could get them all back.
COMMERCE: Is it likely that the price would remain
at 17 cents?
MR. TESTIN: Let me answer that question this way:
The price is tied to competitive sources for the metal,
which in the case of aluminum are competing with —.
So over the long haul, I think we can generally expect that
the recources will become more dear in this country.
When we began this program, we were paying 10 cents
a pound. Competitive forces have pushed us to 17 cents today.
So I would anticipate that the thrust of your question would
lead me to the fact that in all probability, over the long
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haul, we will continue to see an increase in the value of
this material.
THE MODERATOR: Thank you.
MR. STEIGER: Has there been any study made on the
investment into the five cent deposit? In other words, the
can inventories at retailors for which somebody made a
five cent deposit there — have any idea what the thought is
on that?
MR. TESTIN: Well, you would make the calculation
on a yearly basis. I am not privy to detailed data.
MR. STEIGER: In terms of what — tens of millions.
of dollars or what?
MR. TESTIN: I would think, speaking on a national
basis, although you have to ascertain what your recycle or
return rate timefframe was — but it would be a very large
volume. Yes.
THE MODERATOR: Thank you.
INTERIOR: Can you give us some idea as to what
prompted Reynolds into collecting these cans in the first
place?
MR. TESTIN: We have been interested in the whole
concept of recycling since the 1960's and are continually
searching for ways to get aluminum back into the company.
So, the first answer is that it is a relatively good
method which is cheap in terms of energy and capital.
Secondly, we do view it as a positive solution to the
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problem of litter, solid waste.
INTERIOR: This question is probably better
directed to your predecessor. At what percent of capacity
does the operation of a can recovery operation become
maximal?
MR. TESTIN: In rough numbers for us, and it is
very significant in terms of the loss of market — if we
lose, say 25 percent of our market, then it is effectively a
100 percent loss, so when people speak of 20 or 25 percent of
the market on a national basis, that would put us out of the
can business.
INTERIOR:Thank you.
THE MODERATOR: Thank you. Dr. Testin.
I know that we have a formal statement submitted by
the National Wildlife Federation, but I am not sure whether
there is a representative so we will greet Mr. Arthur Purcell
of the Technical Information Project.
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STATEMENT OP ARTHUR H. PURCELL
TECHNICAL INFORMATION PROJECT
MR. PURCELL: Thank you. Technical Information
Project appreciates the opportunity to make a statement
before this important meeting. TIP is a non-profit research,
education, and consulting group incorporated in the nation's
capital.
We specialize in resource conservation and
environmental policy areas. My name is Arthur H. Purcell
and I am Director of TIP.
As a member of President Carter's 1976 Science
Policy Task Force, I was greatly concerned over materials
conservation issues, including mandatory deposit or bottle
bill approaches to materials conservation.
It is a pleasure to see that the Resource
Conservation Committee has taken the effort to hold this
public forum on the bottle bill issue.
TIP is vitally concerned with the subject of waste
reduction and energy conservation. The National network of
citizen leaders we have generated through our ongoing
citizens and waste workshop series across the country shares
this concern.
Over the past two years TIP has had the opportunity
with EPA support to conduct a series of forums in nine major
centers of the country where citizen leaders have come
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together for intensive information exchange and interaction
on national, regional, and local waste issues. In every one
of these sessions the bottle bill has been a prominent item
of discussion.
The workshops have documented and reinforced
important pieces of evidence in the bottle bill controversy.
It is now clear that: bottle bills do save energy; do
conserve material; do decrease environmental degradation.
It is equally clear that: citizens everywhere are
willing to try returnables again; citizens want the option of
returnables. They don't want to be told by beverage container
makers or distributors that they want throwaways,that is what
they are going to get.
Finally and very importantly, bottle bills do cause
economic dislocations. But, argument goes on ad infinitum
as to whether the overall effect is positive or negative.
Some beverage industries have increased business
through bottle bills and some have lost. Some recyclers feel
hurt by bottle bills and some have benefitted. Some people
have lost jobs. Some have gained.
As we have gone across the nation, I have perceived
adversaries in this issue starting to find common ground. I
have seen environmentalists very worried about jobs that
might be lost through bottle bills, and I have seen industrial:
worry about the energy waste inherent in throwaway products.
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Simply stated, I have seen citizens of all
orientations think seriously about the need for the kind cf
measures for energy and materials conservation entailed in
national mandatory deposit policies.
The Resource Conservation Committee can make a vital
and lasting contribution to resolving the mandatory deposit
issue by fostering the nuclei of cooperation that is
sprouting across the country.
It can take steps to settle long-simmering
arguments, fed by conflicting sets of data on specific
economic, energy and environmental impacts of mandatory
deposit impacts.
A wealth of information exists on these questions,
but it has to be objectively and effectively assessed. The
committee can play a fundamental role in such assessment.
The Resource Conservation Committee has a strong
enough mandate and impressive enough membership to serve as
an effective bridge between adversaries in the bottle bill
issue.
TIP would be most interested in helping build this
bridge; this network of citizens with whom we have had
direct contact share this interest. Working together we can
make the controversy half of the tired phrase bottle bill
controversy ancient history.
Thank you.
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STATEMENT OF WILLIAM SADD
GLASS PACKAGING INSTITUTE
MR. SADD: Thank you, Mr. Williams.
It certainly has been a long wait and 1 take my hat
off to those of you who have been forced to sit through the
entire session from its inception this morning.
I see that we did bring in a fresh team in some
place who unfortunately missed some of the points which were
made today.
Let me state for the record that I am William Sadd,
president of the Glass Packaging Institute. I have a prepared
statement which I will submit for the record and we shall
also submit more detailed comments on the staff papers which
follows, I guess, with the new Freedom of Information Act
requests.
So, rather than working from the prepared text,
I would like to just take a few minutes and go over a few
of the points that have been made today and maybe a couple of
points that haven't been made.
I personally have been thrashing around with this
issue almost from its inception. I think that I have heard
most of these things before that were said here today.
As a matter of fact. Congressman AuCoin this
morning tried to take credit for creating the first bottle
bill. Well, he is wrong about that.
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The first one, I guess, I believe was written back
in 1953 in the State of Vermont which legislated against just
nonreturnable bottles.
A funny thing happened with that law. When the
free market system took over when the nonreturnable bottle
was banned from the Vermont market and cans came in and
took over the market and they then had the same problem and
the law was allowed to go into oblivion, only to re-emerge
years later.
As I say, I think I have heard most of these things
before, but there is one thing that I haven't heard, at least
not in this public forum.
I heard Congressman AuCoin call industry spokesmen
liars. Frankly, I hadn't had that thrown at me before on this
issue. I ««»t it and I think we are owed an apology by the
Congressman.
I am quite used to rhetoric of the type of
Senator Hatfield. It is very customary in this debate,
although not particularly illuminating.
I would like to suggest that in this discussion,
this debate on beverage container deposits, the facts are a
very elusive item. You have heard numbers ad nauseum about
Oregon, about Washington, about litter, about energy, about
solid waste, about prices.
I have looked at all of these things. I suggest to
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you that most of these numbers stem from a very few key
documents and a very few data bases.
May I recommend to the members of the Committee that
you look behind the staff papers, go back to the seminal
document data bases that are involved. That may help shed
some light on all of these conflicting facts with which we are
faced.
I could go on for hours, but you have got to go back
and get your hands dirty in these facts to really reach any
conclusion.
Several other things. I think I would like to
comment on a point made by Pam Deuel. Pam,you made the
point that — isjhe still here? —yhe made the point that
I think we shouldn't try to apply the deposit system to
fruit juices and so forth because the system doesn't exist
for that.
What we are trying to tell you in terms of beverage
containers is that the system just doesn't exist there either,
with the capacity to handle the job.
You have got right now in my opinion a system
that is in balance from an economic point of view.
The soft drink bottlers and brewers are selling
the returnable refillable containers where it makes sense
for them to do so and the beverage container deposit idea
is just an opportunity to throw a monkey wrench into that
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cp!9 * (I piece of machinery from which we would have to then build —
2 II industry would then have to build a new set of machinery to
3 II get these products to market.
4 II This is one reason why, Bob Caplan, I couldn't
5 answer your question of whether I preferred death by hanging
6 or to be shot at sunrise on the type of deposit issue, the
7 type of deposit that should be put in place because I don't
know at this point in time exactly how we would have to
restructure in order to maximize our market share.
One thing seems to me — or several things seem
abundantly clear. If we put in a mandatory deposit,
these things are that the consumers in this country are
still going to drink beer and soft drinks. What level?
Will sales go up? Will sales go down? This is one of those
debateable factual issues.
But they are still going to drink some amount of
beer and soft drinks and those beer and soft drinks are going
to have to be packaged in something. Therefore, under a
deposit system it becomes our job — how do I maximize my
market share of that remaining market. And frankly. Bob,
I don't have the answer to that under a deposit system.
Another point that Pant Deuel made. The 70 percent
return rate — 70, 75 percent return rate. Okay. Just
don't be misled by it. Go back to what Sid Mudd said this
morning. Seventy-five, that is 25 percent. Twenty-five into
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a hundred is four. A trippage of/frour. That is the experience
a trippage of four.
Now, let's apply that. Take that trippage of four
and run it through your research findings of FEA — studies —
and see what that gives you under projected results. I don't
think that you will like them.
Another point that was made. The gentleman from the
Department of Defense. I almost wanted to jump up and say
hurray, the free market does work. Obviously, if the base or
basis where the people are going outside, the consumer in
those places is voting with their feet.
Now, it is a strange phenomenum that we cannot
answer. In opinion research consumers will say we like the
idea of returnable bottles. But they don't buy them.
I suggest you will have to look at the facts that
come out of the DOD study and I suggest that it looks like the
consumers is saying one thing and going another thing.
Let me just try to make a few points about my own
industry in this situation. Many witnesses which you will
hear are merely dishing up hearsay upon hearsay, pretty far
removed things from reality.
I think I am competent to make a few judgments
about my own industry. We have been there.
We have 127 plants in the glass container industry
representing 90 different congressional districts. I kept
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thinking as that gentleman from the Sierra Club was
painting this great picture of the encounter in the Oval Offic
with the President, wouldn't that be funny to see those 90
congressmen in there, also, to talk to the President?
In my industry, if the loss — if the volume loss
goes up somewhere between 30 and 40 percent — which if you
take the numbers put out by Research Triangle and FEA, they
say the demise of the can or bottle — okay. Take that
volume out. If we are talking about somewhere between
30 and 40 percent of our industry, obviously, the result will
be a tragedy in the glass container industry.
I am talking about towns like Loren, South Carolina,
Streeter, Illinois, Alton, Illinois, Kaiser, West Virginia,
Sulfulfa, Oklahoma, Reston, Louisianna. These are the kinds
of places where glass container plants are located. Not to
mention Congressman Hughes'District.
You don't take the kind of unemployment in towns lik
that with cuts of 30 to 40 percent volume would mean. I would
also predict that cuts of that magnitude would have an
ultimate anti-competitive effect leading to further
industrial concentration.
I predict the price of all glass containers under
such a scenario would necessarily go up after a period of
grotesque fluctuation. Why would that happen? Because,
of course, we are a capital intensive industry. We would be
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spreading a very large amount of overhead over a greatly
reduced production and also we would be eliminating our
most efficient operation.
I would think that this Administration would want to
avoid the anti-growth and anti-job symbol. President Carter
has said that economic growth and environmental improvement
are not incompatible. I happen to believe that also.
What are the options?
Certainly, I think litter is really the only
legitimate issue here. I think the entire litter issue needs
to be addressed.
Industry and others have developed a set of tools
that we have been trying to use to help solve the litter
problem. We have had absolutely no help from the EPA.
As a matter of fact, we have had interference
with the operations of Keep America Beautiful. Allegations
that this is an industry front. I think it needs to be said
under public record, of course, we have supported Keep America
Beautiful.
Industry set it up. We have supported it and we are
proud of it and these attempts to tear it down are in my
opinion shameful. Let's get out and try and solve problems
instead of finding scape goats.
It has been suggested by the National Soft Drink
Association that a small tax in order to provide seed money to
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help promote litter programs and resource recovery across the
United States would be a sensible idea.
If that is what it takes to do it, then let's get on
with that. I think, in summary, there is an opportunity here
to work together and I would like to see us all take that
opportunity. You folks on the Resource Conservation Committee,
most of you are fresh and new to this issue.
If you will take a fresh, new look at it perhaps we
can find a way for industry, government and the environmental
movement to work together to solve these problems. It would
certainly be a feather in the cap of the Carter Administration
to stop the squabbling that is going on in this country.
Thank you very much and I would be happy to respond
to your questions.
THE MODERATOR: Thank you, Mr. Sadd.
Are there any questions from the committee for
Mr. Sadd?
Thank you very much.
MR. SADD: Thank you.
THE MODERATOR: We will hear next from Mr.
John Briar, the Montgomery Environmental Coalition.
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MR. JOHN BRIAR
MONTGOMERY ENVIRONMENTAL COALITION
MR. BRIAR: My name is John Briar. I am the
director of the Montgomery Environmental Coalition. Our job
there is to do all those things we can to improve the
environment in that particular area.
It so happens that I have been involved for many
years in beverage container legislation. And sitting here
today and hearing many of the things, I just first could get
in and hit some of these things, because I do say industry
does lie in some instances.
The water issue. The water is recycled. The fact
that Oregon did not have a non-pop top can when it started.
So, obviously, can business went to zero. They went to zero
in Fairfax County last month because industry would not put the
non-pop top can in, even though they had 18 months. And we
heard today that non-pop top cans are coming and they are
going out every day.
And I recently made a trip around the country and I
saw non-pop top cans, but not, aside from Coors, a single
beer container with a non-pop top can. So you are going to
get those fluctuations —.
But I do want to address myself, to limit myself to
one area and that is what is going on locally and why there
should be and must be a national beverage container
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legislation.
The first point is I have read the studies upon
which your staff made their report. I support that report.
It is an excellent report. It is factual and they did a
marvelous job coming up with a mass of data to bring it
together and put it down and it is very well documented piece.
So in Montgomery County — and I think we are a
microcosm of the nation in this regard — we looked at
source separation. And we said what is it going to take to
put in a big garbage gobbler and what is it going to do —
what do we have to put in it to pull out aluminum, pull out
colored glass. And we spent a lot of money on that. At the
same time we voted to put a mandatory deposit on beverage
containers because we thought that source separation was the
answer. We will go to mandatory deposit. We will take that
six percent of trash right off of our solid waste stream
now.
That is the best way to do it. It will be un-
contaminated. It will go back in and get recycled or
rebuilt. And then we took a good look at the state of the
art of resource recovery and we said, no, we are not going to
go for it.
We are going to wait and wait and see what happens
because at the time we looked at it and we spent a lot of
money, it just wasn't there.
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In regard to the question earlier, those particular
instances you cite, several of those are not trying to pull
the aluminum or the glass out of their solid waste treatment.
The beverage container first, if you source separate as you
source separate newspapers, then you get about ten percent of
your solid waste.
So that was our decision. And in 1975 we voted in,
as did Fairfax County a mandatory deposit legislation to take
place about now. Fairfax's went into effect last month.
Montgomery County's will go into effect next quarter.
And we have been joined by Loudin County. We are
going — you know what happens, the myth that you can't win
a referendum was beat in the last election in Michigan, in
Maine and lost by some seven-tenths of a percent in
Massachusetts.
It will be oh the ballot again. And each one of
these states or localities or counties are going to do some-
thing different. We did it here. Loudin County when they
passed the law did not put on their labels sold in Washington
metropolitan area.
They said — they put iold in Loudin County. So
now the bottlers here are going to have to put Sold in
i<
Washington metropolitan area on those beverage containers
going to Montgomery County and Fairfax and they have to put a
different label on those going into Loudin County.
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The fact that we represent, will represent a million
people in this area, we will see how long industry will
write off that many people and say we will make the bottle
bill look bad. And, therefore, you are going. We saw it
happen in Oregon.
The competition came in. What happened? In Fairfax
Safeway finally got non-pop top cans and they put them in.
Giants weren't going to do that. Didn't know what they were
going to do it. Giant now has signs up, several weeks we
will have non-pop top cans.
This should have been done away with years ago
if our Industry was so concerned with our environment. They
could have easily gone to another type top.
So industry, the competition will take care of it.
We have in our area cities and we have to go back and get
them to go along with the legislation. We will have orders
with the District, Prince George's County that are going to
cause trouble because some people will go outside to buy those
containers because they don't realize the things that your
excellent staff study said is why we do this.
They think of litter. And they say I don't litter.
Therefore, I shouldn't have that bill. Well, i£ litter was th
reason, a lot of us in this battle, was the sole reason, we
wouldn't be in it.
It is the other factors. So we are going ahead.
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We are going to have a problem. The Industry is going to have
a problem. They have to label out of one plant. They
have to label, perhaps, two different labels. And then
they are going to have to sort their goods and send their
goods to the other counties that don't have deposit
legislation.
This is going to cause them trouble. It is going
to cause an area. Our deposit is on the distributor. I
recommend to you in the national legislation to move it back to
the wholesaler or distributor because, after all, he is the
man who chose the container. He is the man that can make the
choice.
But our idea is he chose to put a can into the
county. He will get a can back. And he will make the
decision what to do. He will either pay to throw it in the
trash or he will recycle it. And we will let his dollars
take care of that.
How does he want to handle it at the —. Eventually
he may make refillable bottles and use those. So, we also
passed the law, which is a net in this area, to make the
stores label honestly the price of the refillable because
they were putting on their price tag the cost of the
refillable with the deposit contained in that price.
So we, I think, over a period of time — it has been
five years. We passed the law in 1975. Told the people to get
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ready in the two years time it was going in. Industry didn't
believe us. And got caught up short.
But I think if you go national and you pass your
bill and you make the recommendation — and it will be a
hell of a battle in Congress', but if it passed with a time
for it to go in, then I think industry should stop and think.
Do you want to be still faced with these continuing counties
and states coming up with different laws?
DO they want to really operate? or; will they ftnally
join with us and ask for a national law? One law that will
go across the nation.
And then once they get with that and gear up for it
and make it happen, then I think the competitive nature of
our industry will take care of itself as to who gets the
business or who doesn't get it, what outfits stay in
business, what type of container they use, do they recycle,
do they — or what?
And I think that is the point. So I plead with you
my projectiodof it is right. There will be more than four
states in the future. There will be more local counties
going and we are going to go because we think that it is
the right thing to do.
But national legislation will make it much better
for everybody.
Any questions?
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sp30 1 THE MODERATOR: Thank you, Mr. Briar.
Does the committee have any questions of Mr. Briar?
Yes, sir.
VOICE: I would just like to hear you say it flat
out. You are in favor, as I understand it, of national
deposit legislation which would be preemptive in that it
would take the place of any local options; is that correct?
MR. BRIAR: I want that debated in Congress to see
what it is. Because I think most of us backing the legislation
if it is a strong and good bill, yes, we would be for that.
But to sit here and say today and not read the bill
jand to have a watered down bill that didn't do the job, then
I would take the other side and say, no, a stronger state law
county law should preempt the national law.
So I think that remains for that time to see what
final writing on the bill is.
VOICE: Thank you.
THE MODERATOR: Thank you very much, Mr. Briar.
Our next speaker will be Mr. Tom Wilson of the
American Iron and Steel Institute.
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TOM WILSON
AMERICAN IRON AND STEEL INSTITUTE
MR. WILSON: Thank you. I have a prepared statement
which I would like to have included in the record with your
permission. I have given copies of it to the parties.
I would just like to make a few observations at this
late hour. I am not going to restrict my remarks to the
questions put forth in the letter from Ms. Blum. THey are
answered in the statement, although the options in many
of them seem to me they are extending us the right to select
which tree you would like to get hung on.
But I would like to make some observations on the
principle of whether anybody ought to be hung.
Last year when draft legislation was being discussed
and ultimately became the resource recovery and conservation
act of 1976, considerable — untold amounts of time were
devoted to the meaning of the words resource conservation.
After the smoke had cleared, industry and labor
were convinced by the committee staff members, the committee
members and their staffs that resource conservation —
Here we are today back at the same old stand, the
beverage container issue which has been before the House and
Senate for more than seven years and has yet to get a
favorable committee vote. Moreover, the Senate voted on a
mandatory deposit amendment to the energy act and defeated it
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overwhelmingly.
Nevertheless, the members of the committee have been
given several draft background pipers which I believe are
the — of years of some half-baked assumptions —.
The method behind most of them boggles the
emperical mind. First, you take a survey, like the one
conducted by FEA and put that in place. Never mind the
hundreds of thousands of words that we filed in answer
objecting.
Then the GAO hires another research firm, a 90-day
whirlwind survey and they base their assumptions on the FEA
assumptions, which are now scripture.
Again, none of the hundreds of comments submitted
on request to GAO have surfaced. EPA now presents the
new findings to this committee on a position paper which
refers to these former findings as facts.
Industry cannot be faulted if their initial
reaction to some of these documents would be to play
Pontius Pilot and wash their hands of the whole thing. The
stakes are much too high and we must not let stand
irresponsible good intentions on the part of a handful of
people.
For example, practically all these claims for
energy savings, solid waste economy, et cetera, is on the
assumption that people will return their soft drink, their
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beer bottle.
You heard today from the Department of Defense,
they say five times. Yosemite says four times. And in the
real world, about 2.9 times in the brewing industry these
days.
When you see these figures about trippage, you do
get misled, because 85 percent of the returnable bottles are
sold on an unpremised assumption in bars, hotels. So,
consequently, they are easier to recycle.
what you don't hear about is the ones that are
sold over the counter and taken out and how many times they
are recycled.
Now, what is the point of all of that? Well, the
point of it is that practically all the studies of
projections that are made are hung on this uncontrovertible
fact that they will be returned ten times so now you can
amass all these energy savings, all these economic savings,
et cetera, et cetera, et cetera.
But if it doesn't happen, then the whole thing
becomes meaningless. For example, a ten-trip returnable
bottle. We talk about — these studies talk about conserving
energy. Again, Mr. Rollings talked about the BT0 that
can't be changed from gas to coal.
For example, in the steel industry we base our
energy, about 67 percent, on coal. Further chunks of it
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come from — andgas and other — very little electricity -is
involved and very little petroleum, relatively.
So as a consequence to eliminate the can as e sof€
drink or a beer item, it is not going to come up with any more
oil to speak of. These things are not interchangeable.
Yes, there may be some energy savings, but right
now the steel can, according to studies made by Dr. Katsun,
American Can Company, and we have copies of them available,
the steel can energy requirements, which are relatively low,
are about equivalent to a six-trip returnable bottle.
We project in the early 80's when recycling gets
more successful than it is now and when we have a steel
easy open end, which we are working mightily on, that we will
be competitive energy-wise with a ten-trip bottle assuming
that there is anybody who would bring them back ten times.
So this issue may solve itself. But there was
reference made earlier today also to the water problems
around here. I looked into it myself just for information
and found that the average bottle washer uses 44,000 gallons o
water per hour.
I wonder how the people over in Virginia are going
to look on that with their returnable bottle. And in their
future, as I pointed out, steel cans will become energy
effective, vis a vis returnable bottles and this argument
today could become moot.
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AT best we believe beverage container laws do
reduce beverage related litter. But there is more at stake
here than esthetics. There is homes and mortgages and
tuitions.
I don't have to dramatize the employment situation
in the American steel industry today. There are cumulatively
some 60,000 united U.S. Steel Workers receiving so-called
trade adjustment assistance. By the end of this year there
will be another 23,000 unemployed.
Container deposit law would unemploy another 15,000
or so in the steel companies alone. This is about the same
figure that PEA came up with.
In the glass, aluminum industries which EPA projects
for the Resource Conservation Committee are some 54,000
other industries -- or 65,000 other industries. 54,000 for
the aluminum and glass.
This makes for some 135,000 jobs by the EPA's
figures, skilled workers, steel workers, glass bottle workers
and aluminum workers unemployed. Do we really seriously
propose putting these people out of work?
What about these projected new jobs? There are only
8,000 supermarkets in the United States that are truly
supermarkets — huge. I don't know — the yardstick is
either a quarter of a million square feet or a million
dollars. I am not sure which.
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But there is 8,000 of any great size. Are they
really going to employ 114,877 bottle hasslers, projected?
Or are the Mom and Pop stores going to hire these people or
the superettes?
Once again we are replacing a known with a
speculation. And we have heard it said — Mr. Chester spoke
to the point — that these people don't want welfare. I have
heard them reject it myself.
And then somebody says, well, maybe we can retrain
them. What can you train a man to do in a city that is
dieing? What do you train a man for in Youngstown or
Johnstown?
I put it to you this is matter fraught with peril.
Now, to ameliorate this unpopular jobs issue, a recent EPA
study by Franklin Associates called "Analysis of Environmental
and Economic Impacts of Waste Reduction Procedures and
Policies" assured the readers there will be little change in
the package maintenance, the beverage containers with a
national container beverage law.
If this is true, then, how are all these benefits
going to accrue and all these energy savings? I really don't
follow that line of reasoning.
It seems that if you have any reservations at all
about this issue, there is an answer. We are promised more
jobs, less energy, less solid waste, less litter and lower
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cost to consumers.
It would seem to me for the first time in my
half century that I am viewing perfection in the works of
man. But I am more than a little bit dubious.
Thank you.
THE MODERATOR: Thank you, Mr. Wilson.
Are there any questions from committee members?
VOICE: Mr. Wilson, what kind of mills in terms of
age are tin cans made in? Are they mostly modern mills or are
they mostly — or is it distributed between the modern and the
older mills?
MR. WILSON: What part of it are you talking about,
the tin plate part of it or the steel part of it?
The tin plate plants are virtually all new; like
Mr. Testin, today you are dealing with double reduced tin
plate, TFS, tin-free steel and all these plants have been
put in within the last ten years. The product we make
today doesn't -- it is 53 percent lighter than the product
we made ten years ago, which is a part of this energy saving
we have been projecting.
So, therefore, all the plants that make tin plate
are new.
VOICE: Okay. Thank you.
MR. MODERATOR: Thank you very much, Mr. Wilson.
Now in place of Mary Jill Solman, may we hear from
ti&K. Ellis Yochelson, please.
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STATEMENT OF ELLIS YOCHELSON
PRIVATE CITIZEN
SR. YOCHELSON: MadamfChairman, members of the
panel, seven and a half years ago I conceived the notion
of a required deposit which was instituted in Bowie, Maryland.
Thus, I am partly responsible for your being subject to a
long day here, both you and the others who were here earlier
in the day.
And insofar as you have been insulted by some of the
people in industry in their using a first name basis or being
abusive towards the panel, I apoligize, but, of course, what
they say is not under my control. I am a private citizen.
What is most discouraging to me is that I picked
the simplest environmental problem for analysis sever, and a
half years ago and insofar as I can see, essentially nothing
has happened since then.
I urge the panel to look at the nationwide
implications of this issue. What many of the people in
industry are suggesting is a cure for cancer. Here is
three billion dollars, come back in four years with the answer
In science things do not work this way. You take
one little strand. You try to unravel it. Your concern here
with the question of a required deposit on beverage containers
stick to that issue.
You asked 11 very complicated questions. I will
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attempt to answer them in a written statement. But I would
like to make a few off-the-cuff remarks here to the
members of the panel.
Insofar as the issue of energy. Of course, we are
aware that the various kinds of energy are not equally
distributed. They are not equally convertible. But we do
know that one-third of the houses in America are heated by
natural gas and we do know that the manufacture of throwaway
bottles is extremely energy consumptive in terms of natural
gas.
And I do know that the one percent of energy
electricity being used by the aluminum can people is
electrical energy that I cannot use to run my stove.
I think that the thing that is going to get us is
this series of small losses. The big things we can handle.
But unless we can convince the American public that we are
serious by taking such an obvious luxury product as a
throwaway can and doing something about itr no one will ever
take the issue of energy conservation serious.
People in FEA know that the increase in use of
energy has been three to four percent since the embargo, but
they also know that in the last six months it has been seven
percent. This is a national scandal and teeters on the
brink of a national disaster.
And yet, we fiddle. So far as the business with the
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Department of the Treasury, the last time I checked in terms
of the total amount of eoifite being bought, it seemed to me
that something on the order of three-quarters of a billion
dollars of unfavorable balance of trade was being spent to
buy the raw material for throwaway cans.
Now, again, this is only about one percent of the
unfavorable balance of trade. But it is the cumulation of
the unfavorable balance of trade that will get us.
I am not much of an economist. I do know that
recycling requires both a market and a separation of the
material. The man from Reynolds Aluminum indicated quite
clearly that he has a market for the can. He would love to
have all these cans back.
He could use them. Marvelous. Great stuff.
He wants them. What I can't understand is that a required
deposit would effectively insure his getting all the cans
back for nothing and yet his company is willing to pay
17 cents a pound, why should corporation funds be squandered
like this?
I would like to wonder whether perhaps this is
really more public relations being deducted as an illegitimate
business expense than something really concerned with the
environment.
For the absent member from OMB, I would like tP
point out that a required deposit is not going to require one
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cent of taxpayers' money to implement. And I am all in favor
for saving taxpayers' money.
The gentleman from Labor is not here either. We
keep hearing about the substitution of low class, common,
rather stupid labor for these high class, highly paid people
that are making cans and people.
I believe that this is an insult to a large segment
of the American laboring public. Furthermore, it is perfectly
clear, if anyone bothered to look around, that there is a
great deal of high technology to be done in the required
deposit field. Norway, for example, uses a computer system
so that there is an automatic return and calculation of the
return.
Now, their computers do run much better than the
fare cards on Metro. But even so, they have to require a
number of mechanics to keep them going.
So far as EPA is concerned, to a very large extent
we are talking about attitudes, as much as anything else.
I would point out to you the July — pardon me — the June 14t
journal of the Medical Association of America with a report
on injuries and deaths caused by infants swallowing pull tabs.
I think it requires a certain amount of hubris
on the part of the industry representatives to come forward
wearing neck ties which proudly display such a pull tab.
So far as Commerce is concerned, I would recommend
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that you go up to Baltimore and look at a small company called
Drink Me, Pops. The head of this company campaigned several
times in Annapolis against the required deposit and then
decided that he would go into business with the required
deposit on beverage containers.
He seems to be making a handsome amount of money.
And he has at last count 18 stores. Unfortunately, I cannot
get this in the Washington area, even though it is more
economical and has a greater variety of flavors.
So far as the gentleman from the Interior Department
is concerned, I am sure that he knows of the experiences with
Johnny Horizon and is quite aware that public education
campaigns by and large don't do the job.
One of the things that I have always wondered about
is why Chief Iron Eyes Coty in all of his looking around
at litter in this country has never seen a can. The studies
thatpave been done in some of the national parks on the paying
of bounty for picking up litter, have proved to be most
effective.
And I would hope that the Interior Department would
move towards legislation and not towards volunteerism.
So far as the Council of Economic Advisors, who is
again not present, I will simply repeat in public the thing
I have said previously in public, that I am quite prepared to
pay $10 here and now for anyone who will give me a bottle of
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ginger ale purchased in the Washington area in a refillable
bottle.
We do not have free choice in th^market place.
We have what is quite clearly a situation of monopoly.
And, finally, for the person from the Council
on Environmental Quality, I would point out that though at
one time the symbol of America was the eagle, we all really
know it is the beer can on the highway.
Thank you.
l»n
THE MODERATOR: Thank you,fpr. Yochelson.
Do we have any comments or questions?
INTERIOR: I have got a few comments.
First of all, if you will take Pepsi or Coke in that
returnable container, I will be glad to pick up your ten
dollars, because I know I can find those on the shelves. I
never looked for ginger ale, since I don't drink that.
Second of all, I would like to make a comment since
Dr. Testin isn't here. The answer to your question concerning
why Reynolds would much rather continue the status quo with
recycling rather than support deposit legislation, I believe,
is their fear that they will lose a substantial amount of
business and second, that they probably feel that they will
have to pay something — although maybe not 17 cents a pound —
for that aluminum which is left.
There is no question in anybody's mind that the can
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market will decline under deposit legislation. The only
question that I have seen raised is how much.
And even PEA's — or the Research Triangle's report
postulates a decline from 27 percent to 20 percent of the
market. I believe that is where the concern is.
Last of all, I would like to say that I don't have
any information on Johnny Horizon. I was never associated
with that or the Park Service. But I can tell you that I
believe firmly that recycling as a technology, at least in
some forms, is viable and does work.
Admittedly there are some forms which still need
considerable development.
<*R.
«R. YOCHELSON: May I respond?
THE MODERATOR: Yes, sir. Go right ahead.
f»vft.
I*. YOCHELSON: Pepsi-Cola and Coca-cola are
virtually the only things that I can get in a refillable
container. Industry has denied to me the opportunity to
drink Swepps or Club Soda or ginger ale or a host of other
things.
I happened to be concerned about the use of natural
resources, so I have simply given up drinking these things.
I will admit that it is pretty much a head in the sand posi-
tion, but, nevertheless, I have some scrupples.
On the question of aluminum, I, too, have spent
some time picking up litter. In fact, I ran litter surveys
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for two and a half years.
One point was only briefly alluded to here and this
was the lady from Florida who mentioned the question of
biodegradabili ty.
Now, paper scattered around the countryside doesn't
bother me in the least. It looks unsightly, but it disappears
in a month or four months depending on the kind of paper.
Even a steel can will rust through in some time. Some of
my data suggest that if you put a steel can in a swamp in
New York State it will last for ten years, but sooner or later
it will disappear.
But the situation with aluminum is entirely
different. As geologists, we have no experience with aluminum
The best notion that we can get as to how long this will
remain around to blight our landscape and to hurt our
children is a long time.
And by a long time I am probably talking in a time
span of millions of years, not hundreds of years or thousands
of years, but millions of years.
I think that the whole concept of recycling has
gotten a little bit out of balance. I am very much of a
conservative, too. I would like to see all containers equal.
No container is being disposed of. It is just being
shoveled around from one place to another. Make all container:
equal by putting some extrinsic value on them, they will all
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come back and then the market place will determine what to do
with them.
Thank you.
THE MODERATOR: Thank you.
Our next speaker is Mr. Ellen Magazine of Fairfax
County, Virginia. Is Mr. Magazine here today?
I understand Dr. Ellis Keystone is not.
All right. We will go on please and hear from
Brenda Moore in place of Mrs. Patricia Watt of the League of
Women Voters of the Fairfax area.
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STATEMENT OF BRENDA MOORE
LEAGUE OF WOMEN VOTERS - FAIRFA)( AREA
MS. MOORE: Thank you very much.
My name is Brenda Moore and I am speaking for the
League of Women Voters of the Fairfax area. I was hoping
Mr. Magazine would speak for us a little bit, but I will
probably cover the Fairfax area situation.
You are doubtlessly aware that on September 1st of
this year Fairfax County became one of the increasing numbers
of states and localities to enact beverage container deposit
legislation.
At least five states and seven localities have
adopted such a measure. The growth of this phenomenon is due
to the gathering public awareness that convenience has its
price and that it is more than we are willing to pay.
I would like to enumerate for you some of the
difficulties encountered in Fairfax County as a result of
being the only jurisdiction in the area to have a container
ordinance in effect, and to emphasize the benefits which would
be achieved if such legislation were approved on a national
scale.
First, the difficulties, as evidenced in Fairfax
County, that will be seen as these problems arise as a result
of Fairfax County being surrounded by jurisdictions which
have not yet enacted container legislation.
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Number one. Solid Waste reduction. It is too soon
to tell, but it is likely that with legislation on a
strictly local basis, the full potential for solid waste
reduction will not be realized. Legislation enacted
piecemeal does not encourage conversion to a refillable/
recyclable system. Throwaways, after return to the retailer,
will continue to end up in the dump.
Federal legislation will provide an incentive for
widespread changeover to the refillable/recyclable method.
Thus, — would make it more advantageous for the distributors
:o eliminate the one-way bottle relieving pressures on
Land fill areas.
Differing ordinanaces is a second problem. In the
Washington metropolitan area four jurisdictions have
approved container legislation. However, each ordinance
differs in some aspect from the others, resulting in confusion
to the consumer and difficulties for the industry.
Federal legislation would standardize requirements
and might be expected to provide the impetus for use of
:ertain certified containers, such as has been successfully
ised in Oregon and which reduce handling problems for retailer
ind distributor.
Problems of jurisdiction. In Virginia, it has not
ret been established whether control of beer containers is a
.egislative function of local governments, or whether
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regulation of such containers is a responsibility of the
state alcoholic beverage control board. Loudin County, I
believe you heard from earlier, is going to be controlling
beer containers and they might be taken to court.
Federal legislation would clarify once and for all
which containers are or are not covered. Since beer
containers make up some 75 percent of container litter, it
is necessary that such legislation include them.
Number four: court costs. Localities approving
container legislation can expect to be taken to court by the
beverage industry, as has Fairfax, Loudin and Montgomery
County in this region.
The likelihood of this happening is a powerful
disincentive to any jurisdiction which might otherwise favor
adoption of such ordinances. And I know for a fact that
there are several in Virginia which are considering them,
but the court costs are a very big disincentive.
Federal legislation would remove this burden from
local jurisdiction.
Number five: consumer difficulties. While the
beverage industry knew for 18 months that the Fairfax County
ordinance would become effective on September of this year,
no preparations for compliance were made. It also appears
that the provision of approved containers has not moved along
as fast as could be expected.
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And I believe you heard about the pop top problem.
They would not provide cans until they realized that, you
know, this ordinance would be effective.
If this type of legislation would be adopted
nationally, the aura of inevitability lacking in a piecemeal
approach would surely lead to quicker adaptation by the
industry in the spirit of the law.
Number six: fiscal effects. Since the industry
has been slow to adapt and to provide all previously
available beverages in approved container types, there has
been a tendency for stores in other nearby jurisdictions to
compete for the Fairfax County resident's soda dollar.
It is not knownwhether this competition will result
in any noticeable effect on county revenues. Should such an
effect occur, it would serve to penalize the county for
facing up to the problem of limited resources in an
admirable manner.
National legislation would treat all jurisdictions
equally. The benefits of beverage container deposit
legislation are many. Its primary objective is to reduce
energy and resource waste and to obtain a decrease in solid
waste production.
Litter reduction is another happy by-product. But
the full potential for achieving these savings can only be
realized in federal legislation.
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The savings are diluted by a piecemeal approach
and do not necessarily accrue to the locality enacting the
legislation but rather to the nation as a whole. It is,
therefore, fitting to approach this problem from a national
standpoint.
The fact that local jurisdictions are increasingly
giving consideration to such action shows the growing public
awareness and sensitivity to the mounting problem of limited
resources.
The excessive use of energy in materials inherent in
a throwaway system, a viable alternative 20 years ago, is
surely an anachronism today. To quote testimony we have
given before the Fairfax County Board of Supervisors,"a
returnable system encourages recycling of metals, saves
energy and materials, reduces pollution caused by production
of new containers, reduces litter, lessens the load on
solid waste management, we believe creates jobs. And we
also still believe it is cheaper in the long run."
Thank you.
THE MODERATOR: Thank you, Ms. Moore.
Are there any questions? Yes, sir.
COMMERCE: I wonder if you folks in Fairfax are
making any plans or have plans to keep an eye on what is
happening to prices as a result of this program.
MS. MOORE: I know that I will be for the League.
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I believe there was a. League study several years ago that did
a nationwide study of prices of returnable containers as
opposed to throwaway containers. And at the time
lower.
And I know in my studies they have been lower up
until recently. There has not been a drastic change presently
that I have seen. It is too soon to tell.
INTERIOR: Well, can you tell me in terms of recent
newspaper ads what the price of an eight-pack of —pick it —
Coca-Cola, Pepsi Cola or something like that has been?
MS. MOORE: No, but I can tell you beer prices.
INTERIOR: Well, let me tell you. It has been $1.59
an eight-pack, with the possible exception of Seven-up and I
recall that as being considerably lower in Fairfax.
Whereas, the same type of beverage on sale in a
non-returnable six pack in my neighborhood is $1.09. Now,
I will admit to you that I recognize the possibility that
somebody is just playing with the system right now. But
there is at least some initial indication.
You know, it could be that the distributors are
facing higher initial costs, start-up costs. It could be that
their — you can make any kind of interpretation that you
want. And that is why the price at least appears a little
ligher at present.
But at least in terms of Drug Fair and Dart Drug ads
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that I have watched, those are the prices that I have seen.
MS. MOORE: Well, I think this has only been in
effect for a little over a month now. And I think it would be
too early to make a comparison.
THE MODERATOR: Thank you, Ms. Moore.
Our next speaker is Mr. Brian Blockwelder of the
Environmental Coalition of South Carolina — I am sorry.
MS. ZUCKERMAN: My name is Judy Zuckerman.
Mr. Blockwelder asked me to present his testimony which I
will submit for the record, but I have my own testimony,
if I could give it now.
THE MODERATOR: I see. All right, Ms. Zuckerman.
You are from the Neighborhood Recyclers?
MS. ZUCKERMAN: Tkat is right.
THE MODERATOR: You sneaked in early here. Go
right ahead.
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STATEMENT OF JUDY ZUCKERMAN
NEIGHBORHOOD RECYCLERS
MS. ZUCKERMAN: All right. My name is Judy
Zuckerman and I am the Director of Neighborhood Recyclers
that is part of the Dupont Circle Neighborhood Ecology
Corporation's effort to make citizens more aware of what they
can do as a part of the neighborhood to make things more
environmentally sound.
We are a non-profit grass roots organization formed
by area residents a little less than a year ago who felt that
recycling would be a public education project which would
provide a source of revenue for re-investment in other
neighborhood conservation and development projects.
Currently, we are collecting aluminum, newspapers
and hope to expand to glass in the near future.
You may be wondering why a recycling organization
should be in favor of a national bottle bill. We make our
money from people bringing us their cans and bottles.
If the national bottle bill was enacted, they wouldn't
bring them to us, they would bring them to the supermarket
and get their deposit back.
But Neighborhood Recyclers is in favor of a bottle
bill. We are just a small group trying to get area residents
into a recycling mode and educate the residents as to the
ways and hows of recycling.
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We'j»ow that recycling centers, even on a national
scale, cannot effectively deal with this aspect of the solid
waste problem. The amount recycled, the amount that they
go out of their way to bring to us and give to us for free
cannot possibly be as great as it would be if returning
containers was a national policy.
The economic incentive to recycle their beverage
containers is not nearly as high as the incentive to bring
containers back to the supermarket. Even aluminum, the most
valuable container material to recycle, is only worth about
three-quarters of one cent. Glass brings in even less.
Bringing the container back to the store gives them
back their five cent deposit. Obviously people, as well as
scout groups, et cetera, will have a much greater economic
incentive to collect containers and bring them to a store
to have it refilled rather than to bring it to a recycling
center.
The average person purchases about 300 beverage
containers in a year. They could get five cents each, the
yearly savingsis $15 per person.
If they brought those same containers to a
recycling center and even if they got money for it, which
would be three-quarters of one cent for each, they would have
only earned $2.25.
And convenience is also a great factor as to why
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recycling cannot possibly be as effective as re-using
containers or bringing them back to the supermarket.
People have to go out of their way to get to a
recycling drop-off center. This may cost the consumer a
great deal in time, efforVt and transportation. The woman
u^j GlasSiOan
who ts left from Maryland, Betsy Giauaaur, was complaining
that there weren't any recycling centers in her area.
We are also an exception in that we are in the
Dupont Circle area and we operate a recycling center, but
there aren't enough of them.
Bringing the containers to the supermarket on the
same trip as going to the store to shop can easily become a
part of the daily lifestyle of the average consumer. It
won't be a question of, oh, I have to bring it to the drop-of
site. They are just going and it is something that they
just, you know, sort of as a habit. They just do it.
And it can become a much greater part of what they
now normally do. So we, as a recycling group, do want to
see the national bottle bill enacted.
We know that we, and groups like ourselves, cannot
ever be enough in the years ahead to deal with the problems
of dwindling raw materials and energy simply because our
volume is not great enough to off-set even a fraction of
these problems.
We are only a start in the process to educate
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people about conservation and make them aware of how they
can lead more environmentally sound lifes.
Recycling centers can be most effective as a
compliment to people returning beverage containers to
retail stores. But a national policy offering the alternative
to returned containers with an economic incentive attached,
is the next logical step to make citizens more aware of
what they can do themselves to lessen their environmental
impact as well as dealing creatively with a serious litter
problem and raw materials and energy shortages we are
faced with.
Thank you.
THE MODERATOR: Thank you, MS. Zuckerman.
Is there any question or comment?
Yes, sir.
MR. STEIGER: I am Bill Steiger from Treasury.
You made a statement to the effect that people didn't
return these because it was inconvenient.
MS. ZUCKERMAN: Yes.
MR. STEIGER: And that they didn't want to take the
time to do this. Obviously, people place a value on their
time.
MS. ZUCKERMAN: Right.
MR. STEIGER: And the value they place on their
time inasmuch as they don't return bottles seems to be larger
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than the value they place on returning bottles, would you
agree to that? Otherwise, they would return the bottles.
MS. ZUCKERMMJ: No. I think that they would return
the bottles to the supermarket. As I said, I think that
could be something that they can do without very much
inconvenience. They are going to the store anyway, they will
bring it with them.
What IWO.B saying was as recycling centers go,
which is a drop-off site somewhere where they come and there
is a truck and they load it onto the truck, that is what
I see as inconvenience and that is why the volume of these
recycling centers can never be great enough to match having
it at retail stores.
MR. STEIGER: Well, let me ask you: we ha\ean
economic system which places incentives according to price.
If, in fact, the true value of the cost of manufacturing
a bottle, since energy is a subsidized element or price
controlled in every respect, if that were not so and the
price would go up accordingly, would you think that would
be the best way to do it for everyone to make his own
determination on the value of convenience as regarded —
with respect to such things in returning these bottles?
MS. ZUCKERMAN: No, I wouldn't think so. I think
they would have an economic incentive to do it, even if it
weren't a national policy, but I don't think that it can be
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the same volume. I think that once it becomes a national
policy, once there is a bottle bill, it will occur to the
people to bring them back. It will be something that
everyone does and it is sort of assumed that that is what
they will do.
But right now it is not the way that they think
in terms of bringing back their bottles.
MR. STEIGER: Or would it be a national law
imposing the will of whoever passes it on those who don't
agree with it.
MS. ZUCKERMAN: ifcey don't have to if they don't
want to. They can still throw it out, do whatever they
want and scouts will come around and get it from those
people who decided to throw it out.
MR. STEIGER: But at a cost. A fine, if you will.
MS. ZUCKERMAN: Well, yes, but right now we are
all paying a fine in our taxes to have it, you know, picked
up by garbage collection. We are having the fine of not
having — to chose not having the raw materials; strip
mining is something that I don't personally pay a price
for, but other people do.
ANd I think they should have to pay a fine if
they don't want to recycle it.
MR. STEIGER: Thank you.
THE MODERATOR: Thank you, Ms. Zuckerman.
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STATEMENT OF DAVID E. ORTMAN
FRIENDS OF THE EARTH:
MR. ORTMAN: I really appreciate the remarks of the
last speaker.
It is a pleasure to be here finally after wandering
about outside for about a half an hour. I came to the
conclusion that this meeting was about as hard to find as
the returnable bottle.
Before I would begin I would like to respond to
a point that was made by the gentleman from the American Iron
and Steel Institute concerning water consumption.
I believe EPA did a study in 1972 entitled something
like a nine beverage container study in which they looked at
the number of gallons of water discharged through the process
of aluminum, steel one-way bottles and a ten trip bottle. If
memory serves me correct -- and I would refer you to this
study — the ten trip bottle and the aluminum can came out
on either side about equal, about half the water — total
water discharged as the one-way bottles or the steel cans.
For your information.
Mr. Chairman, members of the committee, my name is
David Ortman. I am a research associate with Friends of the
Earth. Friends of the Earth is a national environmental
organization. About 25,000 members.
Before coming to Friends of the Earth here in
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Washington, D.C. I worked for two years in the Northwest
Friends of the Earth office in Seattle, Washington. I
appreciate the invitation to come here this afternoon.
Let the record show that Friends of the Earth
supports returnable beverage container legislation at the
national level. We are tired of litter.
James Kilpatrick wrote in the Washington Star two
years ago that speaking simply as one citizen who is fed up
with litter, the can and bottle manufacturers are fine folks,
but their non-returnable containers constitute an ugliness.
No civilized community should have to tolerate it.
"The most highflown theories get shot down by human
nature. God made tidy people, but God also made trashy peopl<
and the trashy people have the tidy people outnumbered. No
anti-litter laws ever devised will deter the swinish multitudi
from hurling their empty six packs all over the countryside,
but the experience of Oregon with its law on non-returnables
indicates that the conomic pressure of a mandatory deposit
will lessen the evil."
And to that we agree. We are tired of no-deposit,
no-return. According to the Christian Science Monitor,
every American produces about six pounds of trash and garbage
a day. One way to help cut down on this exorbitant waste is
to re-use the millions of beverage containers consumed
along with the contents.
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We agree. Returnable beverage containers by way of
deposit would prevent millions of tons of solid waste from
becoming solid waste in the first place and at the same time
save millions of tons of basic resources, glass,steel,
aluminum, et cetera.
We are tired of billion dollar, thousand megawatt
nuclear plants required to support an energy infrastructure
that contributes to such energy waste by a non-returnable
beverage society.
According to the testimony of the U.S. Environmental
Protection Agency duri ng hearings on Senator Hatfield's
returnable beverage container bill before the Senate
Commerce Committee in May 1975, the manufacture of one-way
bottles and cans wastes the equivalent of the energy needs for
one year of all residents of New York and Chicago. Put
another way, it would be enough energy to meet the combined
yearly requirements of 185,000,000 living in Asia, Africa and
Central America.
Furthermore, we are tired of disception by the
bottle and beverage industry. Their attempts to draw public
attention away from the materials and energy wastefullness
of throwaway containers become upon examination as transparant
as the glass bottle which lies forever on the forest floor.
Resource recovery, they say. All or nothing.
How, may I ask, do we do the inconceivable, that is, complete
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and total resource recovery if we cannot do the conceivable.
Well, we are asking the resource conservation committee to
support and endorse a national deposit law to do the
conceivable.
Let the record show that we support the testimony
of the Environmental Action which has responded in depth
to the questions contained in the meeting announcement.
Today I would briefly like to focus, if I could,
on question number four which is contained in the sheets.
What are the social aspects and consequences of the beverage
container legislation; what sectors of society will be affectel
and specific impact of experiences pertaining to beverage
container legislation, if I may.
Let's look at South Dakota, a state which hasn't
been mentioned very much. A state which illustrates the need
for national beverage container deposit legislation.
For two years while attending high school and
junior college in southeastern South Dakota, I helped set
up a recycling center in the small town of Freeman,
population approximately 1400. Utilizing student labor,
a donated building, a borrowed truck, we recycled glass,
aluminum, tin cans and paper.
The glass, mostly the brown glass made up of beer
bottles and the green glass of pop bottles was trucked to a
glass recycling center south of Minneapolis over five hours
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away.
I discovered later while attending college in
Kansas that Kansas relatives of people in the South Dakota
community having no place to recycle their own material in
Kansas would haul it along in visits to Freeman, 400 miles to
be left off at our recycling center, which was then trucked
another 300 miles into Minnesota, making a one-way trip
of over 750 miles.
Now, that is really a one-way bottle. In 1974
the South Dakota state legislature passed a bottle bill,
similar to Oregon's, to go into effect in July of 1976.
Before that date, however, the legislation was gutted to
provide for either returnable or recyclable containers.
And a postponement of enactment tofl.978.
This means that South Dakota has rejoined the
no-deposit, no-return states, since all containers are
recyclable, even if you have to truck them hundreds of miles
out of state.
These are the social aspects, impacts and
consequences of a weak type of beverage container legislation.
Fortunately, Oregon and Vermont provide us with strong models
of beverage container legislation.
Having lived in the State of Washington for two
years with its, quote, "model litter control act", I can say
that the sooner Washington abandons this approach and adopts
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legislation similar to Oregon's returnable container bill,
the better.
How do these two states with such dissimilar
approaches stand up in terms of litter reduction? Oregon
wins hands down. The Oregon Journal which took a survey of
Washington and Oregon highways has given reports which are
attached to my testimony and in-depth analysis of Oregon's
bill has been done and this information was inserted into
the Congressional record of 18 January 1977 by Senator
Hatfield.
A national container deposit bill would save
resources, reduce litter, save energy, save the consumer
money and create jobs. If it merely did one of these things,
it would be well worth supporting.
Friends of the Earth strongly supports federal
legislation for beverage container deposits. We do not need
more research. We do not need more hearings. We need action.
Thank you for allowing these comments.
Do you have any questions?
THE MODERATOR: Thank you, Mr. Ortinan. Any
questions from the committee? Thank you. Thank you very mucjh
Our nextspeaker is Ms. April Moore — is Ms. Moore
still here? How about a May Moore or June Moore? No?
Okay. We have a couple who are not on the printed
program who still desire to talk I am happy to say. We have
Ms. Ann Gordon of the Environmental Action Foundation.
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STATEMENT OF ANN GORDON
ENVIRONMENTAL ACTION FOUNDATION
MS. GORDON: Hello to the Resource Conservation
Committee.
My name is Ann Gordon and I am reading testimony
written by Diane MacAghern/ who is the Coordinator of the
National Clearinghouse on Deposit Legislation of Environmenta
Action Foundation in Washington, D.C.
Diane could not be here because she is away on a
business trip.
In 1976, a poll taken by the Research Triangle
Institute showed that 73 percent of all Americans endorsed
mandatory deposit legislation.
Later that year, citizens in Michigan and Maine
joined those in Oregon and Vermont in passing beverage
container laws statewide.
This year, 44 additional states are attempting to
implement similar laws, while three counties in the
Washington, D.C. metropolitan area have just passed their own
deposit ordinances. In other words, putting a minimum deposit
on soft drink or beer cans and bottles has become a popular
and accepted means of solving the problems over-packaging has
created on our streets,in our work force and in our pocket-
books.
I welcome the opportunity to address those problems
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and respond to some of the questions put forth by the
Resource Conservation Committee.
As documented by the Federal Energy Administration,
the National Wildlife Federation and numerous consumer and
public interest groups, a return to returnables can save
81,000 more barrels of oil per day, create between 80,000
and 118,000 additional jobs, and save consumers as much as
$1.8 billion annually.
Legislation accomplishing these savings has
already been introduced by Senator Mark Hatfield and
Representative James Jeffords. I urge the Resource Conserva-
tion Committee to support this legislation and recommend
that the federal government develop specific container
legislation accordingly.
Presently, no alternative, including the Washington
State litter tax, reduce the litter or solid waste problem
as effectively as does deposit legislation. The litter tax
proposes to solve the litter problem by taxing manufacturers
and distributors of products found in litter.
But, according to Dr. Carlos Stern, an economist
at the University of Connecticut, this type of litter control
tax actually results in a tax on food and groceries, not a
tax on containers and packaging.
In 1973, over 73 percent of Washington's total
litter tax receipts were derived from the sale of food in one
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form or another — not from packaging sales. It is not
surprising then that a litter study done by the Oregon Journa
last fall found seven and one half times as many containers
on Washington roadsides as in Oregon.
Clearly, alternatives such as the litter tax do not
encourage people to stop littering? only mandatory deposits
provide Americans with a strong incentive to keep their
containers off the streets.
The social aspects and consequences of mandatory
deposit legislation ars as significant as their environmental
ones. Primarily, the legislation reinforces a traditional
American concept that originated 200 years ago — namely,
that of dealing not with the symptoms of a problem, but,
more importantly, with its cause.
Deposit legislation reduces the litter at its
source: the law doesn't merely move it around from place to
place as it does a litter tax or other litter pick-up
efforts.
A negative aspect of the deposit legislation
controversy is that it often pits thousands of earnest
citizens against an industry devoted to spending as much as
$15 million a year on advertising campaigns intended to
confuse voters and legislators.
A return to returnable nationwide will re-focus
all of our efforts to improve the environment by creating an
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accurate understanding of an responsibility for the solid
waste we create.
The economic aspects of beverage container laws are
equally important. According to the Federal Energy
Administration, if deposit legislation is implemented by the
late 1970's, a net increase of 118,000 new jobs will have
been created by 1982.
As for direct consumer savings, a recent study done
by the Vermont Agency of Environmental Conservation indicates
considerable savings to consumers and beverage manufacturers
alike.
Based on actual beverage prices in Vermont, a family
that buys returnables can save an average of $60 per year, a
significant amount at a time when inflation has severely
stretched family budgets.
Savings for distributors are significant, too.
Spokesmen for Coca-Cola of Barre, Vermont testified before a
Vermont Legislative committee in May of 1974 that by switching
to refillable bottles, the company experienced a net savings
in operating costs of 52 cents per case of soda. Clearly,
it is to the best economic interests of both consumers and
manufacturers to return to returnables.
In view of these statements and the plethora of
studies that exist concerning deposit legislation, it seems
that action, not further study, is now required. The only
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relevant study I foresee would involve documenting the effects
of deposit legislation in Michigan, the most industrial state
yet to pass a mandatory deposit law.
Yet, the longer national deposit legislation is
postponed, the more confusing it becomes to implement in
the future. And I am convinced at least two more states will
pass deposit legislation by the end of 1978 — several more
the following year and that we will have a national deposit
bill soon after — if only because the industry itself will
be unable to do business in a checkerboard fashion across
the country.
I strongly encourage the Resource Conservation
Committee to recommend national mandatory deposit legislation
Thank you very much.
THE MODERATOR: Thank you, Ms. Gordon. Are there
any comments or questions from the committee?
Yes, sir.
INTERIOR: Does Environmental Action support a
preemptive bill?
MS. GORDON: I am sorry. But this isn't my
testimony. As a matter of fact, I don't even know what a
preemptive bill is.
INTERIOR: Well, a preemptive bill is a bill that
says that deposits shall be this, the place where it shall be
placed shall be this and that no state or municipality —
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MS_ GORDON: 1 think Pam, perhaps, would do better
to respond to that.
VOICE: The Environmental Action does support a
federal preemptive bill so that we can have uniformity among
the states.
INTERIOR: Okay. Thank you. I have one other
very brief question. You stated that — or the testimony
stated that I think you said 80,000 barrels of oil —
MS. GORDON: 81,000 more barrels of oil per day.
INTERIOR: Okay. On what basis is that? What
return rate and what product mix is that based on?
MS. GORDON: Okay. Diane didn't tell me that, but
VOICE: Let me respond to that.
THE MODERATOR: Okay. Pam, go to the microphone,
would you please, Pam, so the recorder can hear it.
MS. DEUEL: I believe those figures come from the
study called Energy and Economic Impactsof Mandatory Deposit
Legislation finished by the Federal Energy Administration
In September 1976.
INTERIOR: In other words, that assumes the
scenario of a 90 percent return rate?
MS. DEUEL: That is right.
INTERIOR: Twenty percent aluminum cans, 80
percent returnable bottles?
MS. DEUEL: It is not broken out by kind of can,
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I believe. It is metal cans.
INTERIOR: All right. Thank you.
MR. STEIGER: I have one question, if I may.
THE MODERATOR: Yes, sir.
MR. STEIGER: If I understood you properly -- and
I am Bill Steiger from Treasury — first let me say you
read it very well and it was very well delivered. But you
did say that a family in Vermont could save $60 a year,
I believe, if the law were enacted; is that correct?
MS. GORDON: I think it was that. I can check it.
THE MODERATOR: Yes, it was that.
MR. STEIGER: Just some quick calculations. If you
say, if a can costs 40 cents, which maybe, maybe not, and
you save two cents, you save five percent. And that would
mean that the sales of the family would be $1200 a year.
Does that sound logical?
ckctk
MS. GORDON: No, but I am not sure I can — on that.
MR. STEIGER: You know, save four cents a can,
at ten percent, it would be $600 a year. That just seems a
little high fco me in the average expenditures for food and
beverages and that sort of thing.
THE MODERATOR: Very thirsty family.
MS. GORDON: If you want, I can find out where
Diane got all that figures and send it to the Commission,
the committee.
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MR. STEIGER: Well, I was just wondering. It is
not that important.
MS. GORDON: Okay.
MS. DEUEL: It would be saving $15 per person if
they brought back all their beverage containers. That is
an average of 300 beverage containers per year and if they
get back their nickel for each one, that is $15 a person,
so an average family —
MR. STEIGER: Oh, but really since they put up the
deposit, they are just getting refunded what they have
already put out. That is right. Okay.
MS. DEUEL: — she is saying that if the —
to pay the deposit, they would then return it.
MR. STEIGER: Oh, I got the impression it was a
savings due to a price reduction through the use of
returnable containers.
THE MODERATOR: All right. Our next speaker is
a former aide to Governor McCall of Oregon, Mr. Kestler Cannon.
Is Mr. Cannon here?
All right. One more. Ms. Nancy Kourtjian of
Earth Alive, Inc.
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cp75 1 STATEMENT OF NANCY KOURTJIAN
EARTH ALIVE, INC.
MS. KOURTJIAN: Mr. Chairman, members of the
Committee, I am here today to represent Earth Alive, Inc., an
environmental group in Farmington Hills, Michigan. I have
been involved in many kinds of recycling: cans, aluminum,
newspaper, household cardboard and glass.
At present, our group handles only glass. We
recycle approximately nine tons every month and we ship it to
Owens-Illinois in Charlotte and are paid $27 a ton.
We expect our volume to drop 50 percent in the fall
of 1978, when the mandatory deposit legislation takes effect.
This measure was passed as a referendum, as you have all
heard, by a two to one margin last November.
We urtkge the federal government to develop a specif:
container legislation which would supercede state law, with
one qualification, that it is not a gutted law, as was
referred to in South Dakota, in reference to South Dakota:
that would not be acceptable.
A federal legislation would greatly simplify
handling and refunding. We do not feel that there should
bs compensation to workers or industries. However, a two to
three year phase-in period should help minimize economic
dislocation and allow for some diversification.
The manufacturer is the proper point of origin for
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the deposit. Unrefunded deposits could be allocated to a
fund for source reduction projects.
The negative economic impact on industry was greatly
exaggerated during the campaign in Michigan. For example,
Owens-Illinois claimed during the campaign that they would
be forced to close their Charlotte plant if the proposal
passed. Actually, they have hired new employees.
There are only positive environmental impacts: a
saving of considerable energy and resources, and a reduction
of solid waste, industrial and visual pollution.
To the consumer, there is only a positive economic
impact: the price of beverages in returnable containers
goes down. Whereas, with a litter tax or the Clean Community
System backed by the container industry, the price goes up —
passed on to the consumer by the retailer.
Moreover, when there is no value to the container,
there is no incentive to return it.
We suggest a charge of ten cents on non-stendardizec
containers and five cents on standardized. Also, we recommenc
a ban of flip top cans. The deposit charge should be large
enough to assure return of the container.
Standardization simplifies handling and reduces
costs. A flip top ban forces use of the new button-down top
now used in Oregon.
In Michigan, the state organization of pediatricians
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contributed much money and time to the bottle bill campaign
in order to eliminate this serious hazard for both children
and adults.
We would like you to consider the phenomena of the
campaign in Michigan. A great majority of the general public
wanted and supported a mandatory deposit system, as indicated
by both public opinion polls and the results of the
referendum.
There were many reasons. They were disgusted with
litter and they realized that an educational approach — such
as the pitch-in campaign promoted by Keep America Beautiful —
and bankrolled by the container manufacturers — was
ineffective and a long-term solution at best.
They realized that they were deprived of a choice,
not by governmental regulation; but by container manufacturer!
who virtually eliminated returnables from the market.
A consumer must drive for miles to find lower cost
beverages in returnable containers, and then, have a choice
limited to two or three brands. Whereas, a mandatory
deposit allows freedom of choice to use more expensive throw-
aways, for those desiring the convenience.
The people realized that the two million dollar
media blitz was funded by the container industry, wholesale
food distributors and convenience packaging promoters.
This was a flood of misinformation and often
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misleading statements. The public was also made aware that
this same group backed a powerful lobby which had blocked
similar measures in the state legislature for many years.
Last, but not least, many more citizens were
convinced of the need to save energy and resources, and began
to question the throwaway ethic.
The Michigan United Conservations: lubs spearheaded
the drive by establishing the Help Abolish Throwaways
campaign. Earth Alive was only one of nearly 100 non-profit,
civic minded organizations who united to bring about a
citizen's war against waste.
We feel that federal legislation modeled after that
which is working in Oregon and which will work in Michigan
next year should be passed now with no further studies needed.
Future consideration of other types of containers
and contents would be worth doing. Examining the European
experience could lead to future improvement and amendment of
the legislation. The social, economic and environmental
benefits of the system should start without further delay.
All studies made by impartial investigators, such
as federal and state agencies, including many thorough
reports by the EPA, newspaper and magazine surveys, and work c(one
by citizen groups, found the positive aspects of mandatory
deposits on beverage containers far outweigh the negative.
Therefore, let's get on with it.
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cp79 1 THE MODERATOR: Thank you very much. Are there
any questions?
Yes, sir.
MR. REYNOLDS: I am Pete Reynolds with the
Department of Commerce and I am interested in the economic
impact that could result from such legislation as we are
discussing.
You made such an unusual statement that I thought I
would ask you to clarify it. You said that a certain bottle
manufacturing plant said that they were going to close if
the legislation was passed, it was passed and you said they
hired new employees, which I assume would be an expansion.
MS. KOURTJIAN: Well, they hired new employees.
I have no idea in what usage —
MR. REYNOLDS: Well, did anything else change?
Do you have any explanation for that?
MS. KOURTJIAN: All I know is I had appeared at
various meetings and I had heard various members of Owens-
Illinois — I believe this was on the media, also — I am
sure that this was just an independent statement that I heard
that they would have to close down their Charlotte, Michigan
plant if the bottle bill passed. It would be so drastic a
change for them, well, the bottle bill passed.
Now, it is not in effect. That is true. But as of
now, they have hired new employees and that doesn't seem to
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me like they are expecting to have a great deal of problem
there.
MR. REYNOLDS: You mean an expanded labor force.
MS. KOURTJIAN-. Yes. That is right.
MR. REYNOLDS: Not merely new employees?
MS. KOURTJIAN: No, they didn't just fire some
and hire others. It was — they have added employees I
should say.
MR. REYNOLDS: Well, that is certainly an
unusual situation.
THE MODERATOR: Yes, sir.
VOICE: I guess I would like to make a point
and then ask a question.
They have certain commitments that they have to
meet to supply glass, I would imagine, until the bottle bill
becomes effective in 1978 — it is December 31st; isn't it?
MS. KOURTJIAN: November.
VOICE: November 1978. That means they have got
about a year of commitments left. And I would be surprised
both from a contractual standpoint and from an economic
standpoint in terms of amoritization of the equipment •
if they would start to shut down the facility at this point.
MS. KOURTJIAN: It is too soon to judge, you are
saying?
VOICE: Right. I am curious, though. Numerous
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people have indicated that industry is misleading the
general public. Now, industry is going to and has submitted
numerous pieces of information and statements to the
committee.
Can you give me some examples of some things that
we might expect to see which you consider misleading?
MS. KOURTJIAN: The things that I consider
misleading are not in your information, at least, I can't
judge on that. I am going by the media blitz which reached
the people of Michigan and to my amazement and to many others,
they did not believe.
These were the kind of television commercials
that led you to feel that you were going to stand in line
for hours, which I understand is not the case in Oregon,
which led you to believe that you were going to pay a great
deal more. The inference was that you were going to pay a
great deal more for bottles in returnable containers which is
not true.
Now, they didn't come out — they didn't claim
that this was partially included in the deposit, but the
inference was there and this is what I meant by misleading.
And this, I feel, is what caused — I mean this is
why I was surprised at the results of the campaign. You
would hear commercials several times a day with full-page
ads in the newspapers. You would have newspapers with ads on
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every other page. It was an amazing campaign.
THE MODERATOR: Thank you, Ms. Kourtjian.
All right. I believe we have one final speaker
with a formal statement, Ms. April Moore, who was not here
earlier has arrived.
Will you please give your statement, Ms. Moore?
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STATEMENT OF APRIL MOORE
CONSUMER ADVOCATE
MS. MOORE: My name is April Moore. I live in
Washington, D.C. and I am a longtime consumer advocate. I
am among the 73 percent of Americans who favor national deposijt
legislation.
Though usually discussed in environmental terms,
the bottle bill is a critical consumer issue as well for the
following reasons:
And Environmental Protection Agency survey shows
soft drinks in non-refillable containers cost consumers almost
one and a half times as much as soft drinks in refillables.
Taxpayers will save money with deposit legislation.
EPS estimates eight million tons of beer and soft drink
containers were thrown away in 1976, which is 8.5 percent of
the manufactured goods in the waste stream. Tax dollars
were spent to pick these cans up, haul them, and put them
into already overburdened and expensive municipal landfills.
With a 72 percent reduction in beverage container
litter in Oregon the year following the enactment of that
state's bottle bill, it is reasonable to expect that a
national bill will significantly reduce litter nationwide,
resulting in savings to all taxpayers.
The Federal Energy Administration estimates that
between 80,000 and 118,000 additional jobs will be created
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if the United States adopts a national beverage container
deposit law.
FEA also estimates that a return to returnables
would save 5.2 million tons of steel and 500,000 tons of
aluminum in addition to energy savings equivalent to 29
million barrels of oil per year — resources paid for by the
taxpayer.
I strongly urge the Resource Conservation Committee
to recommend that President Carter endorse national deposit
legislation. Clearly, most Americans want it. Any questions
THE MODERATOR: Thank you.
Are there any questions from the committee?
INTERIOR: Where did you get the number of 73
percent of Americans want deposit legislation?
MS. MOORE: This was an opinion research poll.
Do you have the figures on that? Opinion Research Corporatio:
I think it is, which is a part of the EPA study.
MR. STEIGER: I believe that was part of an FEA
study, about two years ago from Opinion Research Corporation.
Mike, do you know?
INTERIOR: Let's see. I had another question.
I can't remember what it was. Forget it.
THE MODERATOR: Thank you very much, Ms. Moore.
Now, if anyone has any final comment or question
that was not scheduled, finally you have your chance.
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MR. McCUCHEON: If I might just a minute — I am
Andy McCucheon with Reynolds Metal Company and I wanted to
thank the gentleman from Interior for responding to the
comment that was made about aluminum in Dr. Testin's absence.
His comments were entirely accurate.
One amplification of that would be that in the
present system today, the 17 cents a pound goes to — the
public brings the cans into a recycling center. Under a
deposit system, we would still continue to pay probably at
17 cents a pound or more upward, but it would go into the
system rather than going to the public. And I just wanted
to make that distinction.
THE MODERATOR: Thank you, sir.
All right. Does anyone have any further comments
to make?
Yes, sir.
MR. MITCHELL: My name is Tom Mitchsll and I am with
the Glass Packaging Institute. I just wanted to comment
on that 73 percent preference.
The same poll — and by the way, the base materials
have never been made available to my knowledge. We have no
idea what context those questions were asked, the validity of
it or anything — but in that same poll, a greater percentage
of people said they had refillable packages available to
them where they shopped and there seems to be some internal
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inconsistency in the poll in that you would expect that, of
course, somewhere along the line you would have a much higher
percentage of refillable containers being bought.
I have one procedural question, though. I was
wondering when the transcript of today's hearing is going to
be available.
THE MODERATOR: Well, we hope to have it available
in about three weeks. That would not be the final printed
transcript, but it would be printed, our first printing —
MR. MITCHELL: The transcript will not be available
until after the written comments are asked to be in; is that
right?
THE MODERATOR: Well, the written comments are to
be in on November 2nd. We will try to get you a transcript
by then. We will get you one by then, Mr. Mitchell, if we
have to make it like the monk does in the Xerox ad.
MR. MITCHELL: How else would you do it?
THE MODERATOR: By hand.
Yes, sir?
VOICE: I am sorry that Ms. Moore isn't here to
hear this, but she indicated that deposit legislation will
save us 5.6 million tons of steel and a half a million tons of
aluminum. And that is true provided that either all of the
cans that are produced are recycled or there are no cans
produced.
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In other words, it allows for zero cans to go to
any waste source, whether it be the dump or any other place.
THE MODERATOR: All right. Any more comments or
questions, please.
Do you, Ms. Brown, or any other member of the
committee have any final statements to make before I
make a couple of mundane announcements?
THE CHAIRPERSON: No. Other than to thank everyone
for coining and for staying for this extended period of time
and for representing your points of view in such an open and
forthright manner and I appreciate it from everybody.
THE MODERATOR: All right. Let me make two
general reminders here.
Any of you who have not left copies of your
statements at the registration desk, please do so either
up front or here at the desk to my right. And I am told
by those who have looked over the registration forms that
many of you have requested copies of the three publications
that we made available here and I just wanted to remind you
if you haven'ttgot them, they are available on the table on
your way out.
Okay. That is it. I thank all of you very much.
(Whereupon, at 5:30 p.m., the hearing was adjourned
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The soft drink and beer industries have undergone rapid technological
changes during the past three decades with respect to packaging. The
returnable bottle had been the only available package until several brewers
began to experiment with steel cans. Consumer acceptance of the new-
can forced the glass industry to develop its version of the beverage can.
The success of the detachable metal opener later eroded the market
recovered by the single fill bottle. Introduction of more attractive glued
seam steel cans, tin free steel cans, and later the lightweight aluminum can
gave the can a heavy share of the beer market. Many new breweries have
can manufacturing facilities as part of the brewery or at least strategically
sited nearby. One of the newest breweries has a local can plant with an
annual capacity to manufacture 750 million two-piece steel cans which use
considerably less energy and material than the traditional three-piece can.
According to the manufacturer, the technological advances in this new
can reduce its energy consumption to the point where it is competitive
with a six-trip returnable bottle. Further, planned design changes in the
steel can combined with a 50 percent recycling rate will cause the steel
can to be less energy intensive than a ten-trip bottle. Currently steel
cans are being recovered at the rate of five billion annually, a number due
to rise to 12 billion a year by the early 1980's.
Since soft drinks are usually produced by local franchises with
multiple flavors, the economics of can manufacturing are not always
profitable to the relatively small volume soft drink producer. About one-
third of soft drink production is packed in cans.
The beverage industries thus have five distinct packaging options: the
traditional returnable bottle and the nonreturnable, the three-piece steel can
and the two-piece can made from either steel or aluminum. Each has
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- 2 -
distinct advantages to fill the varying needs of the beverage industries,
its complex distribution systems and its multiplicity of consumers.
Today, the beverage industries and our employees are being con-
fronted with demands to go back thirty years to the single returnable only
system. While the consumer demands the traditional beverage in an
economical variety of packages and sizes, he also wants such new drinks
as light beer and dietetic soft drinks.
There is no way to respond to all of these requirements with a return-
able only system. At the same time, others demand attention to environ-
mental problems. Legislators and other government officials concerned
with public policy issues have attempted to analyze the often confusing
assertions and data concerning beverage containers and litter, energy,
materials and solid waste. Analysis of those data and resolution of con-
flicting positions is difficult because tbe beverage and packaging industries
are very dynamic, distribution systems are complex and consumer behavior
so unpredictable.
The steel industry thinks that our mobile society is well satisfied
and best served by allowing all packaging suppliers the opportunity to
compete for consumer acceptance in the marketplace. Our industry does
not agree that restrictions on the sale of non-refillable beverage containers
will solve any environmental or resource conservation problem. To the
extent that it may ameliorate one aspect of a single problem, the likelihood
is that greater damage will be done to our consumers, employees and our
industry. No unimpeachable study supports restrictions on beverage con-
tainers to solve any environmental or resource conservation problem or
problems.
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The steel industry deals in a constructive fashion with its share
of the four distinct concerns raisfed by proponents of restrictive beverage
regulations.
The Litter Issue_
The only comprehensive national litter study was done nine years ago.
Proponents invariably use poor or invalid data to prove their proposition
that restrictions on beverage containers will solve the litter issue.
The steel industry helped fund the development of and supports the
proven Clean Community Systems. This new rapidly growing program
addresses the total litter spectrum successfully. The following twenty
CCS cities have achieved the following sustained reductions of litter:
CCS Cities
Charlotte, N. C.
Macon, Ga.
Sioux Falls, S. Dak.
Tampa
Reno-Sparks
Evansville
Grand Prairie, Tex.
Atlanta, Ga.
Monmouth, 111.
Richmond, Va.
St. Paul, Minn.
Toledo, Ohio
Little Rock, Ark.
Rome, Ga.
Kansas City, Mo.
Indianapolis
Montgomery, Ala.
Charlotte, Mich.
Cranston, R. I.
Hayward, Cal.
% Reductions
6,7. 1
58. 0
76.7
67.0
73. 0
48. 0
62. 0
59. 0
29.8
23. 0
25. 0
36.9
35. 5
15. 6
12. 0
29.7
57. 0
9. 5
12.7
10. 6
Months
Operatinj
36
36
36
36
30
15
15
1Z
12
12
12
12
9
8
6
6
6
5
2
1
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These data are corroborated by the Photometrix Index: developed
by the American Public Works Association. The Index is the most
accurate indicator of the visual impact of loose waste yet developed as
it uses photographs of randomly selected sites for accurate data. In
addition, 23 other cities have taken initial data of accumulations of litter
against which CCS committees will begin their sustained campaigns.
The Solid Waste Issue
Solid Waste Recovery and Resource Conservation have been an
integral part of the technology of the steel industry since it was founded.
In 1975, 45% of the iron used in steelmaking was recycled material. The
recycling of a maximum amount of steel scrap has long been a concern of
the steel industry.
The iron and steel contained in municipal wastes have been a particular
concern as this material has in the past usually been buried in sanitary
landfills with organic garbage. This has been true although simple
technology in the form of magnetic separation has long been available to
remove the steel scrap. Approximately 40 cities are presently using
magnetic separation.
To help solve this problem the steel industry is vigorously supporting
development of municipal recycling systems which process wastes for
energy and materials recovery. The American Iron and Steel Institute
and the United Steelworkers of America were charter members of the
National Center for Resource Recovery which for seven years has had a
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key role in advancing the technology of recovery of our wastes. The
steel industry makes a unique contribution to those cities which want to
magnetically separate ferrous scrap (averages about 8% of the total refuse). It
has taken an activist role in finding markets for recycled cans and developed
new ways to use them in blast furnaces, as well as steel furnaces. Steel
has also sponsored university research and development work with major
auto companies toward increasing usage in the nation's foundry industry.
Resource Technology Corporation, a pre-eminent consulting firm, is made
available at no charge to consult with any governmental body on markets
and equipment for ferrous recovery.
In addition to the several major cities which have been processing
their solid wastes for energy and materials, more than two dozen are
under construction and an equal number have made firm commitments to
proceed to recycle their wastes. Almost a hundred other governmental units
are actively assessing resource recovery as an alternative to their present
techniques. The steel industry monitors each of these developments, com-
piles their progress and annually publishes this information.
Given the relatively short time since passage of the Resource
Recovery Act and the long leadtime required to plan these complex, new
systems, the steel industry believes that positive efforts to process the total
municipal solid waste stream, resource recovery, is the appropriate route
to go.
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1. The Resource Conservation Committee (RCC) should make no_
recommendations on Federal beverage con tainer legislation. The practical
impact of such legislation to the steel industry is that compulsory deposits
eliminate steel cans from the marketplace.
Restrictions on beverage containers were first enacted in Vermont
in 1954 and allowed to lapse three years later. During the past eight years
hundreds of proposals which would tax, ban or require deposits on some or
all beverage containers have been introduced. Members of the U.S.
Congress and staff, state, county and municipal legislators in every state
have also considered these measures. Three states have enacted container
measures, two of which are in effect while the citizens of two states voted
to support mandatory deposits in 197&. In the meantime five states have
acted to address the litter issue comprehensively: California, Colorado,
Hawaii, Virginia and Washington. Thus-j 10 states have taken action and
evidence no need for a federal initiative.
The Congress has considered beverage container legislation in some
detail. Hearings were held in the House in 1970 and several times before
the Senate Commerce Committee. The Senate Public Works Committee and
the full Senate considered mandatory deposits in 1970, 1973 and 1976 when
it considered the Resource Recovery Act (1970), emergency energy legis-
lation (1973), and RCRA (1976). The Ways & Means Committee has
considered a beverage container tax and two different subcommittees of the
House Committee on Interstate and Foreign Commerce have considered
beverage container restrictions for several years.
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The only plausible role for the Committee to take concerning beverage
containers is a presentation of the facts to the public and a duty to address
the legislative mandate of the RCC in toto, not a small subset of the solid
waste problem which already has received unprecedented public attention.
2. RCC has not specified the problem or problems which the guidelines
are meant to address. The typical problems needing solutions advanced
by proponents of beverage container legislation are: litter, energy,
materials, and solid waste. The steel industry agrees that each of these
is an area of concern but feels that there are fair and reasonable techniques
to deal with them. Most importantly, we feel that there is no evidence to
prove that any type of restrictive container technique is likely to solve any
of the four. It is more likely to exacerbate one or more problems as well
as cause other social and economic problems to offset any reasonable, but
partial solution to any of these four distinct problem areas.
The alternatives to disruption of the complex and dynamic beverage
packaging and distribution systems are to rely on the first principle of
RCC as set forth in the April 1977 Implementation Plan -- The Free Market
Principle. Steel, aluminum and glass and to some extent paper and plastic,
actively compete for the brewer and soft drink industries' business. They,
in turn, offer a variety of packaging, size and type to their myriad
customers which range from super markets and convenience stores to vending
machines at swimming pools and motels. Two of numerous illustrations
show the virtues of a free market: canned private label soft drinks are the
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lowest priced in those stores which offer them. Mandatory deposits could
eliminate this option available to the consumer. Cans are the most
efficient package for both the beer and soft drink industries. They fill
faster, take up less space and weigh less in the entire distribution system,
do not break and require less manpower to process. The prospect of RCC
eliminating the wholesome competition among the steel, aluminum, glass
and can industries in favor of a market dominated solely by the returnable
bottle is inconsistent with adherence to RCC's free market principle.
Industry and labor have worked diligently to develop and fund the
Clean Cities System (CCS) and resource recovery systems. CCS has
made dramatic impacts on the total litter stream in more than 70 cities
throughout the nation. Container restrictions ignore the totality of litter
by focussing solely on the beverage container.
Resource Recovery has made significant .strides in the seven years
since Congress had the foresight to enact the Resource Recovery Act of 1970.
More than a dozen comprehensive recovery systems are under construction
and several dozens have all but completed the 2-3 years preliminary work
before beginning construction within the next year.
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- 10 -
Some 40 additional cities and counties have been recycling
their steel cans and other ferrous products. These range from Great Falls,
Montana and Brown County, South Dakota to Sacramento and Houston.
The steel industry has an aggressive and successful program to encourage
and consult with any governmental jurisdiction which wants to generate
revenues from ferrous waste.
Our record and that of industry in general in promoting the 1970 and
1976 Congressional mandate to advance the recovery of our resources has
not been shared by EPA. Congress thus, saw fit to take this key role from
EPA and give it to the Department of Commerce. The Resource Recovery
Act directs the Department of Commerce to "encourage greater commer-
cialization of proven resource recovery technology by providing:
1. accurate specifications for recovered materials;
2. stimulation of development of markets for recovered materials
3. promotion of proven technology; and
4. a forum for the exchange of technical and economic data relating
to resource recovery facilities, "
We would urge that EPA address the totality of the solid waste stream
instead of unreasonably belaboring the beverage container. Of some thirty
EPA staff who comprise the Resource Recovery Division, at least four
professional staff with clerical support have spent a heavy majority of their
time during the last several years on the beverage container issue.
Congress specifically called for 20% of funds appropriated for the
Resource Recovery Act during the fiscal year just ended September 30, 1977
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to Resource Recovery and Conservation Panels to help the states comply with
the Act. EPA has apparently ignored the law by providing no funds in fiscal
year 1977.
3. For the reasons cited earlier, AISI does not think that the RCC or EPA
has a proper role in developing beverage container guidelines for the states.
AISI feels that RCC and EPA should administer the laws that Congress has
enacted. Proposals to enact Federal container legislation fall outside their
competence.
4. The social aspects of container legislation affect the industries, their
employees and citizens at large. It must be kept in rnind that no major
population center has enacted legislation. The results experienced in
Oregon and Vermont cannot be projected as typical of populous regions.
They include the following:
Emp1 o ye e s Industries Public
- unemployment - unfair competition - weight
- forced retirement - increased equipment - space
- dislocation - costs for certain assets; - safety
warehous es, trucks, etc.
- unused capacity - sanitation
- halt in new technology - reduced competition
- possibilities of - reduced range of
shortages brands &: sizes
- possible increase
in beverage prices
- potential loss of
opportunity to buy
imported beers
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- 12 -
Since the various affected industries do not know how the public
will react to restrictions, it is difficult to specify impacts on the affected
parties. Any major reduction of steel can usage will affect employment
in steel millr making tin mill products. This will intensify the present
acute problems of the steel industry. "We do know that a beverage can
plant in Yakima, Washington closed because of lost sales in Oregon and that
Emerald Canning, a soft drink firm in Oregon, went out of business, after
enactment of the Oregon law.
5. Resource Conservation as defined in the Resource Recovery Act is so broad
as to defy direct comment. But it can be said that it was not intended merely
to encourage restrictive container laws. However, the matter of beverage con-
tainer restrictions of any type was before the cognizant committees of the
House and Senate for more than seven years and neither committee considered
the idea worthy of a vote. Moreover, the Senate voted on a mandatory
deposit amendment to the Act and defeated it overwhelmingly. It is clear
that the Congressional intent was not to support any type of beverage
container restrictions.
Compensation for economic losses should reflect measurable losses
which could not have been foreseen by reasonable management. The beverage
and container industries cannot reasonably anticipate what, where and when
proponents of beverage restrictions may succeed in their efforts.
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6. Any environmental impacts of any container initiative will reflect a
complex interaction of industries, distribution techniques, geography and
the varying roles of consumers. The steel industry anticipates only
negative environmental impacts from any restrictions on beverage con-
tainers, many of which cannot be anticipated because the consumer is the
ultimate decision maker. No one knows how they will react but we can
surmise that a substantial segment of consumers will simply switch to other
beverages not covered by the law or regulations such as fruit drinks, iced
tea, milk and spiritous liquids. Those who vend and consume-soft drinks
may choose to use paper or plastic cups. The environmental and sanitary
aspects of these techniques have not yet been analyzed.
Specific and more measurable negative environmental impacts of
restrictions on beverage containers include: safety, increased air and
water pollution, increased vehicle fuel usage, and aesthetics.
Safety: There is little question that a mandatory deposit for beverage
containers will have some impact on a part of the litter problem. The
litterer, however, who presently chooses to wantonly discard his beverage
container would probably continue to do so. What has not been addressed
in many of these studies is the low likelihood that the returnable bottle will
be refilled if it is chipped or cracked. Many soft drink bottlers and brewers
have sophisticated techniques to check the integrity of refillable bottles
but any massive, abrupt change in the complex marketing systems would
make the retailers and wholesalers vulnerable to assuming both financial
responsibility and potential legal liability for very large numbers of unsound
bottles, as well as the high initial cost.
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- 14 -
A corollary is the social and real costs inherent in picking up
broken bottles, whether refillable or not, and the prospective danger to
vehicles and citizens. Proponents ignore our own experience with broken
glass in the city and countryside.
Sanitation: All returnable bottles must be thoroughly washed and
rinsed to assure proper sanitation. There is no question that the refillable
system will use substantially more energy to heat more water for this
process. Periodically, the system will also fail.
Truck fuel: Returnable systems require more delivery vehicles.
Returnables take approximately twice the space of steel beverage cans and
the delivery truck must also allow for space to bring back returnables.
Unlike the sales segment of the system the return rate will tend to be erratic
as the ultimate consumer tends to aggregate bottles and return them at one
time. Thus, the entire distribution system must be oversized to be flexible
enough to accommodate these erratic returns of both refillables and
recyclables by consumers.
A final negative impact depends greatly on the trippage rate. Since
refillables have basically twice the mass of a nonreturnable bottle, the
energy and materials use in this bottle must be supported by at least two
complete trips as well as offset the aforementioned negative impacts. Four
trips are necessary to break even.
All evaluations of resource conservation depend on some assumptions
on trippage. No reliable data on trippage nationally is presently available.
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- 15 -
7. Additional research is continuously being developed. Both the
Office of Technology Assessment and the Government Accounting Office
are about to release studies which have a bearing on beverage containers.
What is needed is an understanding of the beverage and container
industries, not another study. All EPA commissioned beverage container
studies begin with assumptions, many of which are invalid. The studies
attempt to generalize from specific instances which often are atypical.
All government sponsored studies fail to recognize adequately the structural
differences between the brewing and soft drink industries and the dynamic
nature of each.
Virtually none of the studies has a proper recognition of the prospective
employment dislocation because they emphasize the net impact of a
returnable system requiring more workers. Nonetheless, the impact on
concentrated steel, aluminum or glass workers in many cities and towns will
not be diminished by a net increase of low paying part and full time bottle
sorting jobs throughout a state. Further, the impact of lost jobs will be
more dramatic and precipitous whereas the increased employment of bottle
sorters will be more incremental and less noticeable.
Any additional research should include a computer model of the entire,
integrated raw materials, packaging, beverage, distribution, retail sales
and consumer buying, focussing on a geographic area no larger than one
state and preferably smaller. If done properly, an array of assumptions can
be developed for both short term and long term impacts of any regulation
and how its results may vary from state to state. Thus, the results of any
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container restriction in an urbanized area which currently has a small
returnable market can be distinguished from the impact on a more rural
area which might have a higher ratio of beverages in returnable bottles.
8, The key elements of any regulation should be the degree to which it
conforms to the law and the high prospect for accomplishing what the agency
is directed by lawto do. Thus, any regulation should be equitable, under-
standable and workable. As indicated earlier, the rationale for EPA action
seems solely the desire to skew the marketplace to a returnable only
beverage system rather than one directed at any one or a series of inter-
related problem areas.
9. RCC should consider a product charge on beverage containers consistent
with its assessment of product charges for all manufactured products. One
possible consideration unique to beverages is that they are the only products
that are regularly available to the public in both refillable and one-way
containers.
The philosophical and practical rationale for any charge on any
product is the degree to which it restores equity by putting the environmental
burden which society is presently bearing for the product on the product
itself.
10. As has been noted earlier, the rationale for restrictions on beverage
containers must be set forth before deposits of any magnitude are considered.
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Present levels are arbitrary amounts selected on no rational basis.
We perceive the deposit to be nothing less than an artificial inducement
to skew the present packaging mix to a wholly returnable market. To the
extent that a certain deposit does not succeed in doing that, we assume that
the deposit will be adjusted to accomplish that pre-determined objective --
of forcing a switch to returnable bottles.
11. Clearly implementation of any deposit law must reflect the intention
of the lawmaker. As indicated earlier, Congress has not acted on this
matter in more than seven years and no evidence exis_ts to support the ty'_"-•',*V
EPA pre-disposition to promote such measures. Until such time as pro-
ponents properly understand the dynamic beverage and packaging industries,
we are skeptical that any data developed concerning actual or potential
deposit legislation can be agreed on by all affected parties.
The Department of Commerce published The Impacts of National
Beverage Container Legislation two years ago. Their data and findings have
not been refuted by anybody, yet EPA and other proponents persist in
support of mandatory deposit schemes. Commerce found that national
mandatory deposit legislation "should not be enacted. Results in terms
of final market shares of container types, beverage prices and nature of
conservation objectives cannot be predicted. Benefits could be much
smaller while adverse economic impacts could be much more severe with
conversion to a 100% refillable glass system particularly if high container
return rates are not achieved.
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TESTIMONY OF CONGRESSMAN LES AuCOIN
Before the U. S. Department of Commerce
October 19, 1977
My name is Les AuCoin. I represent the First District
of Oregon in the Congress and, as a state legislator in
1971, I served on the legislative committee that wrote
Oregon's first-in-the-nation Bottle Bill. I am here this
morning to strongly urge a national bottle bill.
It has been five years since that state law went into
effect — five years of continuous satisfaction with a great '
experiment — putting a price on the head of every beer
and soft drink container sold in Oregon.
Despite the overwhelming success and public acceptance
of this law, it has been subjected to abuse, ridicule aijd
lies by industries determined to protect their wrong-headed,
anti-consumer, socially bankrupt way of doing things.
Bottle Bill legislation has literally been studied to
death. And every study uncolored by industry biag has aome
to the same conclusion: state and national container deposit
legislation reduces litter and solid waste, saves energy,
and creates jobs. In cases where the law is in effect,
consumers pay no more for their beer and pop, and often
they pay less. And beverage industry profit* are up, not
down,
Regardless of what opponents of Oregon's Bottle Bill
may tell you, the key facts concerning the impact of the lav;
are incontrovertible.
First, beverage container litter along highways has been
substantially reduced. In the first year, the reduction
was 72 per cent. And, "the Oregon ethic" — as illustrated by
the Bottle Bill — apparently led motorists to be more con-
scious about litter of all kinds, for the total items Uttered
in that first year decreased 26 per cent.
You may have an industry spokesman come before you with
a different story. In 1974, an Oregon public relations
agency hired by the beverage and container industry claimed
that Oregon's own figures for that summer showed a 127 per
cent increase in beverage container litter for a three-month
period. It was subsequently shown that the figures supplied
by the Oregon Highway Division were inaccurate -- that one
litter sample actually had-been counted tv;ice. The truth
is that for the months in question there was a 20 per cent
reduction in beverage container litter. The industry has
been advised of this, but for reasons of its own, has not seen
fit to issue a correction.
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*W t-.he :
PAGE TWO
Second, the Bottle Bill reduces the amount of litter
going into the solid waste stream. From 1959 to 1972, beer
and soft drink consumption in the United States climbed 33
per cent. The number of beer and soft drink containers
consumed in the country skyrocketed by 221 per cent.
About 6 per cent of the solid waste in this country is
comprised of beverage containers. The financial burdens of
dealing with this waste is heaped on society. And, of course,
this is one of the industry's delights. It has no responsi-
bility for disposing of the 90 billion containers produced
annually, and thus does not bear the cost.
It should be clear that if this country is producing
90 billion beverage containers a year and most of them are
nonreturnables, they must not be going back into use. They
are going somewhere else, mostly into the ocean or roadsides,
or into landfills. It is a terrible waste of money and of
resources. So much aluminum is being buried that someday
society may find it profitable to mine the garbage dumps!
Third, despite industry claims, beverage sales will not
be adversely affected. A brewing industry spokesman recently
told the Washington Post that he opposes the Bottle Pill
because beer sales would fall. The argument doesn't hold
water. From 1973 to 1976 — the first three years after
Oregon's law went into effect — beer consumption in my
state increased 6.35 million gallons. The figures are based
on actual tr^x receipts, not estimates.
Fourth, industry has profited, not lost. Mr. Ted Gamble,
the Pepsi-Cola bottler in Portland, Oregon, reported late in
1973 that both his sales and profits were up in the year
following adoption of the Bottle Bill. Prices for beer and
soft drinks in Oregon were then and are now comparable to
those in other Western states. Call up any half-dozen re-
tailers in San Francisco, Portland 0J$ Seattle right now, and
you can prove it for yourself.
Fifth, the Bottle Bill saves energy. The most recent
studies indicate a national container law would result in
saving at least 70,000 barrels of oil a day. A study done
for the Environmental Protection Agency says Oregon's con-
version to a returnabli^Krees 1.3 trillion BTO's a year.
That's equivalent to the natural gas required to heat 11,000
Oregon homes — every year.
A 16-ounce nonreturnable bottle consumes four times the
energy of a. returnable bottle of the same size, assuming
ight trips for the returnable. A 12-ounce throwaway
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PAGE THREE
is 3.8 times more energy-expensive than a 12-ounce returnable
bottle. These are facts which should be heeded by a nation «
battling an energy crisis.
attling an
Sixth,
the Bottle Bill crt=.-t-' J--\- , a- y.j.7e there
will be a shift from container r ..-. ir: '.-••::' *::: '• ..- ••- *•••• b. "tiing
plants and retail stores. But t -,.v _•- ;..3.rt:i, vhv e-' :ry pro-
posal for a shift to nonreturnab; <-;z r'-olu-ie-. s phase-in
period — to ease the impact, anc" i-.f f.-vr-J sll parties a decent
chance to make the transition with rUr.insl discomfort
But there is another aspect of tha jobs problem not
well-considered in the past. The rise of the throwaway was
a trade-off of energy for jobs. With breweries able to make
their product in regional centers, spreading all over the map
because they no longer had to worry about getting their bottles
back, the bigtpav got bigger and the small became almost non-
existent. The number of breweries is down by about half
from 19S8. Former EPA Director Russell Train said that in the
period from 1958 to 1967, the number of persons employed by
breweries dropped by 15.6 per cent, with an annual oiyroll
loss of almost $100 million. Minnesota alone lo-t seven
breweries from 1962 to 1974.
A returnable system means some job shifts, bv'.-. more total
employment. The throwaway system has cost America jobs, and
led to the demise of a lot of local industry. Given all of
the alternatives A clearly tha ^returnable system is superior.
The Oregon Court of Appeals did a superb job of summing
up what the Bottle Bill is all about in releasing atv opinion
declaring fcMtawp constitutional. The Court
"The availability of land and revenues for solid
waste disposal, the cost of litter collection on
our highways and in our public parks, the depletion
of mineral and energy resources, the injuries to
humans and animals caused by discarded pull-tops,
and the blight on our landscape are all economic,
safety and esthetic burdens of great consequence
which must be borne by every member of the public."
The costs can be reduced, and the blight halted, with
adoption of Oregon's Bottle Bill as a national law. It is
time — in fact it is well past time — to get the job done.
*##
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My name is Henry B. King. I am President of the United
States Brewers Association, Inc. a not-for-profit national trade
association incorporated under the laws of the state of New York,
whose headquarters office is located at 1750 K Street, N. W. in
Washington, D. C.
The United States Brewers Association, Inc. is the oldest
continuously incorporated trade association in the United States
having been formed in 1862. The Brewer Members of the USBA
consist of approximately thirty-four American brewers ranging
from national brewers whose malt beverages are sold in all fifty
states, to regional brewers whose markets are in various sections
of the nation, to local brewers whose products are merchandised
basically within a few states. In addition, there are eleven
foreign brewers who belong to USBA as affiliated members. The
Brewer members of the USBA produce close to 95% of all malt
beverages sold in the U. S.
I should note at this time that .1 am not speaking on this
issue for the Adolph Coors Company which is a member of the
United States Brewers Association. The Adolph Coors Company
favors a nationwide uniform mandatory deposit on beverage con-
tainers.
In addition to brewer members, the USBA includes among
its membership scores of associate members representing almost
every American enterprise supplying products or services to the
brewing industry - from adhesives to yeast. Among the many
supplier industries represented by membership in the USBA are
the malting, milling, hops, paperboard, can, glass container,
crown, grain and feed, advertising signs, brewing machinery,
steel and aluminum industries.
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- 2 -
Litter reduction, solid waste management, energy conservation,
and resource recovery are certainly national goals we all seek.
Supporters of a mandatory deposit system on beer and soft
drink containers promote it as a way to reduce litter and solid
waste, increase employment, reduce costs to the consumer and
save energy. But is this so? There is no question that beverage
container deposits will reduce beverage container litter, but we
subrait and have documented for EPA and the other agencies involved
in these hearings that the costs that ensue to the industry and
to the consumer, as well as the job displacement, are burdens
far more costly than the savings effected. We have submitted
over the years detailed studies addressing every facet of this
problem. We submit that the imposition of mandatory deposits on
beverage containers on a national level will substantially in-
crease the cost of malt beverages.
We submitted a documented study to this effect in April
of this year to the EPA, to the Department of Coranerce, Department
of Agriculture, Department of Treasury, Department of Labor,
Council of Economic Advisers, the Office of Domestic Affairs and
Policy in the White House, to the Office of Management and Budget,
and to the Counsellor to the President on Energy. Other than
polite acknowledgments of receipt of these documents, we have,
to date, received absolutely no analyses or critiques of our
submissions. It were as though they never existed.
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— 3 —
We have recently met with Ms. Barbara Blum, Deputy
Administrator of the EPA, to protest the failure of that Agency
to be responsive in any manner to any of the studies which have
been submitted over the period of the last several years. She
has advised us that we will shortly be receiving evaluations
and analyses of our work. We would hope that other agencies
involved would do likewise.
One of the shocking things about this whole issue has been
the repeated statements by proponents, and this applies particu-
larly to the EPA, that there would be a transition period that
would minimize the disruption that would occur to industry and
to labor and yet no such study has been ever undertaken by any
agency of the government. How can you determine a national
policy on the basis of suppositions by ignoring documented
studies by responsible independent researchers?
Proponents of deposit legislation say that there will be
a reduction in costs to the consumer. Where is the documented
study to sustain that position? The USBA has presented documented
data to prove exactly the opposite. It will cost the consumer
substantially more and yet this study, up until now, has been
totally ignored. The proponents of mandatory deposits say that
they will increase employment and this is very true. It will
increase employment of unskilled workers and cause the unemploy-
ment of highly skilled workers, particularly in the steel and
glass industries. I submit that this is not a very wise national
policy and, indeed, not a necessary policy.
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- 4 -
Proponents point to the material savings they expect brewers
to enjoy, while ignoring the cost increases that will accrue to
wholesalers and retailers as well as the estimated 2.5 billion
dollars in new investment which will be required by the brewers.
The increase in shipping, handling and labeling costs will more
than vitiate whatever cost savings brewers may obtain. Even if
returnable bottles make 10 trips, consumers will pay between 60
and 80 cents more per case under mardatory deposit legislation.
Finally, mandatory deposits do not solve the problem.
There are better and more efficient ways of attacking litter
(not just 20 percent of it) as well as the larger problem of
solid waste management. There exists a highly successful precision
litter reduction program which does not result in serious costs
to the community, consumer or industry. Cities such as Macon,
Georgia, Charlotte, North Carolina and Tampa, Florida have
achieved 70 percent reduction of litter under this clean
Community System program. Resource recovery will answer the
solid waste problem and provide true energy savings. (Mr.
Peter W. Stroh, President of The Stroh Brewery Company, and
Chairman of the Board of the USBA, will comment later on
resource recovery.
These are positive approaches for our nation. They
represent efficient, cost-effective solutions. Mandatory deposit
legislation is a backward step in attempting to solve the litter,
solid waste and energy problems. Resource recovery and precision
litter management, on the other hand, can benefit every one —
government, labor, industry and the general public.
-------
My name is Peter W. Stroh and, in addition to being
President of The Stroh Brewery Company, Detroit, Michigan,
I am the Chairman of the Board of the United States Brewers
Association, Inc.
For the past seven years, the United States Brewers
Association has advocated a nationwide network of local
resource/energy recovery and recycling systems. The brewing
industry has argued that the development of a nationwide
network of resource/energy recovery and recycling systems
would be more effective in accomplishing our national energy
and materials conservation objectives than any attempt to
achieve these objectives through source reduction by eliminating
non-returnable beverage containers. May I respectfully remind
all present here today that EPA's own 1974 study, "Energy
Conservation Through Improved Solid Waste Management," Report
SW-125, confirmed our position. It would seem that in the past
EPA has ignored not only our studies, but its own as well.
We have previously submitted documented evidence (Item #6,
USBA Reference Source Book) that proved that a resource recovery
strategy is a far more cost-effective solution for accomplishing
our national energy and resource conservation objectives than
any source reduction strategy based on banning non-returnable
beverage containers.
Municipal recycling provides a more effective solution
at a lower cost to the environmental problems associated with
beverage convenience packaging than reverting to returnable
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- 2 -
bottles. Dollar for dollar, resource recovery from municipal
solid waste will conserve at least four times as much energy,
get rid of eight times more solid waste, and save at least
twice as much aluminum, ferrous metals and glass as returning
to returnable bottles would.
Municipal recycling makes more environmental sense in
other areas as well. It will help eliminate the rodent and
ground water contamination problems associated with our present
dumping and landfill practices, to say nothing of the environ-
mental problems associated with the off-shore oil wells, atomic
power plants, and coal strip mines that will be required if the
recovery of energy from municipal solid waste continues to be
neglected. A favorable balance of payments impact of more than
$2 billion annually from the development of this energy source
should not be ignored as well, nor should the long-term
consequences of dissipating precious environmental capital for
costly and wasteful solutions to very serious environmental
problems.
The United States Brewers Association has recently
prepared an analysis which examines resource recovery as an
alternative energy source. This analysis shows that the capital
required to build a national network of local resource recovery
systems is significantly less per barrel of oil per day
equivalent than the capital required to support the widely
discussed synthetic alternatives. It also shows that, when
adjusted for a reasonable learning curve effect, the investment
-------
required to support a national resource recovery system becomes
competitive with the investment required to develop our coal
resources.
The data sources for this analysis entitled, "Resource
Recovery As An Alternative Energy Source" which we are now
submitting to the Resource Conservation Committee are basically
studies for the EPA and Alcoa by Franklin Associates and Midwest
Research Institute and the MIT Workshop on Alternative Energy
Strategies' (WAES) Second Technical Report "Energy Supply to the
Year 2000."
If we utilize the WAES estimates of the components of
total investment, we can develop individual investment require-
ment estimates for coal gas, coal liquids, and oil shale energy
sources and compare them with the investments required for a
nationwide system of resource recovery based on the previously
noted sources.
By resource recovery, it is possible to obtain 760,000
BDOE by 1990 for an investment of between $11,870 to $13,700 per
BDOE. By contrast, for coal gas it would cost $29,800 per BDOE,
for coal liquids $27,020 and for oil shale $12,150.
While the investment for oil shale appears to be
approximately competitive with resource recovery, oil shale offers
a relatively modest energy potential of 100,000 BDOE versus the
previously noted 760,000 BDOE for resource recovery.
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- 4 -
In fact, if total synthetic energy sources were utilized,
by 1990 the country would receive 700,000 BDOE for an investment
of $26,490 BDOE compared with 760,000 from resource recovery
systems at less than half the cost.
I believe that when the Resource Conservation Committee
analyzes this report, they will agree that resource recovery can
and must make a vital contribution to not only our growing solid
waste problems, but also, more importantly, when all national
interests are taken into account, to our essential energy needs
as well. This hardly needs emphasizing at a time when our
dependency on off-shore energy is growing day by day, our balance
of payments deficit is growing with it, and the value of our
currency is at a declining pace. I feel very strongly that the
bridge financing for such a nationwide network of resource
recovery facilities can best be provided by a broad-based tax on
all of the tiems that contribute to both litter and municipal
solid waste.
The resource recovery systems, coupled with the Clean
Community System for litter elimination, achieve the goals to
which we all aspire and agree with, and to which I referred to
earlier -- conservation of resources, energy savings, elimination
of litter and reduction of solid waste.
Proponents of mandatory deposit legislation seek to achieve
those goals by changing packaging; we seek to achieve the same
goals through cost-effective techniques which do not place an
undue burden on the American consumer and taxpayer.
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STATEMENT OF MALCOLM W. OWINGS, VICE PRESIDENT OF THE
CONTINENTAL GROUP, INC. AND SPOKESMAN FOR THE BEVERAGE CAN
COMMITTEE OF THE CAN MANUFACTURERS INSTITUTE BEFORE THE
INTERAGENCY RESOURCE CONSERVATION COMMITTEE, OCTOBER 19, 1977
Mr. Chairman, members of the committee, ladies and gentlemen.
I am Malcolm W. Owings, Vice President of The Continental
Group. As spokesman for the Can Manufacturers Institute, I
am pleased to make available significant new information on
litter, solid waste recovery, retail store impacts, energy,
and the use of critical resources such as oil, and water as
they all relate to this proposed legislation.
Attached to my testimony are excerpts from the following
contemporary research either not previously published or
just made public. 74/'
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Jif
a 40* to 50% overall litter reduction compared to
control cities where such systems have not been in
practice. The Clean Community System is the only
litter program endorsed by the American Public Works
Association and this new research proves it has re-
duced more litter effectively than all the deposit
bills ever passed. For the first time in any litter
research proper adjustments for vehicle volume,
pedestrian traffic and location of entrapment
potential such as ditches, hedges, fences, etc., was
factored into the statistics.
3. In a similar manner, the Institute for Applied
Research study for the first time mado a Lului'i-ed
sfcTjiniiri rln i^!JUbl3iil§7tt—&£ two states to accurately
compare litter rates in terms of actual human
exposure to litter in various types of rural and
urban locations accounting for the size of litter
items and the frequency of clean-up. Upon measuring
comparable locations in each of the states of
Washington and Oregon, Washington in 1977 was
found to have a 29% lower amount of litter based
on the square foot of accumulated litter per mile.
Beverage can and bottle litter in rural areas
during June 1977 were found to be 7% of all litter
in Oregon and 11% of all litter in Washington, but
less than 3% of total litter in the urban areas of
both states - suggesting that if the goal is to
reduce all litter, a broad based litter tax funding
litter education and stronger litter law enforcement
that is in place in the State of Washington worker
better than a deposit bill withoutany economic or
personal employment dislocations ^»D%t is interesting
to note the statistics show that as ring pull tabs
from cans declined in Oregon litter, the number of
bottle caps increased significantly approaching an
exchange rather_than any sizable overall litter
reduction.
The Midwest Research Institute study finds that
refillable bottles require significantly greater
amounts of heated process and wash water than
cans, in some cases 3-1/2 gallons per
the filling locations - which results j
eight times more water being required in the
refillable bottle system. Therefore, if the
proposed federal deposit legislation resulted in
80% of all beverage products to be sold in re-
fillable bottles, water use would increase by a
minimum of 7.5 billion gallons at the beverage
filling locations in the United States when 2/3 of
all beverage filling locations today either have
water shortage problems or are predicted to have
such problems in the future.
-------
Actual cost data in the operation of the Americology
Resource Recovery Plant reports an average disposal
cost of $23.50 per ton to recover and recycle 90%
of all the ftans in the solid waste stream of
Milwaukee^pjhe bottle bills in Vermont and Maine
mandate a^^^mdling charge of 14 per container.
Since there are on the average 31,000 beverage
cans per ton, these deposit collection systems
cost ,$310 per ton, 13 times the cost in Milwaukee,
and we should remember the cans are still in the
retail stores contributing to future health and
sanitation problems as was recently reported on
television in Medford, Oregon. As stated, the
Milwaukee system recovers up to 90% of all cans
compared to a return rate of less than 75% in
Oregon and Vermont and even in the E.P.A. Yosemite
Park test. This means Yosemite Park is getting a
3.6 rate of trippage on their beverage containers
versus a ten trip equivalent in the Milwaukee
system.
This month Progressive Grocer Magazine reports
that three out of ten retailers in Oregon would
like the bottle bill repealed and six out of ten
want it modified to include a container handling
allowance because of the high cost of handling.
The large urban supermarkets in Oregon are where
the most opposition to the bill exists and, if
this is true in Oregon, can you imagine what might
occur in urban retail markets east of the Mississippi?
We are talking about costs that are pA^ l^y- the
consumer jiC Lhu amilLJLimi UJ UUL Uilbdii iuod
The already published Research Triangle Institute
study refers to "equivalent barrels of oil'1, but
Mr. Chairman there is no such thing - all BTU's
saved in an energy system are not equal to each
other. For example, the R.T.I, determined that a
steel beverage container system uses substantially
more coal than refillable bottles, and refillable
bottles use more petroleum. Further study by my
company, ancfoeing confirmed by preliminary reports
for the Batelle Institute, is now indicating that
80% of the energy used in a refillable bottle
system consists of critical resources such as oil
and natural gas where only 50% of the energy used
in beverage cans is oil or natural gas. This suggests
that substitution of refillable bottles for cans
would increase the use of oil and water and the
energy savings that would take place would be a
savings in the use of coal. This seems a strange
direction and proves that all BTU's are not equal
and the reckless use of "equivalent barrels of oil
nomenclature" should be seriously questioned.
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- 4 -
On page 2 of the Executive Summary of the Resource Conservation
Committee's Report of October 11 it states, and I quote,
"Deposit legislation would result in energy savings of 25-35
million barrels of oil per year." I suggest the energy
saved would be coal and I hope you have not been mislead
others have been by using equivalent barrels of oi
Today, the Federal government indicates they want to participate
more in the planning and management of the U.S. economy.
Businesses have learned that in order to plan their operations,
the principle of test marketing must be utilized and business
spends millions of dollars and several years test marketing
in several different types of regions before going nationwide
with any new product or system. The agencies seemingly
presume that the Oregon experience^ ifi^ja^aQfld typical test
for the nation. In truth, Oregon*?^ no's tly rural with less
than 1% of the U.S. population and quite dissimilar to 95%
of the states east of the Mississippi as well as the states
of Texas and California.
Business uses test market analysis to make sure that their
judgment can stand up in the public forum before spending
stockholders funds. While there has been reams of rhetoric
on rural Oregon, we believe only now the first scientific
market test analyses are being made. In addition, the next
real test market is the state of Michigan that has also
passed this law effective in 1978. Should Federal legislation
be passed before this important urban test market counsels
all of us on what future courses we should take?
Up until now I have deliberately limited my comments to new
information - however X* imij*- repeat on behalf of the
thousands of wage earners in my industry and supplier
industries that such deposit legislation could have serious
economic impact on 50% of our employees and, therefore, you
must establish that the benefits of this legislation are
major and jcmpelling in,order to justify its suoport
"
1. Can we afford to pass a national law that forces
beverage fillers to use more water when up to 2/3
of those locations are now or about to be short of
water?
2. Can we afford to pass a law that mandates the
savings of coal and the additional use of oil
because it is perhaps conceived as being the
current emotional thing to do?
3. Can we afford to pass a law that has such significant
impact on urban retail stores without a test
market?
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- 5 -
4. Can we afford to pass a law that by all^esearch
available only reduces overall litterxlO% with
significant employment, and economic dislocation in
urban areas? i f^tfft^Uui^SifLf'f' .
5. Can we afford to igno're what this new reseaj«i
suggests - that a broad based litter taj^^ombined
with the application of Clean Community Systems
may be the answer to effective litter control.
I suggest it's about time proven principles of market test
analysis be applied to such situations and we all lower our
voices on this subject and start doing our homework.
We know we have more to do; we believe the agencies do also.
Thank you.
M. W. Owings
MWO:ln 755
10/18/77
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Extracted from a Preliminary Draft of "An Independent Assessment of Litter Reduction
Effectiveness" by The Institute For Applied Research, 840 LaGoleta Way, Sacramento,
CA. 95825
COMPARISON OF
SQUARE FEET OF ACCUMULATED LITTER PER MILE
IN WASHINGTON AND OREGON
Location
Interstate Highways-Rural
Interstate Highways-Urban
Other State Hwys. -Rural
Local Roads-Rural
Urban Major Streets
Residential Areas
Parks, Public Bldgs
Commercial
Industrial, Vacant
Urban Minor Streets
Residential Areas
Parks, Public Bldgs.
Commercial
Industrial, Vacant
Average
Daily
Traffic
12,500
38,200
2,100
200
5,100
5,100
5,100
5,100
900
900
900
900
Composite Square Feet of Accumulated Litter
Percent of Per Mile
Annual Vehicle
Miles Oregon Washington % Diff
12.
11.
24.
11.
23.
3.
1.
1.
8.
1.
.om.
.86
,30
,15
36
19
15
80
83
20
44
68
617.
2498.
440.
174.
275.
149.
429.
2018.
192.
132.
507.
1799.
.3
.1
.0
0
9
6
8
1
5
5
8
6
481.7
1747.8
337.6
171.3
185.6
93.6
292.1
1023.8
123.7
80.3
230.3
926.4
-22"
-30
-23
- 2
-33
-37
-32
-51
-36
-39
-55
-49
Weighted Averages
100.00
641.3
453.6
-29.3%
This data, from 110 randomly selected sample locations in each state, was
acquired during the representative periods 5/16/77 to 6/13/77 and 9/7/77 to 10/4/77.
For the first time in litter research, proper adjustments were made for vehicle
volume, pedestrian traffic, neighborhood income and location entrapment potential
(ditches, fences, hedges). Also for the first time, a proper balance of samples
from various types of urban and rural locations was made, resulting in a fair and
equitable comparison of the two states in terms of total human exposure to litter.
Such previously neglected factors as the actual square footage of area covered
by litter and the frequency of litter pick-up on state highways were accounted for
in these comparisons.
COMPARISON OF BEVERAGE RELATED LITTER
Items/Mile week
Oregon
Washington
Bottle Caps
50.7
22.6
Pull Tabs
13.8
52.2
*64.5
74.8
Not a significant decrease in total - appears to be an exchange of whax item is
littered. Adjusted for rural/urban split based on June, 1977 - litter sample.
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RECE/VED
SEP 2 6 1977
R.B. OPITZ
Jlll-n* f. c. o. E,I. nn
@m roads
•~>
Oregon's famous bottle bill license plate.; to the Youih
got rid of a large' part of'the i.illcr Patrol budget.
state's littler problem. For purposes of compari-
But litter still is increasing son. the general maintenance
every year, according tr> Ken biulgct of J501.3I1 in 1972 com-
Karnush. maintenance en- pared with a Youih Litter
Rineer with the Orccon Hifjh- Palrol budget of (49.082. The
way Division office m Salein. yoirlh litter Iniilgf.'t jumped in
"Tlic bulk of it is plastic and succession to ?70,fi57 in 1C73.
paper, the tlirowways iK-ms." $103.893 in 1!J74 and $lG3.tto in
Karnosh said. "Most .if it is 1»V5.
related to an increase i;: tr.if- A bookkeeping error in
fie." which yuuih employes \vere
And while there was a apid from general niainlc-
noticeable drop in the number nance funds in 11/76 resulted in
of cans and bottles aloni; the a b;i!:nice sh*»rl expenditure
stale's roadways innnc- fur the youth patrol of JJl 5'JH
dintrly after the bill wjis ef- Hint year Hut K.ir.iush said
fcclivc in October. 1972. there t!'e actual expenditure was
has been a steady increase in more like ?i80,txX).
bottle and can litter since And in the fiie.il year just
then. Kanmsh said. cndnl, the Youth I.ittcr Patrol
"After the bill wont into uf- budget was $332,097. The
feet — there's no daU en this general budget, on the other
— we saw a definite decrease hand, dnjppc:! !>clow what il
i;i the number of bottles along was five years previous when
the highways." he said. it hit M7G.244.
"But while we don't bave "Apparently the sales have
figures on lite number of really increased on the
buttles and cans collecied. it cu'lom license plates." K.ir-
srems like more pfcyle arc »u*b said. "People really like
throwing thing* out now. t them."
think there has been an At 525 per or. license plate
increase." sales List yeflr represented
He blamed it on public ac- about l.t.GOO vehicles. A rnpid
ceptancc of deposit fees as .d"rrc.i*e in budget receipts
part of His purchase price and rould follow a good year.
th/* dwindling value of a nickel l.hnunli. indicating tlm rv-clic.il
compared to US value in 1972. buyinj; cfi'cct cairsetl by Hie
Since IOV2 when, roim sdcn- two-yt-nr term uf the luvnses.
Lilly, the .state's V'tclli I.itior Jjiit_K;irnsoli said inrreused
Patrul was fornit'd. thert has JMij^;ct^f?(.ini Jimi.
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Mr. Chairman, members and staff of the Resource
Conservation Committee, I am Fred Wharton, Director of
Public Affairs for the Plastic Beverage Bottle Division
of The Continental Group, Inc.
Continental is proud to have served America, and other
nations, with its packaging products for more than 70 years.
It is dedicated to continuously striving to improve packaging
products conforming with sound environmental considerations.
We appreciate today's opportunity to present our views
which hopefully will contribute to a decision by the Committee
not to recommend Beverage Container Deposit Legislation at
the Federal level.
My statement today does not comment on the various
working draft background papers that Barbara Blum has made
available to us. Unfortunately, we did not receive them
until last week, but we will reply in writing to many
of the points contained in the papers.
We oppose Federal Beverage Container Deposit legislation
because we believe there are other and better measures that
can achieve the objectives of such legislation without being
counterproductive.
Continental, in conjunction with others who manufacture
polyester beverage bottles or contribute to their production,
will submit definitive data to the Commission reinforcing
and expanding on many statements that I will make in this
brief presentation.
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- 2 -
Polyester beverage containers have recently been introduced
in response to perceived opportunities to offer consumers a
better product while participating profitably in the beverage
market. This business decision was taken at a time (as long
as 8 years ago) when threats of penalties or indirect taxes
unrelated to this product did not exist. Consequently,
industry could and did evaluate the market, and quantified the
qualities and methods required to produce a superior consumer
product which justified the expenditure of millions of dollars
in development costs. The result is the polyester beverage
container which has numerous consumer and ecological benefits.
Studies show the entire Beverage Industry uses a small
fraction of total U.S. energy consumption (less than 1/2 of
1 percent). However, large-sized polyester beverage containers
(primarily for the home consumption market) will lower this
minor energy expenditure because they use less energy in their
production and distribution than any other non-refillable
container. Data currently being assembled by the industry
suggest that polyester containers compare favorably in terms
of energy consumption with refillable containers whose trippage
is in the range of 5 to 7 uses. We also believe there is a great
opportunity to improve resin production and fabrication of polyester
containers, and we are confident that future improvements will further
reduce the energy required in the manufacturing and distribution
processes.
-------
Advocates of Beverage Container Deposit Legislation support their
position largely on a reduction in litter. Polyester beverage
containers are most effective and most economical as large size
packages — 32 to 64 ounces. These packages are primarily used
in the home, and consequently are unlikely to be littered.
Today, beverage containers represent less than 6 percent
of municipal solid waste. The polyester containers should
help reduce this minor portion of the solid waste stream.
Polyester bottles also are light weight, approximately 73 grams or
less than 1/6 of a pound in the 64-ounce size compared with 1.9
pounds for a comparable non-refillable glass bottle or 2.9 pounds
for a refillable bottle. Additionally, polyester beverage
containers can be burned and their energy recovered where such
resource recovery systems exist, or the need for fossil fuel to
burn garbage in incinerators can be reduced when polyester containers
are included in the waste.
Polyester beverage containers are safe because they are
extremely break-resistant. If broken, they tend to split
into two or three large pieces with feathered edges that are
unlikely to cut or damage property. There are other benefits
resulting from the use of plastic beverage containers, too,
but it is doubtful that this product would have been developed
had Beverage Container Deposit Legislation been in effect.
-------
Part of our opposition to legislation of this
nature is its stifling effect on innovation, risk taking
and free enterprise, which could deny the public the choice
of better products than are currently available.
There are more effective alternative methods of attacking
the problem which Deposit Legislation seeks to solve.
An approach to reducing litter that has been effective
is the Clean Community System which Keep America Beautiful has
helped to implement in some 70 U.S. cities. This program has
resulted in litter reduction in participating cities ranging
from 10 percent after one month of operation to up to
77 percent after three years.
This approach has much to commend it, and it can be
activated without legislation and with minimal public
expenditures. The Clean Community System also helps unify the
community, by providing a mechanism for attacking a diversity
of local problems.
Another alternative is operational in the State of
Washington which has enacted legislation that provides a tax
of 0.015 percent on the gross proceeds of the sale or the
manufactured value of a broad category of products which
become components of litter. Revenue from this tax is used
in a multiplicity of ways to reduce the incidence of
litter and to increase frequency of litter clean up.
We believe that solid waste can best be approached by
programs which result in recovery of useable materials.
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including the combustion of the remainder as a source of
energy. The KPA estimates that 70 to 80 percent of U.S.
municipal solid waste could be recycled for its energy content.
The EPA further estimates that there will be 36 energy
recovery plants operating in 30 communities by 1980. Polyester
Beverage Bottles are a positive factor in such systems,
allowing energy to be used to produce a container which
subsequently can be recovered for the production of electricity or
for heating. Federal Legislation providing financial impetus
to such programs would address the total solid waste problem
with a meaningful solution.
Energy, another concern, is not just a national problem but
an international problem. It cannot be solved by piecemeal
legislation.
Domestic policy has further complicated the issue by
subsidizing petroleum and natural gas prices, with the result
that the prices of many products do not include their true
energy cost. Thus, otherwise non-competitive products become
competitive. Allowing all energy sources to be priced at their
true market value would eliminate this inequity. Those products
that are high energy consumers will be priced out of the
market, unless there are offsetting savings or compensatory
benefits.
In summary, wte believe American Society is best served
by allowing unrestrained competition between materials and
fabricators supplying the Beverage Container market. The
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STATEMENT OF THE CRUSADE FOR A CLEANER ENVIRONMENT
ON BEVERAGE CONTAINER LEGISLATION
PRESENTED TO THE
RESOURCE CONSERVATION COMMITTEE
OCTOBER 19, 1977
Mr. Chairman, members of the Resource Conservation
Committee, I am Betsy Houston, Executive Director of the Crusade
for a Cleaner Environment. We appreciate your invitation to express
our views on federal beverage container legislation.
The Crusade for a Cleaner Environment is a unique organization
of bottlers, suppliers to the soft drink industry, ecology groups and
concerned citizens from all walks of life. Because many of our
members are bottlers and suppliers, CCE has become one of the
leading non-governmental sources of information on the economic
and environmental advantages of refillable bottles versus throwaways.
I wish to emphasize that these bottlers and suppliers form a significant
part of "the industry" which so often is pictured as a monolithic giant
united in its position against so-called "environmentalists. "
As a result of our studies over the past seven years, it is our
judgment that a returnable-deposit system is the best and most
economical way to overcome the solid waste, energy and resource
depletion problems associated with throwaway beverage containers.
-------
Ideally, consumers and industry would co-operate in a voluntary return
to such a system of distribution, which has served the soft drink inudstry
well for over 75 years. Since this apparently is impractical, however,
the best solution is a federal mandatory deposit.
Federal legislation will promote the nationwide conservation
goals of the returnable-deposit system. It will be easier for industry
to comply with one national law rather than a patchwork of state laws.
In 1978f there will be four state mandatory deposit laws in effect in
widely scattered parts of the country -- Oregon, Vermont, Michigan
and Maine. Given the fact that virtually every other state legislature
as well as dozens of municipalities are considering such legislation,
chances are that a patchwork returnable-deposit system will be imposed
on the soft drink and beer industries within'the next several years.
The deposit should be imposed at the distributor level. One of
the keys to success of the returnable-deposit system is making it
easy for people to bring their containers back and obtain their refund.
If the deposit originated at the retailer level, there may be an incentive
for the retailer to discourage returns, since he would profit from the
unredeemed deposits. If the retailer has to pay a deposit himself
for the container, however, he will have an incentive to return it
to the distributor. In the soft drink industry, this closes the loop
since the distributor is also the bottler. He can reuse the refillable
bottles, and sell cans back to his supplier for recycling.
In recommending a federal law, we do not envision a universal
deposit level. The federal government should set a minimum deposit --
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5 cents appears to be the most practical at this time -- then let
local market forces set the actual rates. In most areas of the
country, 5 cents probably is enough to ensure an adequate rate
of return. In urban areas like New York, or in the inner city
of "Washington, 10 cents may be necessary to provide the incentive
for consumers to return containers. Because it will be in their
best interests to get containers back, bottlers will set the deposit
level high enough to get adequate return rates.
There are advantages and disadvantages to a two-tiered
deposit with standardized containers. The pros and cons are
spelled out in your staff's draft background papers, so I will
not repeat them here. At this point, we believe that the fewer
new features are introduced into the traditional returnable-deposit
system, the better. Also, market forces in some areas of the
country may encourage a lower deposit for standardized containers
without the two-tiered system being locked into law.
In order to effect a simple return to the returnable-depos it
system as it has become familiar to generations of Americans, we
recommend including only beer and soft drink containers at this time.
The economic, environmental, energy and social impacts of a
return to returnables have been studied and restudied. Analyses of
the Oregon and Vermont experiences and projections onto a national
scale indicate that the beverage container portion of both litter and
solid waste could be reduced by about 80 percent, saving taxpayers
millions of dollars in cleanup and disposal costs. Consumers would
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be able to purchase beer and soft drinks at lower prices -- about
5 cents less in a 12-ounce refillable bottle than in a throwaway
bottle or can. Total consumer savings could amount to $2. 5 billion
per year. Significant energy reductions would be realized -- 145-170
trillion Btu's in 198Z, according to a Federal Energy .Administration
study. The impact of materials savings would be significant, as
pointed out by the National Commission on Supplies and Shortages,
Finally, more jobs would be created than lost in the switch to the
returnable-deposit system -- a net gain of 80, 000 to 118, 000 positions,
most studies show.
The beauty of the returnable-deposit system is that its recycling
system is already working. Keturnables are the traditional way of
doing business in the soft drink industry. Bottlers have plants and
trucks adapted to the system, and the capability of acquiring more as
necessitated by a shift to the returnable deposit. We believe that
the market will take care of any temporary dislocations caused by
a return to returnables, and. that the federal government should not
intervene. A three to five-year lead time should be included in the
legislation to allow bottlers and retailers to gear up to avoid these dislocations.
There is no alternative to the returnable-deposit system which
would so simply alleviate the problem of throw aw ay beverage containers.
Litter education, such as the Keep America Beautiful campaign, has
done little to clean up beverage cans and throwaway bottles from the
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-5-
countryside. While resource recovery systems offer excellent
potential for recovery of energy and materials from post-consumer
waste, they are economically feasible only in large metropolitan
areas, cost hundreds of thousands of taxpayer dollars, and take
years to bring onstream. The returnable-deposit system will
complement resour'ce recovery.
Finally, the most talked-about alternative to mandatory
deposits -- the litter tax -- has proven to be not as effective
in cleaning up beverage can and bottle litter in Washington state
as the deposit law is in Oregon. The tax merely provides funds
to pick up the mess once it has been made, and adds to the cost
the consumer pays for his soft drink or beer.
By contrast, the returnable-deposit system prevents the
litter problem before it starts by providing a financial incentive
not to throw away a beverage container. The system places the
penalty for littering squarely on th^ shoulders of the person who
litters, not on society as a whole through taxes and higher prices.
In summary, the returnable-deposit system is the most
economical way to deal with the environmental and economic
problems of throwaway beer and soft drink containers. We urge
the Committee to recommend its adoption.
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MY NAME IS GEORGE MARIENTHAL, AND I AM THE DEPUTY
ASSISTANT SECRETARY OF DEFENSE RESPONSIBLE FOR THREE MAJOR
FUNCTIONS: ENERGY, ENVIRONMENTAL PROTECTION, AND OCCUPATIONAL
HEALTH AND SAFETY. SOLID WASTE MANAGEMENT AND RESOURCE
RECOVERY ACTIVITIES ARE DIRECTED, LOGICALLY, IN MY OFFICE OF
ENVIRONMENTAL QUALITY AND, HENCE, SO ARE THE BEVERAGE
CONTAINER GUIDELINES.
TO REVIEW BRIEFLY, THE SOLID WASTE DISPOSAL ACT OF 1965,
AS AMENDED BY THE RESOURCE RECOVERY ACT OF 1970, UNDER SECTION
209, REQUIRED THE ADMINISTRATOR OF THE ENVIRONMENTAL PROTECTION
AGENCY TO PUBLISH GUIDELINES FOR SOLID WASTE RECOVERY. ON
JUNE 5, 1974, THE NATURAL RESOURCES DEFENSE COUNCIL CNRDC)
SUED THE ENVIRONMENTAL PROTECTION AGENCY (EPA) FOR FAILURE TO
ISSUE THOSE GUIDELINES. THE NRDC SUIT WAS SETTLED OUT OF
COURT, AND ONE OF THE CONDITIONS OF THE AGREEMENT FOR SETTLE-
MENT WAS THAT EPA DEVELOP GUIDELINES TO ENCOURAGE BEVERAGE
CONTAINER RECYCLE AND REUSE.
THE DEPARTMENT OF DEFENSE FORMALLY OBJECTED TO THE
ORIGINAL DRAFT GUIDELINES. DOD QUESTIONED THE AUTHORITY OF
EPA TO PUBLISH THE GUIDELINES AND WE COMMENTED EXTENSIVELY
AND WORKED CLOSELY WITH EPA AS THE FINAL GUIDELINES WERE
DEVELOPED. EPA PUBLISHED THE GUIDELINES IN FINAL FORM ON
SEPTEMBER 20, 1976.
LIKE GOOD SOLDIERS, AND IN SPITE OF OUR INITIAL
RESERVATIONS, WE ARE COMPLYING WITH THE GUIDELINES. WE
OBJECTED TO THE PIECEMEAL IMPLEMENTATION OF THE GUIDELINES
AND, BECAUSE OF THE COMPLEX ISSUES INVOLVED, ELECTED TO TEST
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THE GUIDELINES IN COOPERATION WITH EPA, AT TEN SELECTED,
REPRESENTATIVE, MILITARY INSTALLATIONS, 3 ARMY, 3 NAVY,
3 AIR FORCE, AND 1 MARINE CORPS.
THERE WAS A PREDICTABLE RELUCTANCE ON THE PART OF SOME
BEVERAGE SUPPLIERS TO COOPERATE WITH US IN THE TEST, AND
THERE WERE SEVERAL LOGISTICAL PROBLEMS ASSOCIATED WITH LABELING
CONTAINERS AND THE REDEMPTION, STORAGE, AND RECYCLING OF THE
EMPTY BEVERAGE CONTAINERS.
THE TEST PROGRAM REQUIRES THAT A FIVE CENT DEPOSIT BE
COLLECTED ON ALL CARBONATED BEVERAGE SALES WHICH ARE PURCHASED
FOR "OFF-PREMISE" CONSUMPTION. THE TEST PROTOCOL DOES NOT
REQUIRE THAT ALL CONTAINERS BE REFILLABLE, BUT SIMPLY THAT
ALL CONTAINERS BE RETURNABLE AND REFUNDABLE. TEST PARAMETERS
REFLECT CHANGES IN SALES, BY THE NUMBER OF CONTAINERS SOLD,
BRAND MIX, THE CONTAINER MIX AND THE DOLLAR VALUE AND AN
INDICATION OF THE RETURN RATE FOR THOSE CONTAINERS FOR WHICH
A DEPOSIT WAS REQUIRED. AS OF THE END OF SEPTEMBER, ONE
INSTALLATION HAD BEEN UNDER TEST FOR SIX MONTHS, TWO FOR FIVE
MONTHS, AND THE REMAINING SEVEN FACILITIES FOR FOUR MONTHS.
OPINION SURVEYS INDICATE THAT PEOPLE ARE GENERALLY IN
FAVOR OF THE BEVERAGE CONTAINER PROGRAM, BUT THEY RESENT THE
INCONVENIENCE OF HAVING TO RETURN EMPTY CONTAINERS FOR REFUND.
THIS RELUCTANCE, TOGETHER WITH SOME LOSS OF AVAILABLE BRANDS,
BECAUSE BEVERAGE SUPPLIERS ELECTED NOT TO PARTICIPATE IN THE
-IU*X
PROGRAM, HAS RESULTED IN A DECREASE IN SALES AT MOST* .BASES.
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3
THE MAGNITUDE OF THE SALES REDUCTION IS PRIMARILY A FUNCTION
OF THE PROXIMITY OF THE MILITARY FACILITY TO PRIVATE SECTOR
MARKETS WHICH DO NOT REQUIRE A DEPOSIT FOR CONTAINERS. REMOTE
BASES EXHIBIT A SMALL OR TEMPORARY LOSS IN SALES. BASES WHICH
ARE LOCATED NEAR COMPETITIVE MARKETS HAVE EXHIBITED A
SIGNIFICANT REDUCTION IN SALES. ONE BASE, IN AUGUST, REPORTED
A SALES REDUCTION IN EXCESS OF *» PERCENT AS COMPARED WITH
AUGUST 1976. THE CONTAINER RETURN RATE, WHILE QUITE POOR
INITIALLY, GRADUALLY INCREASED TOWARD ABOUT 80% FOR MOST
FACILITIES. THIS FACT TOGETHER WITH SURVEY INFORMATION
SUGGESTS PEOPLE PURCHASE BEVERAGES WEEKLY, BUT RETURN THE
EMPTY CONTAINERS MONTHLY. MOREOVER, THERE IS A PREDICTABLE
LAG OF RETURN RATE DURING THE FIRST THREE OR FOUR MONTHS
FOLLOWING IMPLEMENTATION.
IT IS OUR INTENTION TO CONTINUE THIS TEST FOR A FULL
TWELVE MONTHS AT EACH FACILITY. ONCE THE TEST IS COMPLETED
AND THE DATA ANALYZED, WE WILL MAKE A DECISION TO EXPAND THE
IMPLEMENTATION PROGRAM TO OTHER DEFENSE FACILTIES, OR TO
LIMIT THE IMPLEMENTATION TO THOSE INSTALLATIONS WHERE IT IS
CLEARLY FEASIBLE TO DO SO.
IT MAY BE APPARENT ALREADY, THAT WE ARE UNABLE, AT
THIS TIME, TO ANSWER THE VARIOUS QUESTIONS WHICH THE RESOURCE
CONSERVATION COMMITTEE HAS POSED RELATIVE TO THE BEVERAGE
CONTAINER ISSUE. I BELIEVE, HOWEVER, THAT WE CAN SAFELY
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environmental
action
foundation
The Dupont Circle Building
Suite 724
Washington, 0 C. 20036
Telephone 1202) 659-9682
STATEMENT OF DIANE MACEACHERN
Coordinator of the National Clearinghouse on Deposit Legislation
Environmental Action Foundation
Presented to the Resource Conservation Committee
on the Federal Beverage Container Deposit Issue
October 19, 1977
To the Resource Conservation Committee: Good morning. My name is Diane
MacEachern. I am the Coordinator of the National Clearinghouse on Deposit Leg-
islation in Washington D.C.
In 1976, a poll taken by the Research Triangle Institute showed that 73% of
all Americans endorsed mandatory deposit legislation. Later that year, citizens
in Michigan and Maine joined those in Oregon and Vermont in passing beverage
container laws state-wide. This year, 44 additional states are attempting to
implement similar laws, while three counties in the Washington, D.C. metropolitan
area have just passed their own deposit ordinances. In other words, putting a
minimum deposit on soft drink or beer cans and bottles has become a popular and
accepted means of solving the problems over-packaging has created on our streets,
in our work force, and in our pocketbooks. I welcome the opportunity to address
those problems and respond to some of the questions put forth by the Resource
Conservation Committee.
As documented by the Federal Energy Administration, the National Wildlife
Federation and numerous consumer and public Interest groups, a return to returnables
can save 81,000 more barrels of oil per day, create between 80,000 and 118,000
additional jobs, and save consumers as much as $1.8 billion annually. Legislation
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accomplishing these savings has already been introduced by Senator Mark Hatfield
and Representative James Jeffords (see attached bills). I urge the Resource
Conservation Committee to support this legislation and recommend that the Federal
Government develop specific container legislation accordingly.
Presently, no alternatives, including the Washington state litter tax,
reduce the litter or solid waste problem as effectively as does deposit legislation.
The litter tax proposes to solve the litter problem by taxing manufacturers and
distributors of products found in litter. But according to Dr. Carlos Stern, an
economist at the University of Connecticut, this type of litter control tax actually
results in a tax on food and grocerieSj not a tax on containers and packaging. In
1973, over 737o of Washington's total litter tax receipts were derived from the
sale of food in one form or another, not from packaging sales. It is not surprising,
then, that a litter study done by the Or eg op Journal last fall found 1\ times as
many containers on Washington roadsides as in Oregon (Or egon Journal, October 25,
1976). Clearly, alternatives such as the litter tax do not encourage people to
stop littering; only mandatory deposits provide Americans with a strong incentive
to keep their containers off the streets.
The social aspects and consequences of mandatory deposit legislation are as
significant as their environmental ones. Primarily, the legislation reinforces
a traditional American concept that originated 200 years ago- namely, that of
dealing not with the symptoms of a problem but, more importantly, with its cause.
Deposit legislation reduces Che litter at: Its source; the law doesn't merely move
it around from place to place as does a litter tax or other litter pick-up efforts.
A negative aspect of the deposit legislation cAitroversy is that it often pits
thousands of earnest citizens against an industry devoted to spending as much as
$15 million a year on advertising campaigns intended to confuse voters ancl legislators.
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A return to returnables nationwide will refocus all of our efforts to improve the
environment by creating an accurate understanding of and responsibility for the
solid waste we create.
The economic aspects of beverage container laws are equally important. Accor-
ding to the Federal Energy Administration, if deposit legislation is implemented
by the late 1970's, a net increase of 118,000 ney jobs will have been created by
1982. As for direct consumer savings, a recent study done by the Vermont Agency
of Environmental Conservation indicates considerable savings to consumers and
beverage manufacturers alike. Based on actual beverage prices in Vermont, a family
that buys returnables can save an average of $60 per year, a significant amount
at a time when inflation has severely stretched family budgets.
Savings for distributors are significant, too. Spokesmen for Coca-Cola of
Barre, Vermont testified before a Vermont legislative committee in May, 1974 that
by switching to refillable bottles, the company experienced a net savings in
operating, costs of 52 cents per case of soda. Clearly, it is to the best economic
interests of both consumers and manufacturers to return to returnables.
In view of these statements, and the plethora of studies that exist concerning
deposit legislation, it seems that action, not further study is now required.
The only relevant study I foresee would involve documenting the effects of deposit
legislation in Michigan, the most industrial state yet to pass a mandatory deposit
law. Yet, the longer national deposit legislation is postponed, the more confusing
it becomes to implement in the future. And I em convinced at least two more states
will pass deposit legislation by the end of 1978, several more the following year
*^
and that we will have a national deposit bill soon after, if only because the ind-
ustry itself will be unable to do business in a checkerboard fashion across the
country. I strongly encourage the Resource Conservation Committee to recommend
national mandatory deposit legislation.
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action
Suite 731 1346 Connecticut Ave. NW Washington, DC 20036 1202)833-1846
U Ootobax 1977
Toi Barbara Blow, Chatman, Saaior Mvttyey Ccaadttaa,
Maaonrca Oonaarration Oaamlttaa
r»i Pwala Daaal, laglalativa Bapraaantativa, tnvlrnmtntal Action
A*i Durations niMd In Staff Backarowd Paper t 3, dated 9/15/77,
concerning •atlonal Depoolt Legislation
Z. Aa « general principle, BtTironaantal Action favors a national deposit
ayateB whtohllapoeea th« least federal intervention poeaifclwnpon the
bnwmg* indortzy to *Mt tb« veal* of ttw lagislation. to a Moeti gmatar
«act«nt than meft otbar pollution eontiol Ivgialation, a national dvpoait Uw
can b* Mlf-x^olatiag. Its •Uvlioity often tha IndlTidoal ••tin of tba
bav*zag« InAiatxy ~ a highly divana and onnattttTa yxoaf ~ oouidaxabla
opportunity to daelda how thay ehoaa to ooply with tha lav. Da mzg» tha
Baaouroa Oonaarvation Oowittaa to wlaot a pzopoaal vntoh antaila u littl*
fadaxal ragolatian aa poaaibla.
x. taaaaoama
Mona of tha alt«matiT«a liatad on p. 10 i» an aoaaptabla option to a national
dapoait la».
1. "Ho faoaral action.' Without fadaral action, tha bavaraoa Indoatzy will
ba oonfrontad by a uiaJ'mauai and Inoonaiatant patohmrfc pattaxn of
dapoait •yataax. Mhlla aoaa atatae hara takan tha laad An thair owa,
•oat othara will not.
2. "AltamatiYa Xadaral raynlattona.' A can ban la not politically riabla.
Handatory xaeyeUag 9oala for ladoatcy iaply «ha aeaplagc ravulatory
prooaaa cat op to olaan up our air and watax. In thia oaaa, a alaplac
altamativa, tha dapoait, la tha piafarabla option.
3. •Altamatira fadaral fiaoal and inaantiva •aaaarra." tha product oharaa,
If pcoparly daaignad, la co»patibla with a dapoeit Iw, It la not an
altaaaatlya. Tha littar tax providaa no inoantlva for waata radvotloai
It aaraly olaana op aftar tha probla* inataad of pwrantino it.
4. rublio adocation la a ooatly and loagtan pxooara which raqulXM oonttnual
and anpaualia nlnfomaMot. Bw Kaap laarloa Baantlfol progna la a olaar
dawmatzatlon of thia fact. (It alao banaflta tarn many built la aubaidlaa
which do not aha* op on ita balanoa ahaata, auoh aa fraa ataff or offloa apaoa.)
5. »aaaaroh, cJavalopBont and daamiatration frngraai an wmaaftart today. Tha
laaaa haa baan axtanatraly analymd. and tour atatai axa pxevldlag
' whara wa can amailna tha law'a affactiyanaaa.
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page two/Barbara Blum
XI. Design Issues. The following comments refer to the questions
raised In the Background paper, pp. 2-7.
1. Which beverages and eontainersaater1a1» should be Included?
a. Ideally, the national deposit law should extend to as wlds an array of
beverage eontalnara a* possible. However, in view of tha atranooua efforts
by Indnstry to block any legislation whatsoever, we raoogniaa that to
recommend such an extensive dsposit Mould siaat with even greater hostility.
Therefore, we recommend that the deposit apply only to soft drink and beer
bottles and cans. Such a system has two important factors working for iti
a proven regulable bottle systa», and an emerging recycling industry
enthusiastically tented by the Mtala Industry iteelf.
b. All rigid containers should be Included under UK deposit law, to addition to
class and Batal, this Includes plastic, despits the un re solved oontroveny
regarding the healthfulneas of plastic containers.
2. Deposit else structure.
a. Structuret A two-tier deposit, such as that in Oregon, would achieve the
energy and materials conservation benefit*. However, we acknowledge the
difficulty of actually enacting a two tier deposit at the national
level, and axe therefore willing, if reluctantly, to endorse a tingle,
uniform deposit.
b. Sisei He recommend a minimum five pent deposit on all containers. In
Oregon, the mandated deposit level (2* - standardised containers; 5* - all
others) was voluntarily raised by the bemsrage industry in order to recover
their containers. If a federal five cent deposit is insufficient after sane
tlsje, the seme will occur at the federal level on a voluntary basis, sines it
wMldbs in the economic best Interest of companies to recover the investment
mads in the oonalners.
3. Where should deposit originateT
The dsposit should originate at the point at which the container is filled.
Because the brewer both produces the beer and fills the oonalnen, beer
deposits should originate with him. In the ease of soft drinks, in general
the distributor purchases the syrup from the Main company, and then fills
tha bottle or can with the syrup and carbonated water. {The exception is the
small company which has complete control over the entire process.) Therefore,
the actual containerised drink originates with the distributor in the case
of soft drinks. Because of this disparity, we reuosmsiul that the legislation
designate the point of filling the container as the point of origin of the
deposit.
4. Implementation
a. Phasingi Provide a three year time lag, at marlmiie. Environmental
Action's preference is for a strict time-lag period efone year. Because of
the growing acceptance of the view that cans will retain their market shares,
relatively few adjustments will be needed for compliance. However, we are
willing to live with a three year time lag AX MOST. It should be pointed out,
however, that in cases where brewers and distributors ardently opposed deposit
iaws'"in" states" bef6re"the"ir" adoption, "they" "then quiclcly turned to'the' ta'sk of
making sure it succeeded, once adopted. One need only turn to Michigan and
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page three/ Barbara Blum
Main* for * current demonstration of this point.
Any period of tine longer than three years t* unnecessary, and would
needlessly postpone the day whan the measure's benefits ara realised.
Environmental action strongly opposes, any tine lag longer than three y»ar».
Th« implementation data should apply to all members of tha beverage
induatry equally. X schedule of staggered effective dates would
penalize tone companies at the expense of others unfairly, and such
dates cnald not be other than arbitrary.
b. Compensation. Aa pointed out by the staff study, specific compensation
programs at the federal level ara rare. Here important, successful
compensation programs are rarer still. Furthermore, the thr*e year tlae lag
provides ample tine for producers to adjust to the new system.
Despite energetic olalas to the contrary, there has been very littee job
loss demonstrated to be a direct result of the deposit laws currently
enacted. In fact, the latest report from Michigan indicates jobs are
being created in beverage container production due to the new law.
The level of capital investment in new equipment in the beverage industry
today is quite high, estimated by EPA to range fron half a billion to
one billion dollars per year. Because of this ongoing high investment
level, new investments (to adjust to a deposit law) would supplant, not
supplement current programs, thus raising the level of investment to
approximately $1.5 billion.
Instead of favoring new, special program to deal with tbswe who can denonstrata
financial loss as a direct result of a deposit law, we favor using the
existing federal programs for both labor and Industry where hardship cases
occur.
c. What to do with unrefunded deposits? «e agree with option li Ho
federal Intervention. The beverage industry is reasonably competitive,
and forfeited deposits can be expected to be redistributed through
reinvestments voluntarily.
5. Other issues.
a. pull tab ban. B.A. supports a pulltab ban. Aluminum, the predominant
material used la flip-tops, la not picked up by X-ray, and is therefore
extremely difficult to detect when swallowed. Although Industry is on the
right track developing alternatives, «mey will not continue to do so unless
the federal bill contains a ban.
b. deposits on carriers.This decision should be left to the beverage industry
to make where appropriate, not federally mandated.
c. Federal pre-emption. E.A. supports a pre euiptive federal law to eliminate
disparity and inequity among states.
I*
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s Hz
S i 1
$•
jw
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I
1 !
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tof. CHAIRMAN AND MEMBERS OF THE RESOURCE CONSERVATION COMMITTEE,
I AM DENNIS PI. DEVANEY, COUNSEL FOR THE FOOD MARKETING INSTITUTE
("FMI"). FMI IS A NON-PROFIT TRADE ORGANIZATION WHOSE OVER 900
MEMBERS INCLUDE BOTH RETAILERS AND FOOD WHOLESALERS, AMONG THOSE
MEMBERS ARE RETAILERS AND WHOLESALERS RANGING IN SIZE FROM THE
VERY SMALLEST TO THE LARGEST INCLUDING INDEPENDENT GROCERS;
CHAINS; AND BOTH VOLUNTARY AND COOPERATIVE WHOLESALERS.
APPROXIMATELY 20-25 PERCENT OF OUR MEMBERS OPERATE ONLY out STORE;
75 PERCENT OPERATE LESS THAN TEN STORES.
FOOD MARKETING INSTITUTE is ALSO A MEMBER OF THE LABOR
MANAGEMENT COMMITTEE FOR SOLID WASTE POLICY AND IN THAT RESPECT
WE ARE PRIVILEGED TO ASSOCIATE OURSELVES WITH THE REMARKS OF
MR. HOWARD CHESTER, CHAIRMAN OF THE LABOR MANAGEMENT COALITION
WHO WILL BE APPEARING BEFORE THE COMMITTEE LATER THIS AFTERNOON.
WE APPRECIATE THE OPPORTUNITY TO APPEAR TODAY TO GIVE A
BRIEF OVERVIEW OF OUR POSITION. WE INTEND TO FILE DETAILED
COMMENTS ON THE QUESTIONS CIRCULATED BY DEPUTY ADMINISTRATOR BLUM
WITHIN THE COMMENT PERIOD PROVIDED,
I BELIEVE THE TONE OF MY REMARKS CAN BEST BE STATED BY BORROWING
FROM A POLITICAL SLOGAN WHICH COMES OUT OF COLORADO'S REFERENDUM
CAMPAIGN OF LAST IJOVEMBER IN WHICH THE VOTERS OF COLORADO,
A STATE WHICH I'M SURE MOST PEOPLE WDULD PERCEIVE AS CLEARLY
ENVIRONMENTALLY CONSCIOUS, SfWrHJ A FORCED DEPOSIT PROPOSAL BY
BETTER THAN A TWO-TO-ONE MARGIN. THE PHRASE THAT CAPTURES THE
ESSENCE OF MY REMARKS TODAY IS "RIGHT PROBLEM, WRONG SOLUTION".
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As THE COMMITTEE is WELL AWARE, THE HISTORY OF THIS ISSUE IN
THE CONGRESS AND THROUGHOUT THE STATE LEGISLATURES is A LONG ONE,
AND iTHIliK IT IS FAIR TO SAY THAT THE RHETORIC ON BOTH SIDES,
TllOqf'vitIO *KE PROPONENTS OF DEPOSIT LEGISLATION AND THOSE WHO
ARE OPPOSED TO DEPOSIT LEGISLATION, HAS SOMETIMES BEEN EXCESSIVE.
WE AT THE FOOD MARKETING INSTITUTE, WHICH is A NEW ORGANIZATION
THAT GREW OUT OF THE MERGER OF THE SUPER MARKET INSTITUTE AND THE
NATIONAL ASSOCIATION OF FOOD CHAINS IN ORDER TO CREATE A MORE
UNIFIED VOICE FOR THE RETAIL AND WHOLESALE GROCER IN WASHINGTON
AND THE STATE CAPITOLS VIEW OURSELVES AS PURCHASING AGENTS FOR
OUR CONSUMERSV^N THAT REGARD, MANY OF OUR COMPANIES AND OUR
ASSOCIATION HAVE ADOPTED WHAT HAS SOMETIMES BEEN CALLED A
CONSUMER'S BILL OF RIGHTS. ONE OF THE MOST IMPORTANT OF THE RIGHTS
ARTICULATED IS THE CONSUMERS RIGHT TO FREEDOM OF CHOICE IN THE
MARKETPLACE.
OUR MEMBERSHIP IS ALSO IN THE UNIQUE POSITION OF HAVING DONE
BUSINESS IN TWO STATES, OREGON AND VERMONT WHICH HAVE ALREADY
ENACTED FORCED DEPOSIT LAWS. IN A TIMELY ART 1 CMi WU1W-ff*p£AREI^
IN THIS MONTH'S PROGRESSIVE GROCER MAGAZINE, AN EXTENSIVE ANALYSIS
OF THE EXPERIENCE OF RETAILERS IN THE STATES OF OREGON AND VERMONT
IS PRESENTED. I AM ENCLOSING AS AN APPENDIX TO MY TESTIMONY A
COPY OF THE PROGRESSIVE GROCER ARTICLE AND WILL SEND DIRECTLY TO
THE RESOURCE CONSERVATION COMMITTEE MEMBERS AND THE SENIOR POLICY
GROUP REPRINTS OF THIS ARTICLE, IT REPRESENTS THE BEST CURRENT
DATA WHICH I HAVE SEEN ON WHAT IS REALLY HAPPENING FROM THE
PERSPECTIVE OF THE PEOPLE WHO LIVE AND DO BUSINESS WITHIN A
DEPOSIT REGIME.
- 2 -
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THE BASIC CONCLUSIONS OF THE PROGRESSIVE GROCER ARTICLE WERE
DEVELOPED THROUGH VISITS TO SUPERMARKETS IN OREGON AND VERMONT,
QUESTIONNAIRES TO 127 STORE OWNERS AND OPERATORS, AND EXTENSIVE
INTERVIEWS WITH BUSINESS, ENVIRONMENTAL, AND GOVERNMENT LEADERS
FAMILIAR WITH TOEISSUE.
I DO NOTytlNTEND TO DETAIL THE ANALYSIS IN THE ARTICLE WHICH
I HAVE SUBMITTED AS PART OF MY TESTIMONY, BUT I WOULD LIKE TO
HIGHLIGHT SOME OF THE CONSLUSIONS WHICH ARE IMPORTANT TO OUR
CUSTOMERS AND TO US.
•PRICES OF SOFT DRINKS AND BEER IN BOTTLE BILL STATES
ARE AS HIGH OR HIGHER THAN IN NEIGHBORING STATES
(PROPONENTS HAVE SUGGESTED A CHEAPER PRODUCT WILL BE
ONE OF THE RESULTS OF DEPOSIT LEGISLATION).
•THERE HAS BEEN A DECREASE IN BEVERAGE BUSINESS,
CANS AND NON-REFILLABLE BOTTLES ESPECIALLY HAVE
SUFFERED AND PRIVATE LABEL HAS DECLINED.
•CLUTTERED FRONT OF STORE. THREE OUT OF FOUR STORES
ACCEPT RETURNABLES AT THE FRONT END YET THE MEDIAN
AMOUNT OF SPACE PROVIDED THERE IS ONLY 32 SQ. FT.
•SANITATION CLEAN UP AND PICK UP is MORE INTENSE AND
EXPENSIVE UNDER FORCED DEPOSIT CONDITIONS. UNWASHED
CONTAINERS SMELL, PARTIALLY FILLED CONTAINERS SPILL,
BOTTLES BREAK AND SOME OPERATORS FIND THEY HAVE
INCREASED THE FREQUENCY OF EXTERMINATOR SERVICES.
- 3 -
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COSTS HAVE INCREASED,
'ADDITION OF STORAGE SPACE HAS BEEN NECESSARY IN
BACKROOM AREAS. A MEDIAN OF 250 SQ. FT. OF BACKROOM
SPACE IS DEVOTED TO RETURNABLES. ONE-QUARTER OF
RETAILER RESPONDENTS FIND IT NECESSARY TO AUGMENT
THIS WITH 200 SQ. FT. OF SPACE OUTSIDE THE STORE.
IN SUMMARY, AS THE ARTICLE CONCLUDES, THE FORCED DEPOSIT APPROACH
REDUCES CONSUMER CHOICE, CAUSES EXPENSIVE DISRUPTIONS FOR
RETAILERS AND WHOLESALERS, AND REPRESENTS A HEAVY COST TO THE
CONSUMER IN THE LONG RUN.
IN ORDER TO GET A BETTER HANDLE FROM A SCIENTIFIC PERSPECTIVE
ON WHAT ACTUAL CONSUMER ATTITUDES AND RESPONSE TO RESTRICTIVE
CONTAINER LEGISLATION ARE, WE HAVE COMMISSIONED PROFESSOR
PHILIP KUEHL TO DO A CONSUMER ATTITUDE STUDY IN FAIRFAX COUNTY,
VIRGINIA AND MONTGOMERY COUNTY, MARYLAND. THE SAMPLE SIZE FOR
OUR INTERVIEW PROCESS WILL BE APPROXIMATELY 800. As THE COMMITTEE
is AWARE, FAIRFAX COUNTY BEGAN ENFORCING A SOFT DRINKS ONLY
DEPOSIT PROGRAM IN THE BEGINNING OF SEPTEMBER, IN MONTGOMERY
COUNTY, MARYLAND, A DEPOSIT ORDINANCE is SCHEDULED TO BE
IMPLEMENTED ON JANUARY 1, 1978. IN ADDITION, THE COUNTY'S PROPOSED
TAX ON ONE-WAY CONTAINERS AT THE RATE OF TWO CENTS ON CONTAINERS
UP TO 16 OUNCES AND FOUR CENTS ON CONTAINERS ABOVE 16 OUNCES HAS
RECENTLY BEEN UPHELD BY THE COURT OF APPEALS OF MARYLAND (THE
STATE'S HIGHEST COURT) AND IT is EXPECTED THAT THE COUNTY WILL
BEGIN ENFORCING THE TAX LAW WITHIN THE NEAR FUTURE. WE PLAN TO
USE MONTGOMERY COUNTY BEFORE ANY ORDINANCE is IN PLACE AS A CONTROL
GROUP TO COMPARE WITH FAIRFAX COUNTY AND WOULD EXPECT TO FOLLOW-UP
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BY-LAWS OF FOOD MARKETING INSTITUTE
TABLE OF CONTENTS
ARTICLE I. PHILOSOPHY AND
OBJECTIVES
Page
. . . 1
ARTICLE II. OFFICES
Section 1. Registered Offices . .
Section 2. Other Offices
ARTICLE HI. MEMBERS 2
Section 1 Qualifications
Section 2. Admission to Membership
Section 3. By-Laws
Section 4. Certificate of Membership
Section 5. Termination of Membership
by Resignation
Section 6. Termination of Membership
upon Certain Events
Section 7. Expulsion
(a) Violation of By-Laws or
Resolutions
(b) Expulsion for Non-Payment of
Dues, Special Fees, Special
Charges, or Assessments
Section 8. Termination of Rights
Section 9. Honorary Membership
Section 10 Representative
Section 1 1 . Member Personnel Authorized
to Participate in Corporation
Affairs
Section 12. Use of Food Marketing
Institute Legend
ARTICLE IV. MEMBERSHIP DUES
AND ASSESSMENTS
Section 1 . Membership Dues
Section 2. Schedule of Dues
Section 3. Apportionment of Dues
Section 4. Maximum Dues
Section 5 Special Fees
Section 6 Assessments
Section 7. Reoorts
2
. 2
. 3
. 3
. 3
. 3
. 3
. 3
3
. 3
. 3
3
. 4
4
. 4
. 4
. 4
. 4
. 4
4
5
5
JCI.UUH
ARTICLE
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
O. '
VI.
1.
2. i
3. '
4.
5.
6,
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
ARTICLE V.
Section 1 .
Section 2.
Section 3.
Section 4.
Section 5.
Section 6.
Section 7.
Section 8.
ARTICLE VI
Section 1 .
Section 2.
Section 3.
Section 4.
Section 5.
Section 6,
Section 7.
Section 8.
Section 9.
Section 10.
Section 1 1 .
Section 12.
Section 13.
Section 14.
Section 15.
Section 16.
Section 17.
Section 18.
Section 19.
Section 20.
Section 21.
Section 22.
Paf
MEETINGS OF MEMBERS . . .
Annual Meeting
Special Meetings
Notice of Meetings
Quorum
Proxies and Voting
Organization
Voting List of Members
Consent of Members in Lieu
of Meeting
DIRECTORS
Number and Classification of
Directors
Qualifications of Directors
Term of Office
Honorary Board Members
One Directorship to a Member . .
Resignations
Director's Resignation from
a Member
Termination of Director Upon
Certain Events
Proxies
Vacancies
Powers
Regular Meetings of the
Board of Directors
Special Meetings of the
Board of Directors
Notice of Special Meetings
Quorum
Organization
Committees
Non-voting Directorships
Actions by Directors Without
a Meeting
Meeting by Conference
Telephone
Removals
Salary
?e
5
5
5
5
5
5
5
6
6
6
6
6
6
7
7
7
7
7
7
7
7
7
7
8
8
8
8
8
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8
8
8
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By-Laws
of
Food Marketing Institute
Article I
PHILOSOPHY AND OBJECTIVES
STATEMENT OF PHILOSOPHY
The grocery retailer, from the smallest corner
store to the largest supermarket company, is the
purchasing agent for the customer. At the same time,
the grocer and his close working partner, the grocery
wholesaler, are the means by which the farmer and
other producers make their products available to the
public. In these two functions, the grocery retailer
and wholesaler serve to satisfy fundamental needs
of everyone in our society.
Food Marketing Institute is designed to help the
grocery retailer and wholesaler discharge their re-
sponsibilities to the customer in moving food from the
producer to the consumer in the most efficient possible
manner.
Food Marketing Insiitute is committed to main-
taining and improving a system of distribution of
grocery products which is responsive to the chang-
ing needs and wants of our customers and, at the
same time, is sensitive to social, economic and gov-
ernmental concerns.
Food Marketing Institute is dedicated to the
principles of free enterprise, vigorous competition,
and the economic health of the entire food industry.
In keeping with these principles, the organization
functions in four general areas: research, education,
public information and government relations.
Membership commitment and involvement are
essential to the effective performance of the organiza-
tion. By law and the nature of the industry, the mem-
bers engage in hard and continuous competition. But
within the organization they must work together, un-
selfishly and with mutual respect, to insure a frank
and effective response to government, to customers,
and to employees. Cooperation is also necessary to
raise the total level of service to society.
As a representative of the largest single business
category in the world. Food Marketing Institute will
encourage, develop, and recognize statesmanship
among its members.
Food Marketing Institute's posture will be fac-
tual, thorough, and objective. It will represent the
common interests of its members before legislatures
and regulatory agencies, either directly or by coop-
erating with other organizations representing various
facets of the food industry. It will speak out for the
industry, where appropriate, and will follow a policy
of encouraging the development of a uide breadth
of leadership which individually as well as collec-
tively can represent the industry to its various pub-
lics.'
We see the following qualities of corporate
character as fundamental in the administration of
Food Marketing Institute:
Integrity. All elected and appointed officials and
the staff of Food Marketing Institute must maintain
a reputation for openness, honesty, and trust. The
integrity of the organization must never be com-
promised.
Awareness. Food Marketing Institute must de-
velop and maintain facilities, programs, and systems
to keep its members aware of problems and oppor-
tunities that will affect the successful operation of
their businesses. Its scope of interests will, therefore,
include customer needs; government activities; new
technologies; equipment and systems; finance; em-
ployee relations; the media; and the many powerful
forces in our society which call for socio-economic
change.
Open-Mindedness. Food Marketing Institute
must be prepared to face a wide variety of critics,
both constructive and hostile. It must listen care-
fully to insure that criticism that seems to be merely
hostile does not obscure new and creative ideas for
improvement.
Objectivity. Food Marketing Institute must pro-
vide facts for the industry, its customers, its em-
ployees, and government. It must seek out, organize,
store, and make those facts readily available to all
interested parties. As a public service, it will provide
access to its library for all who request help. When
necessary, it must be prepared to challenge its own
membership on conditions which need change.
Through its officers, committees, and staff,
Food Marketing Institute will utilize its full resources
and bring together the best available minds to ensure
that the programs of the organization are sound and
in the public interest. In this area there can be no
compromise. This means that the members must be
willing to share. The staff of the organization must be
carefully chosen from the best available professional
talent. Food Marketing Institute must also seek
guidance from the most dispassionate and best quali-
fied outside advisors. And, in all of its activities and
actions the interests of the customer will be given
first consideration.
STATEMENT OF OBJECTIVES
Public Affairs Objectives
(Public Information and Government Relations)
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• Serve ,is a spokesman for ihe groeerv distribution
mdustrv. based on the broadest possible member-
ship
• Erfechvelv present (he views of the membership
to (a) government and (b) our various publics
(customers, producers, suppliers, employees, edu-
cators, the media, etc.). based on thorough re-
search and using the best educational approaches.
• Anticipate likely key issues and he prepared to
meet them, and respond effectively to grocery dis-
tribution problems through positive action pro-
grams in the public interest.
• Improve communications with grass roots sources
on legislative matters, through a strong and con-
sistent program of regional and state liaison.
• Cooperate with government, customers and other
grocer\ industry groups toward the end of pro-
moting goals in the area of grocery distribution
which are in the national interest.
• Represent the interests of our customers to (a)
government and (b) our other publics.
• Assist and cooperate with individual member com-
panies on government representation and public
information matters.
• Develop systems which maximize the involvement
of members in public and government affairs.
• Enlarge opportunities for business growth and de-
velopment within (he changing social and govern-
mental environment.
Research Objectives
• Build and maintain a comprehensive data bank
and library so as to provide the members, our
industry, government, and others with broadly
based, standard data about the financial and oper-
ating performance and conditions in our industry.
• Provide members with information and ideas per-
taining to efficient operations, in such areas as
technological improvements, availability of new
equipment, architectural designs, merchandising,
management, controls, etc.
• Search out and report new ideas wherever they
may be found, to improve the efficiency of grocery
distribution.
• Identify new areas of emerging interest or concern
and collect, develop and prepare for dissemination
helpful ideas in these areas, so as to alert members
to technological ;md operational changes and op-
portunities.
• Conduct total systems research aimed at defining
and clarifying inefficiencies in grocery distribution
in order to enable further improvements.
• Stimulate and give guidance to available and po-
tential resources outside the grocery distribution
industry, to help improve the efficiency of grocery-
distribution.
Education (>b)ecMves
skills and knowledge so ;is to increase productive
and eriieiency
• Provide a total coordinated educational program
for various levels and functions of grocery dis-
tribution industry personnel.
• Teach new systems, techniques and management
concepts.
• Make member personnel more aware of the chang-
ing economic, social and governmental environ-
ment in which they must operate.
• Build employee morale by promoting a better ap-
preciation of the contribution made by their in-
dustry.
• Develop materials about grocery distribution for
use by educational institutions.
Article II
OFFICES
Section !. REGISTERED OFFICE. The regis-
tered office of the Corporation shall be in Washing-
ton. District of Columbia.
Section 2. OTHER OFFICES. The Corpora-
tion may also have offices in such other place or
places within or without the District of Columbia as
the Board of Directors may establish.
Article III
MEMBERS
Section 1. QUALIFICATIONS.
(a) Any person, firm, partnership, association,
cooperative, or corporation, which directly or through
subsidiaries, or otherwise. (J1 is either a retailer which
owns or operates at least one food store (as denned
below), or (ii) a wholesaler ( as defined below) sell-
ing to food stores, is eligible to become a member of
the Corporation.
(b) The term "food store" means an entity
primarily engaged in selling food and/or grocery
products for consumption and not for resale.
(c) The term "wholesaler" means an entity
primarily engaged in selling a general line of food
and related products to food stores.
Section 2. ADMISSION TO MEMBERSHIP.
Am entity eligible for membership under the provi-
sions of Section 1 of this Article, which desires to
become a member of the Corporation shall make
application in such form as the Board of Directors
may prescribe. If the President or his designee deter-
mines that the applicant is eligible for membership,
the President or his designee may approve the appli-
cation of such applicant. Decisions of the President
or his designee are subject to review by the Board of
Directors.
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Section 3. BY-LAWS. Each applicant for mem-
bership shall be bound by these By-Laws and all
amendments.
Section 4. CERTIFICATE OF MEMBER-
SHIP. Each member in good standing shall be en-
titled to a Certificate of Membership in the form
approved by the Board of Directors. Such certificate
shall be surrendered upon termination of member-
ship. Membership in this Corporation and the Cer-
tificate of Membership shall be non-assignable and
non-transferable.
Section 5. TERMINATION OF MEMBER-
SHIP BY RESIGNATION. Any member may re-
sign by resignation made in writing and filed with
the Corporation. A resignation shall be effective im-
mediately upon its filing to terminate membership,
provided that all arrearages in assessments and dues
of such member are paid, including dues for the fiscal
year in which the member resigns. All services of the
Corporation to the resigning member shall cease
upon the receipt of the resignation. The resignation
of a member shall effect the resignation of its Repre-
sentative and any alternate (see Section 10 of this
Article) and any employee of such member who
holds office in the Corporation or serves on its Board
of Directors or committees. For purposes of these
By-Laws, the term "employee," when used in con-
nection with a member, shall mean any employee,
officer, director or partner of such member.
Section 6. TERMINATION OF MEMBER-
SHIP UPON CERTAIN EVENTS. Membership in
the Corporation shall terminate upon the withdrawal
from, or cessation of the business of the member, or
upon such an alteration in the nature of the member's
business as would disqualify the member from being
granted membership.
Section 7. EXPULSION.
(a) Violation of By-Laws or Resolutions. Any
member who violates any of the By-Laws or resolu-
tions of this Corporation may be expelled by a two-
thirds vote of the Board of Directors at any regular
or special meeting of the Board at which a quorum
is present. No member shall be expelled unless writ-
ten charges shall be made against him and filed at the
principal office of the Corporation. Such charges
may be made by any member or by an officer or
director of the Corporation. The written statement
of charges shall contain a clear and concise state-
ment of the facts claimed to constitute cause for ex-
pulsion. The President of the Corporation shall mail
a copy of such charges by registered mail to the mem-
ber against whom the complaint is made. Notice of
the meeting of the Board of Directors at which the
charges are to be acted on shall be given to the mem-
ber by registered mail not less than twenty days be-
fore the date set for the meeting. The member com-
plained against shall have the right to appear and
to be heard in person at such meeting and shall be
entitled to be represented by counsel.
(b) Expulsion for Non~Payment of Dues, Spe-
cial Fees, Special Charges, or Assessments. If any
member shall fail to pay dues, special fees, special
charges, or assessments within a period of ninety days
after said dues, fees, charges, or assessments become
due and payable, such member shall be automatically
suspended from all rights and privileges of member-
ship until all arrearages are paid. If such arrearages
are not paid within three months of the due date, and
after thirty days' notice to the delinquent member,
either the Board of Directors or the Executive Com-
mittee may expel such member from the Corporation.
Expulsion for such causes shall have the effect of a
resignation under the provisions of Section 5 of this
Article. The expulsion of a member shall not ter-
minate the obligation of such member to pay all dues,
fees, charges, and/or assessments in arrears on the
date of its expulsion, including dues for the current
fiscal year. The Executive Committee in its discretion
may allow a member to continue actively in the Cor-
poration although the member has not complied fully
with the provisions of Article IV.
Section 8. TERMINATION OF RIGHTS. The
right of any member to vote, and all of the right, title
and interests of the member in the Corporation shall
cease on the termination of its membership and the
member and its heirs, successors and assigns shall
have no further claim against the Corporation, the
other members or the Representatives.
Section 9. HONORARY MEMBERSHIPS.
The Board of Directors by the affirmative vote of
two-thirds of all its members may elect as an Honor-
ary Member of the Corporation
(a) any distinguished person who has per-
formed important services for the Corporation or
for the food marketing industry;
(b) any former officer, director, or member of
the Corporation; or
(c) any former employee or representative of
a member who has performed important services for
the Corporation or the food and grocery industry.
Honorary Members shall have all the privileges
of a member, except that they shall not have the right
to vote or the right to hold any office. They shall be
exempt from the payment of any dues or other charges
as specified in Article IV.
Section 10. REPRESENTATIVE. Each mem-
ber shall appoint a Representative and certify his
name to the Corporation. The Representative shall
cast the member's vote and shall act for the member
in all affairs of the Corporation. Appointment of a
Representative shall not prevent other officials of a
member from holding office in the Corporation, or
from serving on the Board of Directors or commit-
-------
tees. A member may change its Representative at will,
or appoint an alternate who may act for the member
in the absence of the Representative by giving written
notice to the Corporation. For purposes of these By-
Laws, the term "member" shall mean either the mem-
ber or its Representative or alternate.
Section 11. MEMBER PERSONNEL AU-
THORIZED TO PARTICIPATE IN CORPORA-
TION AFFAIRS. Personnel of each member who are
carried on the payroll of such member on a full-time
basis are eligible to participate in Corporation meet-
ings and to receive Corporation publications. Cus-
tomers or members of wholesaler or cooperative
groups, consultants, and affiliates of any member are
not eligible to participate in internal Corporation
activities unless they individually qualify and join
the Corporation.
Section 12. USE OF FOOD MARKETING
INSTITUTE LEGEND. Active members of the Cor-
poration in good standing, subject to rules and regu-
lations of the Board, may in their labels and stationery
use the legend "Member Food Marketing Institute,"
provided that the legend shall not be so used as to
give consumers an impression of quality or grade of
products or service.
Article IV
MEMBERSHIP DUES AND ASSESSMENTS
Section 1. MEMBERSHIP DUES. Member-
ship dues shall be paid for the period commencing
January 1 and ending December 31 in each year and
shall be in graduated amounts depending upon total
volume of sales as set forth in the schedule of dues in
Section 2 of this Article. All dues shall be payable in
accordance with the dues billing and calculation
statement to be sent to all members on or about
January 1 of the year in which dues are owing. The
Board of Directors may establish dues at some other
amount, greater or less, than those set forth in said
schedule.
Section 2. SCHEDULE OF DUES. The annual
dues for each period commencing on January 1 and
terminating on December 31 of the same year shall
be based on total company sales for the year ending
on December 31, or on the nearest Saturday to De-
cember 31, which immediately precedes the year for
which dues are owing, as follows:
(a) For sales of food stores or wholesalers (as
defined in Section 1. Article III) located in the
United States,
(i) members with only food stores pay dues
based on total sales;
(ii) members with food stores and wholesale
operations pay dues based on total sales
of food stores plus 50% of wholesale
sales;
(iii) members with only wholesale operations
pay dues based on 50% of total sales.
Annual Dues
Dollar Amount
Sales Categories
Up to $2 million
$2 million
to $5 million
$5 million
to $10 million
$10 million
to $50 million
$50 million
to $150 million
$150 million
to $500 million
$500 million
to $2 billion
Over $2 billion
1977
$100
$200
$300
$300 plus $50
per $1 million
of sales over
$10 million
$2.300 plus $40
per $1 million
of sales over
$50 million
$6,300 plus $33
per $1 million
of sales over
$150 million
$17,800 plus $17
per $1 million
of sales over
$500 million
$43,300 plus $9.75
per $1 million
of sales over
$2 billion
1978
$100
$200
$300
$300 plus $50
per $1 million
of sales over
$10 million
$2,300 plus $52
per $1 million
of sales over
$50 million
$7.500 plus $35
per $1 million
of sales over
$150 million
$19,750 plus $23
per $1 million
of sales over
S500 million
$54,250 plus $10
per $1 million
of sales over
$2 billion
(b) For sales of food stores or wholesaler op-
erations not located in the United States, dues are
as established by the Board of Directors.
(c) Sales by a wholesaler to entities which are
members of the Corporation are excluded from the
sales of the wholesaler for the purposes of this sec-
tion.
f d) Sales of holding company members do not
include the sales of subsidiary or associated entities
which are members of this Corporation.
(e) A member wbo owns more than 50% of
a food store or wholesaler operation pays dues based
upon the total sales of that entity.
Section 3. APPORTIONMENT OF DUES.
Newly admitted members shall pay as dues for the
current year a percentage of the annual dues equal
to the number of months remaining (excluding the
month of admission) divided by twelve (12). Newly
admitted members shall pay said dues within thirty
days after the date of mailing to such member a no-
tice of admission to membership and the amount due.
Section 4. MAXIMUM DUES. Notwithstand-
ing the provisions of this Article, a member is not
required or permitted to pay more than 5% of the
Corporation's budget of total membership dues.
Section 5. SPECIAL FEES. The Board of Di-
rectors may establish special fees for members which
join any special service, division or section which
-------
may be established by the Board. These fees shall
be in addition lo the dues provided for in this Article.
The Board of Directors may change the amount of
such special fees or eliminate them.
Section 6. ASSESSMENTS. The Board of Di-
rectors may levy and collect assessments from the
members in any year. Such assessments shall be pay-
able as prescribed in (he assessment, and shall be
levied in the same proportion that dues have been
levied on members for the current year. Members
who have been admitted to the Corporation during
the year in which the assessment is made and prior
to the making of the assessment, shall be assessed
proportionally in accordance with Section 3 of this
Article.
Section 7. REPORTS, Each active member shall
report to the Corporation on and in accordance with
a dues billing and calculation statement, their sales
for the year ending on December 31, or on the nearest
Saturday to December 31, which immediately pre-
cedes the year in which the report is made. Except
for sales volume categories, the information con-
tained in the report shall be kept confidential by the
Corporation.
Article V
MEETINGS OF MEMBERS
Section I. ANNUAL MEETING. The annual
meeting of members of the Corporation for the elec-
tion of directors and for the transaction of such busi-
ness as may properly come before ihe meeting shall
be held at such time and place, within or without the
District of Columbia, as the Board of Directors may
designate. At the annual meeting, the members shall
elect a sufficient number of directors to fill all direc-
tor vacancies and shall elect the officers of the Cor-
poration in accordance with Section 1, Article VIII.
Section 2. SPECIAL MEETINGS. Special
meetings of the members of the Corporation for anv
purpose or purpose*; may be held at any place within
or without the District of Columbia. Special meet-
ings may be called at any time by the Chairman, by
the President, by a majority of the Executive Com-
mittee, by a majority of the Directors of the Corpora-
tion, or by not less than one-third of the members of
the Corporation. The notice of such special meeting
sent to the members shall specifically state the time
and place of the meeting and the purpose for which
it is to be held.
Section 3. NOTICE OF MEETINGS. Except
as otherwise provided or permitted by law, the Arti-
cles of Incorporation, or these By-Laws, the Chair-
man of the Board, the President, or the Secretary
shall give written notice of the time, place, and pur-
pose or purposes of all meetings of the members to
each member entitled to vote either by serving such
notice upon him personally or by mailing the notice
to the member at its address as it appears on the
records of the Corporation. This notice shall be
given at least ten days, but not more than forty days,
prior to the date fixed for a meeting.
Section 4. QUORUM.
(a) One-third of the members in good standing
entitled to vute, present in person or by proxy, shall
be sufficient to constitute a quorum at all member
meetings for the transaction of business, except as
otherwise provided by law', by the Articles of In-
corporation of this Corporation, or by these By-Laws.
Whether or not a quorum is present, the members
entitled to vote, present in person or by proxy, shall
have power to adjourn and reconvene the meeting.
No notice need be given other than announcement at
the meeting of the time and place of the reconvened
meeting. At such reconvened meeting, any business
may be transacted which might have been transacted
at the original meeting. If any adjournment, whether
or not a quorum is present, is for more than thirty
days a notice of the reconvened meeting shall be
given to each member entitled to vote.
(b) Where a quorum is present at any meeting,
ihe vote of a majority of the members present in per-
son or by proxy shall decide any question brought
before such meeting, unless the question is one as to
which, by express provision of law, the Articles of
Incorporaiion. or these By-Laws, a larger or differ-
ent vote is required, in which case such express provi-
sion shall govern and control the decision of the
queslion.
(c) The members present or represented at any
duly called and held meeting at which a quorum is
present or represented may continue to do business
uniil adjournment, notwithstanding the withdrawal
of a number leaving less than a quorum.
Section 5. PROXIES AND VOTING. At any
meeting of members, each member is entitled to one
vote. The member may exercise such voting right
either in person or by written proxy which shall be
filed with the secretary of the meeting before being
voted. A member may vote through its Representa-
tive or alternate. Proxies shall entitle their holders to
vote at any meeting reconvened after adjournment
of the meeting to which the proxy related, but shall
not be valid after the final adjournment of said meet-
ing. All questions regarding the qualifications of
voters, the validity of proxies, and the acceptance or
rejection of votes shall be decided by inspectors of
election w'ho shall be appointed by the Chairman of
the Board, the President or by the presiding officer
of the meeting. Except as otherwise expressly re-
quired by statute, the vote on any question need not
be by written ballot.
Section 6. ORGANIZATION. Each meeting
of members shall be presided over by the Chairman
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of the Board or the President. The Secretary or any
person designated by the person presiding at the meet-
ing shall act as secretary of the meeeting.
Section 7. VOTING LIST OF MEMBERS. The
Secretary shall prepare and make available, at least
thirty days before every meeting of members, a com-
plete list of the members entitled to vote at the meet-
ing, showing the address and name of each such
member. This list shall be open to the examination
of any member, for any purpose related to the meet-
ing, during ordinary business hours for a period of at
least ten days prior to the meeting.
Section 8. CONSENT OF MEMBERS IN
LIEU OF MEETING. Unless otherwise provided
by law or in the Articles of Incorporation, any action
ordinarily taken at an annual or special meeting of
the members, may be taken without a meeting, if a
consent in writing, setting forth the action to be taken,
shall be signed by all of the members entitled to vote
with respect to the subject matter thereof. Evidence
in writing of such consent shall be delivered to the
Secretary of the Corporation for filing with the
minutes.
Article VI
DIRECTORS
Section I. NUMBER AND CLASSIFICA-
TION OF DIRECTORS.
(a) The number of directors shall be fifty-five
(55), initially fifty-eight (58), or as otherwise pro-
vided by the Board of Directors.
(b) There shall be eleven (11) classifications
of directors with the designated number of directors
for each category as set forth below:
Classification
Up to $10 million in sales
$10 million to $25 million in sales
$25 million to $100 million in sales . . .
$100 million to $250 million m sales
$250 million to $1 billion in sales
Over $1 billion in sales
Wholesalers
Directors at Large (Retailers and Wholesalers)
Up to $25 million in sales . ....
$25 million to $100 million in sales .. .
$100 million to $250 million m sales .
Over $250 million in sales
Regional Directors ....
Canada .... .. ...
International (other than U. S. and Canada)
Past Chairmen
Officers
Chairman ..
Vice Chairmen .... ...
President . ., ....
TOTAL
Number of
Directors
(c) For the purposes of subsection (b) Past
Chairmen are defined as the last three Chairmen of
the Corporation, unless they are no longer active in
the ownership or operation of food stores or whole-
sale operations, in which case the definition shall in-
clude the next preceding former chairman of the
corporation who is so active. Initially the three Past
Chairmen shall be defined to mean the three imme-
diate Past Chairmen of Super Market Institute, Inc.
(''SMI"), and the three immediate Past Chairmen of
National Association of Food Chains ("NAFC"),
unless they are no longer active in the ownership or
operation of food stores or wholesaler operations, in
which case the definition shall include the next pre-
ceding former chairman of SMI or NAFC who is so
active. Each new Past Chairman for the Corporation
will replace both the Chairman for SMI and the
Chairman for NAFC who have been out of office for
the longest time.
Section 2. QUALIFICATIONS OF DIREC-
TORS.
(a) No person shall be eligible to be a director
of the Corporation unless he is either:
(i) personally a member of the Corporation;
(ii) one of the partners or an employee of a
partnership member of the Corporation;
(iii) an officer, director, or full-time employee
of a corporate member of the Corporation;
or
fiv) an officer of the Corporation.
(b) If a director elected in a particular cate-
gory is elected an officer of the Corporation, he shall
serve in only the officer directorship category.
(c) A director elected to fill a sales volume
category directorship shall remain in that director-
ship for the duration of his term even though the
member company he represents has changed sales
volume categories.
(d) If there are not a sufficient number of
members in a given sales volume category to furnish
the number of directors specified for that category
in Section !(b) of this Article, or if there are not a
sufficient number of members in a given sales volume
category who are qualified to serve as directors of
the Corporation, a director may be chosen from the
next closest sales volume category.
Section 3. TERM OF OFFICE.
(a ) The initial Board of Directors appointed in
the Articles of Incorporation and all Directors ap-
pointed prior to the first annual meeting of members
shall serve only until that meeting. In the first election
by members of directors, the Board of Directors shall
be elected so that one-third serve 1-year terms, one-
third serve 2-year terms, and one-third serve 3-year
terms in order to stagger the terms of the directors.
The directors in the following classifications-—sales
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volume groups, wholesalers, at large, and regional—
shall be divided as closely as possible among 1-year,
2-year and 3-year terms. The board nominated for the
first election should, to the extent possible, retain two-
thirds of the directors who serve until the first
election.
(b) After the first election of directors, all
directorships shall be for a three-year term. A direc-
tor may be elected to two consecutive three-year
terms and thereafter is no longer eligible for re-elec-
tion as a director until the lapse of at least one year.
The provision requiring a lapse of one year shall not
apply to Past Chairmen, or to those directors who
are then officers or who are to be elected officers.
This limitation on the term of office of a director
does not make another individual connected with a
member ineligible for election as a director.
(c) The word "term" and the words "term of
one year" and "one year", as used in this Section, and
in Section 1 of Article VIII, mean the time between
two consecutive annual meetings, whether more or
less than 365 days.
Section 4. HONORARY BOARD MEMBERS.
Former chairmen of the Corporation, as well as all
former chairmen of NAFC and SMI, other than the
three immediate Past Chairmen {as defined in Sec-
tion 1 of this Article), are honorary members of the
Board of Directors and may attend and participate
in all Board meetings without vote. Honorary Board
Members are not counted as directors. This privilege
may be withdrawn at any time by the Board of Di-
rectors.
Section 5. ONE DIRECTORSHIP TO A
MEMBER. A member may fill only one director-
ship at a time; this limitation is applicable to the
three Past Chairmen but not to Honorary Board
Members.
Section 6. RESIGNATIONS. Any director may
resign at any time by giving written notice to the
Board of Directors, the Chairman of the Board, the
President, or the Secretary. Any member of any
committee may resign at any time by giving notice
either to the committee or to its chairman.
Section 7. DIRECTOR'S RESIGNATION
FROM A MEMBER. If a director resigns from or
otherwise leaves a member, or resigns as a member,
the director shall be deemed to have automatically
resigned his directorship. In accordance with the re-
quirements of Section 8 of Ihis Article, the Board of
Directors may. at its discretion, elect the same in-
dividual to fill the resultant vacancy if that director
otherwise fulfills the requirements of a director, as
long as this will not result in more than one director
from any one member and as long as he continues
in (he same sales volume category.
Section 8. TERMINATION OF DIRECTOR
UPON CERTAIN EVENTS. A director shall be
deemed to have automatically resigned his director-
ship upon: the resignation of the member which the
director represents; the withdrawal from, or cessa-
tion of the business of that member; or upon such
an alteration in the nature of that member's business
as would disqualify that member from being granted
membership.
Section 9. PROXIES. Directors who are un-
able to attend a Board of Directors Meeting may
give their proxy to any other Director. All proxies
must be in writing. For not more than one meeting
each year a director who is unable to attend a Board
of Directors meeting may appoint a substitute who is
a partner, officer, director, or employee of the same
member or another member in the same sales volume
category as the director who cannot attend the meet-
ing.
Section 10. VACANCIES. In case of any di-
rector vacancy through death, resignation, removal,
election to another director category or otherwise,
the remaining directors by a majority vote of the
Board shall fill the unexpired term with a person
from the vacant sales volume or regional category
who otherwise meets the qualifications of a Director.
The person filling such vacancy shall hold office until
the next annual meeting of the members at which time
the members shall elect a successor for the unexpired
term. If a director fills a portion of an unexpired term,
[hat period is not included in that director's term of
office for purposes of the limitation in Section 3 of
this Article.
Seciion 11. POWERS. The Board of Directors
shall have power to do any and all lawful things and
exercise any and all lawful powers to promote and
carry out the objects and purposes of this Corpora-
tion, as set forth herein and in the Articles of In-
corporation of this Corporation.
Section 12. REGULAR MEETINGS OF THE
BOARD OF DIRECTORS. Meetings of the Board
of Directors may be held either within or without the
District of Columbia. The annual meeting of the
Board of Directors shall be held immediately after
the annual meeting of the members. No notice of
such annual meeting of the directors shall be neces-
sary. A regular meeting of the Board of Directors
shall take place immediately after the conclusion or
adjournment of any meeting of the members. No no-
tice of such regular meeting shall be necessary. Regu-
lar meetings of '(he Board of Directors may be held
at such other times as shall be determined by the
Board of Directors.
Seciion 13. SPECIAL MEETINGS OF THE
BOARD OF DIRECTORS. Special meetings of the
Board of Directors may be called at any time by the
Chairman of the Board, the President, or upon the
-------
request of at leas! one-third of the members of the
Board of Directors,
Section 14. NOTICE OF SPECIAL MEET-
INGS. Except as otherwise expressly provided by
law or these By-Laws, notice of a special meeting
of the Board of Directors stating the time and place,
shall be given by mailing or telegraphing the notice
to each director at his residence or business address
on or before the fifth day before the date of the meet-
ing, or by delivering, telegraphing or telephoning the
notice to him personally at his residence or business
address not later than the second day before the day
of the meeting. In an exigency, the Chairman of the
Board, or the President may prescribe a shorter no-
tice period. Except as otherwise required by law or
these By-Laws, no notice or waiver of notice of a
special meeting of the Board need state the purpose
or purposes of that meeting, and any and all business
may be transacted at the meeting.
Section 15. QUORUM. A majority of the di-
rectors shall constitute a quorum for the transaction
of business at any meeting of the Board of Directors.
Whether or not a quorum is present at a meeting, the
directors present may adjourn and reconvene the
meeting. No notice need be given of the reconvened
meeting other than an announcement at the close of
the meeting that is adjourned. Except as otherwise
provided by law. the Articles of Incorporation, or
these By-Laws, when a quorum is present at any
meeting of the Board, a majority of the directors
present at such meeting shall decide any question
brought before the meeting, and the action of the
majority shall be the action of the Board.
Section 16. ORGANIZATION. Each meeting
of the Board of Directors shall be presided over by
the Chairman, the President, or in the absence of
both such officers by any director selected to preside
by vote of a majority of the directors present. The
Secretary or any person designated by the Chairman.
shall act as secretary of the meeting.
Section 17. COMMITTEES. The Board of Di-
rectors, by majority vote of the whole Board, may
appoint standing or special committees of the Board
of Directors, which have and exercise the authority
of the Board of Directors in the management of the
Corporation, to carry out the objects or purposes of
this Corporation, including, without limitation, the
following standing committees: Executive Commit-
tee, Audit Committee, and Finance Committee. Ex-
cept as otherwise provided by law, the Articles of
Incorporation, and these By-Laws, the Board of
Directors shall fix (he powers and prescribe the
duties of any such committees. Each committee of
the Board of Directors shall consist of two or more
of the directors. Each such committee may have the
power to authorire affixing the seal of the Corpora-
tion to all papers which require it. Such committee
or committees shall have name or names as may be
determined by Board resolutions. In the absence or
disqualification of a member of a committee other
than the Executive Committee, the remaining mem-
bers of the committee ma\ appoint another director
lo act at the meeting in the place of the absent or dis-
qualified member. The committees of the Board of
Directors shall keep regular minutes of their pro-
ceedings and report to the Board when required.
Section 18. NON-VOTING DIRECTOR-
SHIPS. Non-voting directorships may be established
by the Board of Directors. The number of director-
ships and the qualifications for such positions shall
be set by the Board.
Section 19. ACTIONS BY DIRECTORS
WITHOUT A MEETING. Any action required or
permitted to be taken at any meeting of the Board of
Directors or of any committee of the Board of Direc-
tors may be taken without a meeting, if all members
of the Board or of such committee consent in writing
and the writing is filed with the minutes of proceedings
of the Board or committee.
Section 20. MEETING BY CONFERENCE
TELEPHONE. Members of the Board of Directors
or of any committee of the Board may meet by means
of conference telephone or similar communications
equipment. Participation in a meeting in this manner
shall constitute presence in person at such meeting.
Section 21. REMOVALS. The members of the
Corporation at any meeting, by majority vote, may
remove from office, either with or without cause, any
director and elect his successor. The Board of Direc-
tors, by majority vote, may remove a director for
cause, and may remove any member of any com-
mittee with or without cause.
Section 22. SALARY. Directors, other than the
President, shall receive no salary or travel expenses
for their services, except as approved by the Board
of Directors or the Executive Committee.
Article VII
EXECUTIVE COMMITTEE
Section 1. STRUCTURE.
(a) The Executive Committee shall consist of
the Chairman of the Board, the four Vice Chairmen,
the President, plus eight other directors as follows:
one retailer or wholesaler member with sales of less
than $25 million; one retailer or wholesaler member
with sales of $25 million or more but less than $100
million; two retailer or wholesaler members with sales
of $100 million or more but less than $250 million;
and four retailer or wholesaler members with sales of
$250 million or more.
(b) The Chairman of the Board of Directors
shall serve as Chairman of the Executive Committee
and preside at its meetings. He shall have a vote only
-------
in case of a tie. In the absence of the Chairman, the
President shall preside, or in the absence of both
these officers, the Committee shall elect one of its
members to preside. The members of the Executive
Committee, olher than the Chairman, the President,
and the Vice Chairman shall be elected for a one-
year term by the Board of Directors, and may be re-
elected without limitation as long as they are mem-
bers of the Board of Directors. Replacements to the
Executive Committee shall be nominated by the Ex-
ecutive Committee and elected by the Board. The
immediate Past Chairman (in 1977 only, the im-
mediate Past Chairmen of NAFC and SMI) shall
be among the eight non-officer members of the Com-
mittee and shall fill the position for the sales category
of the member he represents. Substitutes are not per-
mitted at Executive Committee meetings.
(c) The Committee shall fix its own rules of
proceeding and meet as provided in these rules or in
resolutions of the Board of Directors. The Chairman
of the Board or the President may call a meeting of
the Executive Committee at any time. A majority of
the Executive Committee shall constitute a quorum.
Section 2. POWERS. The Executive Committee
shall have and may exercise, at all times when the
Board of Directors is not in session, all the powers
of the Board of Directors in the management of the
business and affairs of the Corporation, The Execu-
tive Committee shall not have the power or authority
io enter into an agreement of merger or consolidation;
to sell, lease or exchange all or substantially all of the
Corporation's property and assets; to terminate any
employment contracts; or to amend the By-laws of
the Corporation. All actions by the Executive Com-
mittee shall be reported to the Board of Directors
at the meeting of the Board next succeeding such
action.
Section 3. SALARY. Members of the Execu-
tive Committee shall receive no salary or travel ex-
penses for their services on the Committee, except as
approved by the Board of Directors.
Article VIII
OFFICERS
Section 1. ELECTION AND TENURE.
(a) The officers of this corporation who shall
be members of the Board of Direciors shall be: a
Chairman of the Board; a First Vice Chairman; a
Vice Chairman of Finance; two additional Vice
Chairmen, who between themselves shall be of equal
rank; and the President. All of such officers (with
the exception of the President) shall be elected at the
annual meeting of the members by a majority of the
votes casi for each officer. If no candidate shall re-
ceive a majority on the first vote, then all candidates
except the two leading candidates shall be eliminated
and the two leading candidates for that office shall
then be voted on again with the candidate then re-
ceiving a majority of the votes being elected. Voting
for the officers shall be by written ballot separately
for each office; but upon the consent of a majority
of the members present, written balloting may be
dispensed with and the voting may be by voice vote.
(b) Each officer (except as hereinafter speci-
fied in this section) shall be elected for a term of one
(1) year or until his successor is elected and quali-
fies, and may be re-elected once to the same office.
After a lapse of one year, a person may again be
ejected to the same office. On completion of his term
or terms, a Vice Chairman (including Vice Chair-
man of Finance) may be elected First Vice Chair-
man, and any Vice Chairman (including First Vice
Chairman and Vice Chairman of Finance) may be
elected Chairman.
(c) The Board of Directors shall appoint the
President and establish his tenure. The Executive
Committee or a Compensation Subcommittee of the
Executive Committee shall determine the compen-
sation for his services.
(d) If an officer resigns from a member, he
shall be deemed to have resigned his office. The
Board may, at its discretion, elect the same individ-
ual to fill the resulting vacancy, as long as this will
not provide more than one director from the same
member and as long as he meets other qualifications
for office.
(e) An officer shall be deemed to have auto-
matically resigned his office upon: the resignation
of the member which the officer represents; the with-
drawal from, or cessation of the business of that mem-
ber; or upon such an alteration in the nature of that
member's business as would disqualify that member
from being granted membership.
Section 2. VACANCIES. A vacancy in any
office may be filled for the remainder of the unex-
pired term by a majority vote of the Board of Di-
rectors.
Section 3. CHAIRMAN OF THE BOARD.
(a) The Chairman of the Board shall preside at
all meetings of the members of the Board of Direc-
tors and of the Executive Committee, He shall be a
member ex-officio of all regular arid special com-
mittees, except the Audit Committee. He shall nomi-
nate the members of all committees referred to in
Section 15, Article VI, subject to approval of the
Board of Directors. He may, without prior Board
approval, appoint other committees, comprised of
board members or others, which shall not have or
exercise the authority of the Board of Directors.
(b) The Chairman of the Board shall perform all
such other duties and have such other responsibilities
as the Board of Directors may determine. The Chair-
man shall also see thai all resolutions of the mem-
-------
bers and the Board of Directors are carried into ef-
fect. If the Vice Chairman of Finance resigns or is
otherwise unable to perform his functions, the Chair-
man shall appoint a successor to serve until the next
meeting of the Board of Directors. The first elected
Chairman shall not be the most recent Chairman of
SMI or NAFC. With the exception of the first Chair-
man, no person otherwise qualified will be ineligible
to become Chairman because of previous SMI or
NAFC positions.
(c) The Chairman is specifically authorized
to invite the chief elected member officers of other
national food distribution associations to attend
Board meetings in an ex officio capacity, without the
right to vote.
Section 4. VICE CHAIRMEN.
(a) The First Vice Chairman shall in the ab-
sence or disability of the Chairman of the Board per-
form the duties and exercise the powers of the Chair-
man and shall, if the Board of Directors so determines,
succeed the Chairman if the absence or disability be-
comes permanent. In the absence or disability of the
Chairman and the First Vice Chairman, any other
Vice Chairman designated by the Board of Directors
shall perform the duties and exercise the powers of
the Chairman of the Board.
(b) The Vice Chairman of Finance shall ad-
vise the Board of Directors in regard to financial
matters and present financial statements at meetings
of the Board of Directors and a full financial report
at the annual meeting of members.
(c) All Vice Chairmen, including the First
Vice Chairman and Vice Chairman of Finance, shall
perform such duties as may be assigned to them by
the Board of Directors or the Chairman of the Board.
Section 5. PRESIDENT.
(a) The President is the chief executive officer.
and shall administer and manage the affairs of the
Corporation. He is responsible for implementing
policies established by the Board and for member
relations. He shall ensure that the Corporation im-
plements a balanced program of member services
(research, education, conventions, etc.) and public
affairs activities (government relations, public in-
formation, consumer affairs, etc.). He shall be a mem-
ber ex-otficio of all regular and special committees,
except the Audit Committee.
(b) The President shall have power to employ,
supervise, and discharge the employees of the Corpo-
ration, purchase supplies and equipment, and arrange
for facilities for operating purposes, in accordance
with budgets approved by the Board of Directors.
The President shall report to the annual meeting of
members and to meetings of the Board of Directors
and of the Executive Committee. The President shall
perform such other duties as may be prescribed by
the Board of Directors or the Executive Committee.
Section 6. SECRETARY. The Secretary shall
be appointed by the Board of Directors. The Secre-
tary shall: keep a list of the names and addresses of
the members of the Corporation; attend all meetings
of the members, the Board of Directors and the Ex-
ecutive Committee; and keep a correct record of
meetings. The Secretary shall be custodian of the
corporate records and the corporate seal and shall
affix the corporate seal to all instruments requiring
it. The Secretary shall perform such other duties as
pertain to the office of Secretary and as directed by
the Chairman of the Board or President. In the ab-
sence of the Secretary, the Chairman of the Board
or the President shall appoint a substitute to perform
the duties of the Secretary.
Section 7. TREASURER. The Treasurer shall
be appointed by the Board of Directors. The Trea-
surer shall be responsible for: the care and custody
of all the funds of the Corporation; keeping full and
accurate accounts of all assets, liabilities, commit-
ments, receipts, disbursements, and other financial
transactions of the Corporation in books belonging
to the Corporation; ensuring that no contract, com-
mitment, obligation, agreement or expenditure of
any kind is made unless it complies with guidelines
and procedures set up by the Board of Directors;
preparation and filing tax returns; depositing funds
in the name of the Corporation in such banks or safe
deposit companies as the Board of Directors desig-
nate; making, signing, and endorsing in the name of
the Corporation, checks, drafts, notes, and other
orders for the payment of money under the direction
of the President, the Executive Committee, or the
Board of Directors; and he shall perform all duties
ordinarily incident to the office of Treasurer.
Section 8. AUDITOR. Regular audits of the
books and records of the corporation shall be made
by certified public accountants who shall be elected
annually by the members on recommendation of the
Board of Directors. The certified public accountants
shall be responsible to the Chairman of the Board,
but shall maintain direct contact with the President,
Vice Chairman of Finance, the Treasurer and the
Audit Committee to assist them in ensuring that
proper procedures are established in the administra-
tion of the financial affairs of the Corporation and
otherwise to assist them in the discharge of their
duties.
Section 9. VICE PRESIDENTS. The President
may appoint one or more Vice Presidents, subject to
confirmation by the Board of Directors.
Article IX
NOMINATING COMMITTEE
Section 1. MEMBERS. Candidates for office
and for the Board of Directors shall be nominated
-------
by a Nominating Committee of seven (7) commit-
teemen. The first Nominating Committee shall con-
sist of the Chairman of the Board and the three im-
mediaie Past Chairmen of SMI and NAFC. Subse-
quent Committees shall consist of the Chairman of
the Board as an ex officio member; the immediate
Past Chairman; two additional Past Chairmen, se-
lected by the Chairman of the Board from all Past
Chairmen; the First Vice Chairman; and two addi-
tional committeemen (who need not be directors)
selected by the Chairman of the Board. Until such
time as there are at least three Past Chairmen, the
Chairman of the Board shall complete the required
number of Past Chairmen from among the Past
Chairmen of NAFC and SMI, divided as equally as
possible.
Section 2. DUTIES. The Committee shall des-
ignate its own Chairman and adopt rules for its own
procedure. Before each annual member meeting the
Committee shall nominate candidates for each of-
fice and each directorship to be filled at the meeting.
It should seek to ensure that the list of candidates is
regionally balanced. The Committee may perform
its duties by consultation at meetings, or by letter,
telegram or telephone.
Section 3. CANDIDATE LISTS- The names of
candidates selected by the Committee shall be fiVd
in the principal office of the Corporation not less than
twenty (20) days before the date fixed for the elec-
tion of officers and directors. A list of the nomina-
tions shall accompany the notice of the annual meet-
ing sent to each of the members. Any twenty (20)
members may in writing nominate other candidates
for all or any of the officer or director positions. A
temporary office for the annual meeting shall be
established in the building or hotel where the meet-
ing is being held. A list of any nominations made by
members shall be filed at this office at least two (2)
days before the date fixed for the election of officers
and directors.
Section 4. FAILURE TO LIST CANDIDATES.
No person shall be elected whose name has not been
filed either in the list of the Nominating Committee
or in the list of member nominations. If the Com-
mittee fails to file its list of nominations, officers and
directors shall be nominated and elected by the mem-
bers at the annual meeting.
Article X
INDEMNIFICATION AND INSURANCE
Section 1. INDEMNIFICATION. The Corpo-
ration may, in the discretion of the Board of Direc-
tors, indemnify any individual, including officers or
directors, in accordance with the laws of the District
of Columbia.
Section 2. INSURANCE. The Corporation may
purchase and maintain insurance on behalf of any
person who is or was either a director, officer, em-
ployee or agent of the Corporation, or serving in such
capacity for another entity at the request of the Cor-
poration, against any liability asserted against him
and incurred by him in any such capacity or arising
out of such status, whether or not the Corporation
would have the power to indemnify an individual
under Section 1 of this Article.
Article XI
FISCAL YEAR
The fiscal year of the Corporation shall begin
on January 1st and end on December 31st of each
year.
Article XII
NOTICES
Section I. Any notice required by these By-
Laws may be given in writing by mail by depositing
the notice in a post office or letter box, in a postpaid
sealed envelope, addressed to the person to whom
notice is required at the address appearing on the
books of the Corporation or as specifically provided
in these By-laws. The notice shall be deemed given
at the time mailed.
Section 2. Any notice required to be given un-
der these By-Laws may be waived by a writing signed
by the person or persons entitled to notice at any time
before or after the date on which notice is required.
Article XIII
SEAL
The corporate seal shall have inscribed on
it the name of the Corporation, the year of its or-
ganization, and the words "Corporate Seal, Wash-
ington, D.C." Said seal may be used by causing it
or a facsimile to be affixed or reproduced in any man-
ner whatsoever.
Article XIV
AMENDMENTS
These By-Laws may be amended at any meet-
ing of the members at which a quorum is present by
two-thirds vote of the members present, provided
that notice of a proposed amendment is mailed at
least twenty (20) days before the date of such meet-
ing. These By-Laws may also be amended at any
meeting of the Board of Directors at which a quorum
is present by a vote of two-thirds of the directors
present, provided that notice of such proposed
amendment is mailed to each Director at least twenty
(20) days before the date of such meeting.
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FORCED DEPOSITS
A Better Way?
Retailers in Progressive Grocer's
survey voted overwhelmingly in favor
of abolishing or amending the forced
deposit laws in effect in their states.
Even those who are in sympathy with
the law often agree with one of the
most frequently voiced sentiments:
"There's got to be a better way." But
is there?
The state of Washington thinks so.
In the four years that its Model Litter
Control Act has operated, litter accu-
mulation in the state has dropped to
34,125 tons a year, compared to an
estimated annual rate of 100,000 tons
in 1971—a reduction of two-thirds.
Unlike other states whose statistics
zero in on highway litter. Washington
knows what all of its litter is com-
posed of and where it falls. The
figures shown in the accompanying
charts are based on litter counts made
by URS Company, a national research
firm which conducts on-going sam-
pling of six types of Washington high-
ways: measured residential, commer-
cial and industrial areas; and national,
ttate and local parks and recreational
areas.
In enacting the first-of-its-kind
Model Litter Control Act, Washington
State took cognizance of two basic
facts: beverage cans and bottles repre-
sent a minor pan of the littering prob-
lem and the general public is the litter
bug, not manufacturers or retailers.
Accordingly, the litter problem was
viewed as one of education dealing
with the total spectrum of litter.
Forced deposits, by
concentrating on
only 20% of the problem,
are an expensive,
ineffective answer to
the litter problem.
Industry itself—with active support
by the Washington State Food Dealers
Assn.—suggested that the burden of
paying for the program should be
borne equally by those whose prod-
ucts ended up as solid waste. And so
a special "litter tax" of .00015% on
gross sales—equivalent to SI50 per
year per $1 million—was levied
against thirteen manufacturing, whole-
saling, retailing and food service indus-
tries which contribute most to litter.
Groceries, tobacso products, news-
papers, magazines and paper products
are included, as well as soft drinks
and beer. The,result is that retail food
stores bear one-third of the S860.000
annual assessment instead of sharing
the returnables cost exclusively with
bottlers and beverage distributors. At
the same time they are free to operate
with as many or as few returnables as
their customers demand.
Litter Control Act funds arc used
strictly for anti-litter efforts with the
bulk spent for educational programs
designed to prevent litter through
greater environmental awareness.
Programs are conducted by the
Department of Ecology and include
grants to local governments, public
events, youth Utter patrols, citizen's
voluntary clean-up drives, media pro-
motions and even an elementary
school curriculum. Under the law, lit-
ter bags are required in every motor
vehicle and powered boat. These, as
well as posters and other aids, are
provided by the Dept. of Ecology free
of charge to participating individuals
and groups. A minimum fine of SlO
per littering offense is mandated, in-
tentionally made moderate to encour-
age strict enforcement.
In practical terms the benefits to
the retailer are enormous. A super
market doing $3 million would pay
only $450 tax and depending upon the
degree of returnables in his operations,
would save thousands compared to
the forced deposit system.
Which state Is cleaner?
While this is good for the retailer,
how does the approach compare in
results with Oregon's and Vermont's.
Statistics on effectiveness of anti-
litter efforts in the Oregon Bottle Bill
Report of 1977 concentrate on road-
side conditions. By 1973/1974, two
years after the bottle bill went into
effect, an Oregon Highway Division
survey showed beverage containers in
roadside litter had declined 83^ by
piece count.
On the surface this would seem to
•WIVE GROCER • OCTOBER 1977
63
-------
be wildly successful but when ooe
considers that beverage containers
comprise 20% of litter and only 49%
of litter falls on highways (see table)
the results are less spectacular.
In the report attention is not called
to the fact that total litter on high-
ways declined only 38% by piece
count—or 47% by cubic volume.
These results are discernible only if
the reader makes his own calculations.
No measurements are given for off-
highway locations. No survey has
been made since 1973/1974. The re-
port notes that there was no necessity
for one. "Roadside litter reduction
was the original goal of the law and
is the most obvious result," the Report
notes.
Highway litter data only
Vermont's Agency of Environmen-
tal Conservation, Division of Protec-
tion, reported, also in 1973/1974, that
a litter survey by the Vermont High-
way Department showed beverage
container litter on highways down
76% from pre-law days. Litter from
other sources declined 5% with total
Utter down 38%—by volume, not
piece.
For simplicity it might be best to
score the official decreases in all litter
in terms of cubic feet.
% Decrease in:
Last Highway Total
Measurement Litter Litter
Oregon 1973-1974 -47% N.A.
Vermont 1973- 1 974 -33 % N.A.
Washington 1976 N.A. -66%
N.A.— NOI A vails t>ls
The Washington statewide reduc-
tion in all kinds of litter exceeds that
of the other two states' highway litter
reduction. (For the record, Washing-
ton's 1975 total litter for highways,
county roads and city streets was
22,800 tons or 56% of total. In 1976
this declined to 16,503 tons, 49% of
total.)
Given the concentrated effort de-
voted to highway litter in Oregon and
Vermont, it is likely that their high-
way cleanliness has improved since
their last measurements. But given the
all-pervasive nature of litter, the
Washington approach, bottle bill op-
ponents say, is clearly the superior
solution.
Retailers who are familiar with
both methods, are inclined to add a
fervent, "Amen." p
64
PROGRESSIVE GROCER « OCTOBER
-------
! The Washington State Department ot Ecology has conducted on-going litter control activities since 1972, measuring all
types ot litter in 13 different kinds of locations. The make-up ot titter shown does not differ substantially trotn what it was
• -in 1971, but oi the 25% total for glass and metal, about 20% is made up of soft drink and beer containers, according
^fo Washington state officials. It is estimated that private and public cosis incurred in dealing with litter in the staie
^exceed $18 million annually, or about $5 per person per year.
The flow of returnables
usually starts out w-th
hands across the check-
stands (top photo, tar left)
and ends in the backroom
where bottles rise in
massive tiers, (center, far
left). Because of the
space squeeze, however,
backrooms sometimes
end up looking like battle
fields (bottom, fur lelt).
Even tops ot coolers are
used for storage (bottom
photo center). Open air
corrals (left) are another
answer lo the problem
but are not preferred be-
cause of pilferage and
weather conditions.
toCER . OCTOBEHOGRESS1VE GROCER * OCTOBER 1977
65
-------
What retailers say:
FOR:
of Forced Deposits
Four out of five of Oregon and Vermont retailers
are in favor of eliminating or modifying forced
deposit bills, compared to those whet favor them "as is"
or who would like them expanded to include
other kinds of containers.
Here in about the same proportion are comments
for and against forced deposits.
The biggest thing is at-
titude. I was for the bottle
bill and still am because our
highways are clean. I've (rav-
eled other states—even Ha-
waii—and they're a mess. So
I want to make the system
work in my store, and it
does, because I keep my. peo-
ple on top of the job."
Super Market Operator,
Vermont
-I believe the bottle bill is
a good idea; however, I feel
the smaller grocers are being
hurt by getting back far more
empties than they sell. I think
if It » container charge was
put in effect all stores would
be better off."
Supper Market Operator,
Oregon
"We have supported the
bottle law since its start. In
terms of conservation and
beauty of our state roads
and stream and lakes, it has
made Vermont a much bet-
ter place to live. Also, in
Vermont we are paid a 20%
handling charge and the bot-
tle law is a profit-making op-
eration in our location."
Super Market Manager,
Vermont
"At first there were a few
problems but they were
solved within the first two to
three months. It took the
general public a while to ad-
just to the deposit bill but
their acceptance now is quite
favorable since they see the
positive results that have
come about,"
Super Market Manager.
Oregon
"I do not feel forced de-
posits after the first six
months has any affect on
customers. They, the cus-
tomers, have gotten used to
the idei and want the items
so they are not bothered. It
affects retailers on beer bot-
tles because of the compan-
ies' reluctance to pick up
empties."
Super Market Manager,
Oregon
"I like the law very much.
I believe it has really helped
clean our beaches and road-
ways. It has reduced the
number of sizes of containers
of beer and soft drinks, re-
ducing somewhat the need of
space and inventory—and
that means saving money.
Give us a handling allowance
to defray the costs to us of
handling and sorting and it
is a very good program."
Super Market Operator.
Oregon
-------
AGAINST:
Those returnable* piling
v$ in the backroom are a
real pain. The meat man and
the produce man are con-
stantly on my back about my
hogging all the space in the
backroom. On delivery days
it'i especially bad."
Super Market Manager,
Vermont
"Returnable* in our store
arenVjust a regular pain,
they're a real boil on the
butt! At this moment I've got
35—count 'em—35 shopping
carts and bins tied up with
empties. We redeem twice as
many as we sell. Customers
kite, their deposit credit slips.
We're constantly mopping up
spills and cleaning up broken
glass. There's got to be a
better way!"
Super Market Manager,
Oregon
Toe containers are stored
outside in a fenced area. We
.have lost at least $1,000
worth of returnable* as a re-
mit of break-in because of
the insecurity.
"Returnable container de-
pots spotted throughout the
marketing area, we think,
would be a partial solution to
our problem. The operating
cost of these depots could be
guaranteed by the distribu-
tors and retailers. As a re-
tailer, I would prefer paying
my share of the handling
costs in this manner as com-
pared to our present method.
It would save us money, plus
much better customer service
at the store level."
Super Market Operator,
Oregon
"The authorities were hot
to put a deposit on wine bot-
tles—until it was pointed out
to them that the State, as the
sple purveyor of liquor, had
a unique opportunity to lead
the way by putting a deposit
on liquor bottles. Suddenly
the wine bottle deposits didn't
seem that important."
Super Market Manager,
Oregon
"Bottles and cans returned
are about 2% or 3 to 1 in
what we sell. Also, people try
their best to return non-
returnables from out-of-state.
A large loss is in this area."
Super Market Operator,
Oregon
(55 Miles from Washington)
"People buy their bever-
ages at taverns, smalt stores,
or at a store holding sales.
Then they bring them to the
stores thai give them the least
trouble. That's us. On Sun-
days or the first of the month
they fill iip all our carts and
we have no carts for custo-
mers. We have bought as
high as $600 back in one
week. This ties up a lot of
money."
Super Market Operator,
Oregon
"The approach is wrong.
Deposits should be made at
store level only and stores
should crush the bottles and
cans and recycle the remains.
Distributors could increase
prices slightly to cover cost
of new glass and cans."
Super Market Operator,
Oregon
"We discontinued several
items in national brands,
namely canned beer—not
handled at all. We don't get
the deals we used to get on
pop and beer, either. The
bottle law is a real pain in
the posterior.
"The slate of Oregon still
has one hell of a litter clean-
up crew picking up roadsides.
The whole damn program is
a farce."
Super Market Manager,
Oregon
"Empties were such a pain
we're glad to forfeit the
penny for each can or bottle
from the vendor by turning
over sorting and counting to
a local service. Now we have
fewer problems with break-
age and smell of stale beer.
We still have to stockpile our
private label bottles for every-
other-week pickup, though.
It's a good thing I'm blessed
with an oversized backroom."
Super Market Manager,
Vermont
"We have a small store
with only three checkstands,
so our system calls for cus-
tomers putting empties into
shopping carts at the front.
Very messy. What I don't
like is those customers with
large returns standing behind
the registers trying to get
special preference from the
checkers to get refunds. Also.
I'm across the border from
New Hampshire and I don't
sell half the beer I should!"
Super Market Manager,
Vermont
"We have increased cuts
of personnel from broken
bottles."
Super Market Operator,
Oregon
"People are still throwing
bottles and cans on the side
of the road even with the de-
posits. Kids bring dusty, dirty
-------
bottles by the cart load—$15
to $20 worth at a time."
Super Market Manager,
Vermont
"One of the costs of the
forced deposits that tends to
be overlooked is the amount
of money tied up in deposits
on inventory. We prepay our
deposit to the bottler or
brewer, of course; so w>*h
700 cases of beer and soft
drinks sitting on the shelves
we've got—figuring an aver-
age of seven cents deposit
per container—some 51,500
or so tied up at all times.
Super Market Manager.
Oregon
"Before the bottle bill our
checkers were handling per-
haps $3 or $4 in deposit re-
funds per shift whereas today
(hey may handle ten times
thai. The opportunities for
theft are obvious. That's one
reason electronic registers
help. They give each check-
er's refund amount and it's
an easy matter to see whose
percentage of refunds-to-
sales is out-of-line."
Super Market Owner,
Oregon
"My two biggest head-
aches are bottle and can re-
turnables and unit pricing
changes. I've got one man
who has appropriated a
twelve by twenty room just
for accepting bottles, issuing
credit slips, sorting and deal-
ing with vendors. My other
store people are only too
happy to tell customers to
*ee the man in the back of
ihe store'-"
Super Market Manager,
Vermont
"What evidence do I have
that forced deposits have af-
fected my business? The
amounts of canned beverage
purchased in the state of
Washington that is in my
customers' cars! They hate
forced deposits!"
Super Market Operator,
Oregon
(15 Miles from Washington)
"Out of state people—
tourists, bus tour people—
resent the deposit law—some
refuse to buy. They'll take
small juices instead. Local
shoppers are about 50-50 as
to approval or disapproval of
deposit law. Our town has no
industry, lots of wealthy fam-
ilies, many of whom are
ardent environmentalists."
Super Market Manager,
Vermont (12 Miles from
New Hampshire)
"While I'm for the bottle
bill. I'd say sanitation prob-
lems have increased. When I
recently heard my checker
scream I thought it was a
robbery. But it proved to be
a live mouse in one of the
pop bottles. Twice we've had
customers bring in soda bot-
les—unopened—with foreign
objects in them: a tooth
brush in one instance and a
matchbook cover in the
other."
Super Market Owner
Vermont
'*Our entire backroom is
taken up by bottles and sort-
ing. We are not able to carry
a back inventory on gro-
ceries."
Super Market Manager,
Oregon
"Customers from Wash-
ington (about 25% of our
business) will not buy Ore-
gon returnable cans. Custom-
ers in Oregon go to Washing-
ton to buy ten cases at a
time so they won't have to
make bottle returns. They
don't like to pay deposits on
containers or to store dirty
containers around their
homes. Customers testify to
these facts."
Super Market Operator,
Oregon
(II Miles from Washington!
"We dropped all canned
sodas as the result of the
forced deposits law but not
canned beer. You can't drop
canned beer. But we know
we're losing sales to New
Hampshire stores even though
we're 14 miles from the
border."
Super Market Manager,
Vermont
"When the bottle bill came
on most stores quit carrying
beer in cans. We all went to
standard bottles. Now the
trend is to more and more
sizes and kinds of bottles. We
now have four kinds of bot-
tles for one brand alone. But
what bothers me is the mess."
Super Market Manager.
Oregon
-------
Here, based on retailer experience in Oregon and
Vermont, is what it takes in money, manpower and
equipment to cope with returnables.
Also: an alternative that works.
The Impact of
Since 1970 an incredible 1,200
"bottle bills" have been introduced in
the 50 states and the U.S. Congress.
Like leaves littering the legislative
landscapes all except four have blown
away. But it seems certain in the next
few years more will come floating
down.
Indeed, a national law requiring de-
posits on beverage containers is con-
sidered a real possibility by environ-
mentalists—and a potential disaster by
super market operators, especially in
larger cities.
The objective of bottle bills is un-
deniably virtuous: to engender a
cleaner environment and to reduce ex-
penditures for materials and energy.
Proponents are unabashedly enthusi-
astic. The 1977 Report on Oregon's
Bottle Bill, issued by the Oregon De-
partment of Environmental Quality,
starts with Governor Robert W.
Straub's ringing assertion that, "We
in Oregon, are proud of the success of
the Bottle Bill, the first of its kind in
the nation." The summary boasts that,
"Oregonians support the Bottle Bill
with an enthusiasm usually reserved
for popular sports, motherhood "X
the flag."
Fighting a trio like that v v'j seem
callous at best and gf-.<(, and un-
patriotic in the extr~ .•'- Yet grocers
are crying "foul" '^r good reason.
Says an Albertson's manager, "IE we
caused the problem of littering I'd say
OK to a bottle bill. But here in Ore-
gon, we're expected to pay the bill for
the public's bad habits."
Reed Ray, Manager of Ray's Food
Fair, Nyssa, Ore., says, "I think legis-
lators have exaggerated the effect of
the bottle law, making the general
public feel that it's a great success.
It's only success is having grocers be-
come a garbage pick-up for the State."
George Lo Riparo, a Portland
Thriftway operator, fumes, "The 'do-
gooders' ought to have this miserable
mess in their every-day living at
home!"
"What bothers me," a super market
owner states, "is that legislating
against beer and soft drink containers
deals, at best, with onlv a minor part
of the litter problem. The major part
is ignored with this approach."
To get the views of the only grocers
who have actual experience with
forced deposits, and to provide infor-
mati'~,i for grocers in states where
c ..'-'.i laws are expected to be pro-
posed. Progressive Grocer editors
visited some 40 super markets in Ore-
gon and Vermont. In addition, f27
store owners and operators there an-
swered a detailed four-page question-
naire. Their comments are the basis
for most of the quotes and statistics
49
-------
reported below.
Extensive interviews were also held
with some 30 interested individuals,
including chain and wholesale head-
quarters executives, beverage buyers,
heads of container trade associations,
state envorinmentalists and health of-
ficers, operators of commercial sanita-
tion services, bottlers and beverage
distributors, editors of Washington
and Oregon newspapers and the lead-
en of state grocery associations.
The Oregon Bill—how it works
Oregon's bottle bill, passed in 1971,
became operative October 1, 1972
and affects specifically malt.beverages,
mineral water, soda water and car-
bonated drinks. All "beverage" con-
tainers must bear a minimum deposit,
clearly marked, which is paid to the
distributor by the dealer and to the
dealer by the customer. The minimum
deposit is 5?, except for "certified"
containers (those reusable by more
than one manufacturer) for which the
the minimum is 2c.
Dealers and distributors may not
refuse to refund the deposit on empty
containers of the kind, size and brand
which they sell. Pull-tabs are banned,
Somewhat whimsically, the law per-
mits establishment of redemption cen-
ters by any person in order to accept
returned containers. Unlike Vermont.
which has the wholesaler pass back
the equivalent of K per container to
the handler, there is no handling fee;
so there are no redemption centers.
Nor do the state's 300-odd recycling
centers pay refunds. The cost is borne
entirely by the retailer and distribu-
tor. (In Vermont there are only four
redemption centers. "Even the han-
dling fee can't compensate for the ex-
pense," says one bottler.)
How ft doesn't work
The Oregon bottle bill served as a
model for Vermont and the recently
passed, soon-to-become-effective laws
of Michigan and Maine. Some of the
quotes in the Oregon bottle bill report
are worth examining in the light of
what Progressive Grocer's investiga-
tions found.
Claim: Beverages sold in returnable
containers cost less, as they always
have, not only in Oregon but all
through the nation.
Our finding: Prices of soft drinks
and beer in bottle bill states are as
high or higher then neighboring states.
We've queried operators with stores
5 Major Problems with Returnabies
In interviewing super market owners and managers in Oregon
and Vermont, it quickly became apparent to Progressive Grocer editors
that five major problems were commonly experienced with forced
deposits. In our subsequent mail survey, we asked them to rank these
problems according to seriousness in their stores.
Respondents also wrote in their own choices for the top five.
Four problems received multiple mentions: bottle breakage, customer
complaints, interrupted checkstand operation, and theft, in that
order. Also reported were increased funds tied up, pre-empted.
shopping carts, insufficient container shells, checkstand errors, lower
profitability, work inten-uoted and reduced variety.
1. Extra labor for handling
2. Cluttered front of store
3. Insufficient backroom space
4. Sanitation
5. Decrease in beverage business
... And what do these
problems mean to the retailer?
1. Labor: A super market operator
can expect in the summer
months to spend $258 a week to
handle returnables and a smaller
store $169, not including fringes.
Half of stores have created a
new position: bottle boy or con-
tainer clerk.
2. Clutter: Three out of four stores
accept returnables at the front
end yet the median amount of
space provided there is only 32
sq. ft.
3. Backroom: A median of 250 sq.
ft. of backroom space is devoted
to returnables. One-quarter of
retailer respondents find it nec-
essary to augment this with 200
sq. ft. of space outside the store.
4. Sanitation: Clean up and pick up
is more intense and expensive
under forced deposit conditions.
Unwashed containers smell, par-
tially filled containers spill, bot-
tles break and some operators
find they have increased the fre-
quency of exterminator services.
5. Decreased Business: To reduce
handling expense most retailers
have cut back on the number
and variety of beverage items.
Cans and non-refillable bottles
especially have suffered and pri-
vate label has declined.
in both kinds of states, and bottlers,
too, and their answers are that Oregon
and Vermont prices, on balance, are
"about equal," "slightly higher,'1 or
"somewhat higher." No one said they
were lower,
Roger Palmer, Grocery Merchan-
diser for Albertson's, Portland, Ore.
Division, explains, "Overall I'd say
that tonnage of beverages has re-
turned to normal since the bottle bill.
What makes price comparison difficult
is that Oregon is currently under a
two-price approach: very hot ad spe-
cials offsetting what amount to higher
'everyday' prices."
Cost of handling is a factor that the
public pays in the form of higher
prices, says a Grand Union buyer of
beverages for stores in Vermont and
New York State. He explains, "The
1<* handling charge is already in the
cost of a six pack of soft drinks or
beer. What retails for 6 for Si.39 in
New York costs consumers 6 for
Si.49 in Vermont—and that is before
the customer puts up an additional
30c deposit."
If customers redeem 100% of their
deposits there is no loss to them. But
to retailers the deposits are a sales in-
hibitor. An Oregon super market op-
50
PROGRESSIVE GROCER • OCTOBER 1977
-------
Where do customers take
bottles and cans for refunds?
Checkstands
Bottle
Return
Station
Courtesy
Booth
Th» most popular spot tor
customers to return bottles
and cans is the checkstands,
but one out of lour stores
uses a bottle return station.
in 52% of these stores the
station Is located somewhere
•f the store front (usually
alongside the windows) but
In the remainder the station is
In the rear of the selling area.
Some stores use more than
one arrangement. For exam-
ple, it Is common practice in
evening hours to close the
bottle station and accept
bottles at$e checkstands.
Using the courtesy booth tor
returnables is rare, primarily
because of space considera-
tions.
'How are customers paid refunds?
Cash
Credit Slip
Off-Receipt
Method of refunding de-
posits Is a practical matter
primarily dictated by where
the customer returns con-
tainers but influenced also by
the number of persons in the
checkstand queue, the amount
of cans and bottles being re-
turned, time of day and other
considerations- Many oper-
ators use all three 'methods
of payment. Some like to pay
cash only, others prefer sub-
tracting deposits from the cus-
tomer's receipt at time of
ring-up. Credit slips have to
be carefully written and
signed because some cus-
tomers kite the figures.
entor says, "People are less likely to
purchase a case if they have to pay
an extra $1.20 for deposit." Vermont
retailers also complain that beverage
case sales have declined markedly.
Sales tax differentials are another
factor clouding the ^pifce issue. Ver-
mont shoppers cross, the border to
shop in New Hamp^hice and Wash-
ingtonians cross into Oregon in order
to save the tax. A Vermont retailer
explains, "I don't sell half the bev-
erages I should—first, because of the
. tax situation and second, people
would rather not have to put up with
returnables."
PROGRESSIVE GROCER • OCTOBER '977
Shoppers who prefer one-way con-
tainers frequently buy beverages
across borders no matter what the tax
situation (see quotes).
Claim: Sales have not fallen. They
have increased.
While some retailers insist that
their tonnage sales have returned to
pre-bottle bill days (following the
1974 recession, inflation and the sky-
high rise of sugcr prices) out survey
showed more retailers (71 %) report-
ing increases in soft drinks selling
prices than increases in dollar sales
(37%); the results were almost ex-
actly the same for beer.
In effect they are saying tonnage
increases didn't keep pace with price
and dollar sales increases.
Narrowed customer selection, the
nerd for customers to prepay deposits,
the inconvenience of returning emp-
ties and loss of business across state
lines (more so in Vermont than Ore-"
gon) are all sales depressants. Close
proximity to the border is not a req-
uisite. One retailer in Oregon 100
mites from California reports out-of-
staters refusing to buy beverages for
their travels because they wouldn't get
(heir refunds when they returned home.
51
-------
How much space is
devoted to returnables?
Here are median figures
for space given to returnables.
(Half of respondents had areas
larger than these and hall had
areas smaller.) Insufficient
backroom space was cited as
the third most serious problem
with returnables. One solution
—outside storage—was re-
sorted to by 38% of the super
markets in the group, gen-
erally in the form of fenced-in
corrals, covered and uncov-
ered, or used trailer truck
bodies. Basements and even
a separate building are other
responses to the space
squeeze. Because ot security
and supervision problems and
exposure to weather, outside
storage is an unpopular
solution.
BACKROOM
250
sq.ft.
UP FRONT
\ 32 sq JtT
% Stores
Using:
87%
91%
28%
Per cent of
containers returned
to a store
We asked retailers to esti-
mate the percent ot containers
sold in their own stores which
are returned for refunds (left
half of chart) and then what
'percent of all returnables they
thought originated in oiher
stores or outlets. The figures
suggest that super markets
(more than smaller stores} can
expect to redeem other out-
lets' containers. The reason,
say retailers, is that cus- -
tomers like to save up bottles,
no matter what the source, tor
a stop at the super market.
Figures here are averages but
median figures were quite
similar.
BOTTLES
77%
Returned
Returned
In own stores
28%
From other
stores or
outlets
Claim: The aluminum cart has not
disappeared nor has any container
been banned.
True, except for pull-top cans. It is
a consolation to retailers in that it of-
fers the opportunity to give customers
wider choice. But as cans have re-
turned to the scene, the problems of
sorting and storing empties have been
.compounded.
Competitive forces have caused re-
tailers to expand their offerings of
brands, flavors and sizes of bottles as
well.
And metric sizes promise to com-
plicate matters further. One- and two-
liter soft drink bottles have surfaced
and more are on the way.
Claim: Employment has increased
as a result of the bottle bill.
If retailing is any indication this is
certainly true. Half of the stores in
our survey have dedicated the services
of one employe—a bottle clerk—to
returnables. This position is a new
one.
Our study showed a typical super
market spending about $13,400 a year
for labor to handle returnables. If this
figure were projectibte (using only
half the amount since returnables ac-
counted for half of the business in
Oregon supers before the law) the de-
posit method is costing 436 Oregon
super market operators, who must
somehow pass along the additional
cost to the public, some $2.7 million a
year. This does not take into account
expenditures for added space or equip-
ment nor does it include the costs for
1,856 smaller stores or bottlers and
distributors.
Whatever the precise cost to the
public, it is enormous—and largely
PROGRESSIVE GROCER - OCTOBER 1977
-------
The labor cost of returnables
Six different classes of store personnel are usually involved In accepting,
handling, sorting and refunding tor returnables, at a weekly cost ol $258
In the summer months lor super markets and $169 tor smaller stores (less than
$1 million sates). It is quite likely that in winter time the figures
would decrease somewhat as beverage sales decline from summer highs,
However, since these costs do not reflect fringe benefits, pegged at perhaps
20% additional, the totals would seem to be a fair reflection of reality.
Total
Hours*
Average
Hourly Wage
Cost Per
Week-
Cost Per
Year"
Super Markets
($1 million
or more)
$3.74
$258
$13,416
Small Stores
(Less than 1
million) 50
$3.38
$169
$ 8,788
• Summer months
. •» Including fringe benefits
Who's involved ... and at what cost
Since customers most frequently return containers to the checkstands,
it /s nol surprising that checkers are involved in the returnable^ function
more often than any other group. Hours are another matter: the more tim
consuming counting and sorting tasks are assigned to lower-paid bottle
handlers and carryout boys. On average, super markets employ three
Summor months
% Stores Avg. Hours Average Cost Per
Using Per Week Hourly Wage Week
1. Checkers
16
$5.49
$87.84
2. Carryout boys 83
32
2.94
94.08
3. Assigned bottle
handlers
53
40
2.54
101.60
4. Manager/assistant
managers 43 _5 6.84 34.20
STClerks 31 ~12 5-82 69.84
6. Courtesy booth
personnel
34
3.95
134.30
invisible. The Oregon State Highway
Division in 1975/1976 spent $633,353
for roadway and right-of-way mainte-
nance and litter collection, including
the costs of the Oregon Youlh Litter
Patrol, which is funded through sale
of "vanity" license plates. Oregon
supermarkets are spending four times
that amount in added labor alone to
help solve the litter scourge. All food
stores are likely paying 10 times the
highway division's total.
. . Zeroing in on soft drink and beer
containers on highways raises two
questions: What about the other 80%
PROGRESSIVE GROCER - OCTOBER 1977
of litter? What about non-highway
conditions? Litter, as shown later, is
an all pervasive problem entailing a
multiplicity of waste materials.
Claim: Distributors and dealers are
managing the flow of returned con-
tainers efficiently, sorting and han-
dling them with no adverse effect on
health and safety standards in stores
or other outlets.
Our survey showed returnables to
be a burden to retailers in terms of
added labor, clutter at the front end,
insufficient space for sorting and stor-
ing and so on.
Among specific complaints of re-
tailers is increased breakage, cuts to
employes, smelly containers, spillage
and necessity for more frequent in-
sect sprayings.
Claim: Oregon retailers and dis-
tributors have cooperated and sup-
ported this new law from the start,
making the transition smooth. Retail-
ers continue to handle the returns
themselves rather than requesting the
creation of redemption centers as pro-
vided.
As detailed later, 30% of super
market operators surveyed were for
abolishing their states' bottle bills, an-
other 57% would modify them. One
of the most frequently offered sugges-
tions is establishment of stale, bottler
or wholesaler operated redemption
centers.
'Claim: tn Oregon, returnable soft
drink bottles are reused about 24
limes and beer bottles about 20 times.
At this rate, the returnable bottle sys-
tem uses one-third the energy con-
sumed in the throw-away system.
National Soft Drink Association
agrees that 15 years ago average trip-
page for beverage bottles was 24 to 34
trips but savs now the range is 10 to
12 trips, adding that in some urban
areas it is more like 3 to 6 trips. "City
people, especially apartment dwellers.
don't have the room to store empties.
And they don't want the bugs that ac-
company empties, either," says one
spokesman.
In theory, says one canner source,
a complete national conversion to re-
turnables would reduce the energy
requirements to produce beverage
containers minimally: to .0019 of the
national energy total—a reduction of
.0029 from 1970's total of .0048.
Proponents of returnables say that
energy costs are also saved on the
amount of garbage that must be
hauled away but a conversation with
William Bree, Program Executive,
Solid Waste Management Division of
the Department of Environmental
Quality for Oregon, drew the admis-
sion that not all trade-offs have been
considered. Among the oversights: the
need for super markets to build, heat
and light added space in order to ac-
commodate returnables.
Ken Medendorp, Director of Store
Development for Spartan Stores in
Michigan, says his cooperative is de-
signing 800 sq. ft. additional into new
53
-------
Effect of returnables on beverage business
Asked, "How has the returnables taw affected your business?", retailer responses showed a tefrly deer-cut r——» Soft
pettem: e moderate number with increases in bottled items carried and a strong majority with decreases \ J Drinks
in number of canned items. More than seven out of 10 reported higher selling prices out only about halt as
many saw dollar sales up. While just a handful reported lower selling prices, a clear majority reported I I Beer
doller profits down. This unfavorable pattern is significant because the combined volume of beer end soft . L -. j
drinks make beverages the single most important source of safes among non-perishables.
% INCREASED '
NO CHANGE
% DECREASED^
41
28
69
73
71
70
47
43
54
30
55
Effect on private label
Private label Hem* declined under forced deposit bills and with them, customer choice. Jyptcally, before passage of
their state's bottle taws, almost three In lour retailers in our survey carried private label soft drinks, and one in
three peer. Afterwards, the number of private label Hems declined, sometimes to zero. Only one retailer reported an
Increase in number ot private label beverages. How has the returnables law affected your number ol private for controlled)
label Items? Never
No. of Private Label Hems Increased Decreased No Change Discontinued Carried
Soft drinks
Beers
—
1%
18%
13
24%
17
30%
4
28%
65
Why the Fuss?
Retailer concern with soft drinks
and beer is well founded. As a com-
bination they represent the single
most powerful "category" among
super market non-perishables.
From 1960 to 1975 per capita
consumption of beer by the 18-and-
over population grew by one-third;
In the same 15-year span soft drink
consumption grew almost 125%.
The end result was a gain of 64%
for the period, which catapulted
their combined volume into the
area of 5.4% of total store sales,
with share of gross profit dollars
only a fraction behind that. (In con-
venience stores the two are roughly
four times as productive in sales
and profits.)
While beverage consumption was
growing, packaging was changing
radically. In 1950, soft drinks in
one-way glass and metal containers
were virtually non-existent. But by
1975 they had captured 63% of the
business. Soft drink returnables
plummeted to 37%.
Meanwhile, in the beer market
one-way containers had carved out
an 84% share of the market, up
from 28% in 1970. Given freedom
Given freedom of choice, the
consumer has demonstrated an
overwhelming preference for the
convenience and cleanliness inher-
ent in the one-way container.
Interestingly, the very term used
to describe a beverage container
can be an indicator of where a per-
son stands on the bottle bill ques-
tion. To a marketer, non-return-
ables are "one-way" containers.
convenient, clean and in tune with
today's realities and lifestyles. To
an environmentalist a non-return-
able is a "throw-away"—a litter
prone, energy wasting manifesta-
tion of the American public's pro-
clivity for waste.
54
PROGRESSIVE GROCER . OCTOBER 1977
-------
What changes would
you like to see
in your state's
present
returnables
law?
Super Markets
$1 million or more sales)
Threw
out of ten
super mar
tot operators
would like
forced deposits
entirely
and almost twice
as many would
like to nee the laws
modified. The most
frequently mentioned
modifications are tor
a bottle handling allowance
(Oregon operators only,
'since Vermonters get one); state,
wholesaler or private collec-
tion centers; fewer but more uni-
form laws. Analysis of all those
In favor of the forced deposit
concept shows they tend to be
•mailer store operators; and two out of
three are located in towns of less
than 10,000 population.
What extra investments have been made
to handle returnables?
Her*, ranked in order of frequency, are eight readily identifiable extra
costs, some one-time, others ongoing, which retailers say they incurred as a
result of forced deposits. The highest reported expenditures were $78,000
construction tor Interior additions and $16.000 tor an attached outside
bottle shed. Several retailers bought used trailer trucks tor about $2,000 each
and dropped them at the rear of the store for use as bottle sheds.
Uncovered fenced-in corrals have 'proved susceptible to theft ol returnables.
One Vermont retailer gives up £6,000 in yearly handling charges to have
an outsider perform sorting and storing functions.
% of Retailers Who
Made Investment
1. Special wheeled bins
2. Printed refund pads
64%
~58~~
Average
Cost
$ 356
15/mo.
3. Extra shopping carts
"56"
613
4. Construct new storage
space: Outside store
54
$75-$ 18.000 range
5. Construct new storage
space: Inside store
41
$150-$16,000 range
6. Additional sanitation
service
37
13/Mo.
7. Storage racks/shelves
34
230
8. Outside pickup service
super markets in the Si00,000 weekly
class. "And that may not be enough,"
he insists. "Furthermore, 1 estimate
that 90% out of 460 stores in our co-
op are physically underequipped to
handle returnables. Especially city
stores.**
Also unclear are the added fuel
costs associated with returning con*
taintrs to bottlers and wholesalers and
the' loss of backhaul space to chains
which must transport their own pri-
vate label empties.
Alec Murch of Coca Cola Bot-
tling, Claremont, N.H., says, "My
trucks to Vermont go out 40% empty
compared to New Hampshire. It's
costing me $200,000 a year to run my
trucks now where it used to cost $80,-
000. Inflation is only part of the cost.
I've had to install an expensive bot-
tle cleaning plant which has added
tremendously to our fuel bills. We
need more inside storage, now, too.
I'm convinced that energy savings are
vastly overrated."
States are atypical
Oregon and Vermont, say anti-de-
posit spokesmen, should not be used
as a model for any state's bottle laws.
Oregon represents only V4 of \%
or so of soft drink consumption and
1% of beer. The state has long been
a "returnable" one, with more than
half of its beverages already sold in
refiflables. Thus, the disruptions have
been considerably less than would be
experienced by retailers with higher
percentages of one-way containers.
Oregon's population is 2.3 million.
with 24 persons per square mile. The
only large city is Portland, population
380,000.
Vermont is even more rural and
tourist-oriented than Oregon, Popula-
tion is only 480,000 and it has a pop-
ulation density of 49. (Some high
density states: New Jersey-935, New
York-365, Ohio-250, Massachusetts-
702, Pennsylvania-261, Michigan-
156).
On balance, the argument goes) the
forced deposit approach reduces con-
sumer choice, causes expensive disrup-
tions for retailers and wholesalers, and
represents a heavy cost to the con-
sumer in the long run. }
As a litter-solving solution it is in-
complete, addressing only part of the
symptoms of the problem while ignor-
ing the root causes. As an energy
saver its effects are doubtful. Q
Robert E. O'Neill
lOORESSIVE GROCER • OCTOBER 1*77
55
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FOOD MARKETING INSTITUTE - A FACT SHEET
Background
The Food Marketing Institute (FMI) began operation on
January 3, 1977 as the result of merger between the two
major trade groups representing food wholesalers and
retailers — the National Association of Food Chains (NAFC)
and the Super Market Institute (SMI). FMI membership
includes some 950 companies doing business throughout the
United States, Canada and 30 foreign countries.
Merger of the two former trade associations followed
an intensive two year study and comprehensive planning by
a Joint Advisory Board (JAB) representing NAFC and SMI
and by all members of both associations. Both NAFC and
SMI were founded during the 1930's to provide a range of
services to the food distribution industry. Historically,
NAFC had concentrated on government and public relations
activities, while SMI had focused on research and education
services.
Recognizing increasingly common concerns of both
retailers and wholesalers of all types — from corner
store to largest supermarket company — industry leaders
sought a means to pool and strengthen industry resources.
This mission resulted in the historic merger of
NAFC and SMI into FMI, a new organization providing a.
(more)
-------
-2-
unified, well rounded program of services to business
and to the public.
Objectives and Functions
FMI's program is designed to improve industry
operational performance and to provide a strong industry
voice in public policy issues which have impact on the
food marketplace.
A broad FMI information gathering, analysis and
dissemination effort, dependent on active member cooperation
and participation, functions in three general areas:
1. Research
2. Education
3. Public Affairs
Research aims are to build and maintain a comprehensive
data bank to provide members, industry, government and the
public well documented and thoroughly reliable information
about the industry. Major emphasis is placed on new
technology , improving management practices, and total
systems analysis. The Research Division publishes a number
of widely respected regular research studies, including
Operations Review, The Super Market Industry Speaks,
Facts About New Super Markets, and Annual Financial
Review. It also issues special research reports on new
(more)
-------
-3-
developments like electronic funds transfer systems,
energy management and inventory controls.
Education programs include conferences, seminars
and training materials designed to teach new skills and
to improve efficiency at all levels of management. FMI
training and education are also shaped to build employee
morale and instill an awareness of the social and economic
enviornment in which the industry operates. Programs include
more than 40 conferences and seminars each year covering a
wide range of special subjects, from store security systems
to personnel motivation. The Education Division also publishes
guidebooks on issues such as affirmative action planning, and
produces training aids like the recent film "The Endless
Harvest."
The FMI public information program strives to
provide a reliable source of documented, objective information
about industry performance and member views on public policy
issues to media, government and other publics. Another
key program objective is to assist member companies develop
effective community and state level public information
programs. Included in the information program is an annual
series of press briefings for major media throughout
the country.
Government relations efforts focus on accurate
representation of the views of industry customers to
(more)
-------
-4-
government on public policy and legislative matters and
development of systems to help members represent consumer
interests effectively to local and state government.
Cooperation with government, customers and related industry
groups to promote grocery industry positions in the public
interest is a major element in FMI government relations
planning.
Particular emphasis throughout the entire FMI
operation is given to liaison and cooperation with consumers.
the agricultural community and state or regional groups.
Regular liaison with consumer interest groups and
the agriculture establishment serves to create an under-
standing of the distributor's role and to identify concerns
of common interest among retailers, consumer activists
and producers. Cooperative action in the public interest
on regulatory and legislative matters is a high FMI
program priority in both consumer and agriculture relations
work . An important consumer affairs activity is coordination
of a membership committee of consumer relations professionals
and continued development of member consumer relations
programs to serve retail customers.
Leadership
Policy is set by a 58-meraber FMI Board of Directors
selected to represent the food marketing industry by sales
(more)
-------
-5-
volume and geographical location with equitable representation
of small, medium and large companies assured by FMI By-Laws.
Jack J. Crocker, President, Super Valu Stores, Hopkins,
Minnesota serves as FMI Chairman. Donald 0. Schnuck,
President, Schnuck Markets, Inc., Bridgeton, Missouri,
serves as First Vice Chairman.
Other officers are Vice Chairmen: James L. Moody,
Hannaford Brothers Company, Portland, Maine; Edward J.
Schnuck, Schnuck Markets, Inc., Bridgeton, Missouri; and,
Bert L. Thomas, Winn-Dixie Stores, Inc., Jacksonville,
Florida.
Robert O. Aders, first President of the Institute,
is the only full time executive staff person to hold a
seat on the Board. Mr. Aders is a former Chairman of the
Board of Kroger Company and has served in the past on
both SMI and NAFC Boards.
Institute Offices
FMI will maintain two, fully staffed offices, one in
Chicago and one in Washington, D.C.:
Chicago Office: 303 East Ohio Street
Chicago, Illinois 60611
(312) 467-7150
Washington Office: 1750 K Street, N.W.
Suite 700
Washington, D.C. 20006
(202) 452-8444
(more)
-------
NATIONAL BEVERAGE DEPOSIT LEGISLATION
A REPORT to the
Resource Conservation Committee
Mr. Chairman, members of the Committee, my name is David E. Ortman, a
Research Associate with Friends of the Earth. Friends of the Earth is a
national environmental organization with 25,000 members and sister organizations
in thirteen foreign nations. Before corning to Friends of the Earth in Washing-
ton, D.C. this summer, I worked for two years in the Northwest FOE office
1M Seattle, WA. I appreciate the invitation to provide input to the Resource
Conservation Committee as you reach a position on beverage container deposit
leg i slat ion.
Let the record show that Friends of the Earth supports returnable beverage
container legislation at the National level.
We are tired of litter, James Kilpatrick v.'rote in the WA Star, two years
ago (23 Sept. 1975):
"Speaking simply as one citizen who is fed up with litter. . .The can
and bottle manufaturers ore fine folks, but their non-returnable
containers constitute an ugliness no civilized community should have
to tolerate. . . The most high-flown theories get shot down by human
nature. God made tidy people, but God also made trashy people also,
and the trashy people have ttie tidy people outnumbered. No anti-litter
laws ever devised will deter the swinish multitudes from hurling
their -empty six packs all over the country side, but the experience
of Oregon with its law on non-returnables indicates that the economic
pressure of a mandatory deposit will lessen the evil.11
We agree.
V/e are tired of no-deposit, no-return. According to the ChrJsitan
Science Honi tor (l April 1976):
"Every American produces about six pounds of trash and garbage a day.
-------
One way to help cut down on this exorbitant waste is to reuse the
millions of beverage conatiners 'consumed' along with the contents."
We agree. .Returnable beverage containers by way of deposit would prevent
millions of tons of solid waste from becoming solid waste in the first place
and at the same time save millions of tons of basic resourced (glass, steel,
alumi num).
We are tired of billion dollar thousand mega-watt nuclear plants required
to support an energy infrastructure that contributes to such energy waste
by a non-returnable beverage society. According to the testimony of the U.S.
Environmental Protection Agency, during hearings on Senator Hatfield's
returnable beverage container bill before the Senate Commerce Committee in
May 1975» the manufacture of one-way bottles and cans wastes the equivalent
of the energy needs for 1 year of all residents of New York and Chicago. Put
another way, it would be enough energy to meet the combined yearly requirements
of 185 million people living in Asia, Africa and Central America,
Furthermore, we are tired of deception by the bottling and beverage industry.
Their attempts to draw public attention away from -the materials and energy
wasteful ness of throwaway conta iners become, upon exami nat i on, as transparent
as the glass bottle which lies forever on the forest floor. "Resource recovery",
they say, "all or nothing". How may 1 ask do we do the inconceivable, that is
complete and total resource recovery, if we can not do the conceivable? Well,
we are asking the Resource Conservation Committee to support and endorse a
national deposit law--to do the conceivable.
Let the record show that we support the testimony of Environmental Action
which has responded in depth to the questions contained in the meeting
-------
-3-
announcement. Today I would 1 ike, however, to focus in on question k.:
What are the social aspects and consequences of beverage container
legislation? What sectors of society will be affected? Can you '
identify specific impacts of experiences pertai ni ng to beverage
conta i ner 1egi slation?
Let's look at South Dakota, a state which illustrates the need for national
beverage conatiner deposit legislation. For two years (71~72) while attending
high school and Jr. College in southeastern S. Dak., I he)ped set up a recycli ng
center in our small town of Freeman, population approximately 1^00. Utilizing
student labor, a donated building and a borrowed truck we recycled glass,
aluminum, tin cans and paper. The glass, most of the brown glass consisting
fo beer bottles and the green glass of pop bottles, was trucked to a glass
recycling center south of Minneapolis over five hours away.
I discovered later while attending college in Kansas that Ks. relatives of
people in this South Dakota community, having no place to recycle their own
material, would haul it along on visits to Freeman, ^00 miles to be left off
at our recycling c'enter which was then trucked another 300 and some miles,
making a one way trip of over 750 miles. That-is really a one-way bottle!
in 197^ the South Dakota State Legislature passed a "bottle bill" similar to
Oregon's to go into effect in July of 1976. Before that date, however, the
legislation was gutted to provide for elther returnable or recyclable containers
and a postponement of enactment to 1978. This means that South Dakota has
rejoi ned the no-depos i t, no-return states, since all conta5 ners are recyclable,
even if you have to truck them hundreds of miles out of state. These are the
social aspects, impacts and consequences of a weak type of beverage container
leg!slation.
-------
Fortunately, Oregon and Vermont provide us with strong models of beverage
contanier legislation. Having lived in the State of Washington for two years
with its "model" Litter Control Act, I can say that the sooner Washington
abandons this approach and adopts legislation similar to Oregon's Returnable
Container Bill, the better.
How do these two states, with such dissimilar approachs stand up? In terms
of litter reduction, Oregon wins hands down. The Oregon Journal which took a
survey of Washington and Oregon highways reported (25 October 1976) last year
that almost eight times more bottle and can litter was ret.rived in Washington
then in Oregon. Results of their survey are attached. In depth analysis of
Oregon's bill has been done and this information was inserted into the
Congressional Record of 18 January- 1977 by Senator Hatfield.
A national container deposit bill would save resources, reduce litter,
save energy, save the consumer money and create jobs. If it merely did one
of these things, it would be well worth supporting.
Friends of the Earth strongly supports Federal legislation for beverage
container deposits. We do not need more research, we do not need more hearings,
we need action.
Thank you for allowing these comments.
-------
D a .
„,„•,_.,„,„
1* llial jiCilpl
OOO Portland, Oregon
Monday, October 25, 1976
0,(;™
lfe:Wcys
Oft V6,
«'E"»
i rftllo.lk
0-1 (W.
I'l* l?i.
?r,,li!t'.!l
». 16.
4 mi!..', Mil
.1 (TOM
0:< WE.
ft, ]»,
,(U;.vlx.9
0:1 1H
llboitUlk
4 tn:l-?l isulk
cf Doj!«n
Oit 6,
4nJ«w»>
lOKU
AVl«*G!S
Avgfely
Ci's
3,200
915
9,300
2,650 '
3,800
6,50D
1,200
3,400
1,050 •
2,500
34,515
3,452
CMWms
27
13
n
85
48
• 34
23
97
17
30
385
38,5
65-74
100
78-103
365-1-
86
111
66
74
78-108
65-74
—
—
t
D^i since
Ufr
r
156*
217*
'217*
217*
unde-
termined-.
Onds-
.term! nod
139*
73-80
217*
217*
—
1
Containers
343
339
306
591
423
232
149
144
253
155
2,935
293.5
Avg daily
• cars
3,275
980
5,000
2,300
3,900
6,300 .
1,300
3,000
990
1,300
28,345
2,835
Woiliinglen
.HisU.-i.yi
\fak.H-
4o!tl«'lil
el Suvenl),
Woik UO.
E miltl ntlk
.{WtAi.pl
Wcit/SM,
Wiik-KJ
US. 1C1,
I !.*!«:•*
.!«>q«ta
US 101.
Jmlslll.-*
W«*.U3.
• ol WinU
W.A.6,
Sml'ctr.ti!
•ICktkt'.,
Vfclk.41...
UnsktlMh
et Ungvitw
.Wnk W,
In'ln'int
BlCcitlt iatt
*titimoieionly.
The VVoi'iinglon Hig!»woy Deportment jaid cr
•ocofdi of the exact niilipoili ocluoHj't'cci'
worked portior.s of thcie tiighwoyi cit the opprofim
p by loof polroli.
-------
OREGON BOTTLE BILL TRUTH SQUAD LITTER PICK UP SURVEY
PURPOSE; To determine the effectiveness of the Oregon Bottle
Bill as compared to Washington's model litter law in control-
ling roadside beverage container litter.
METHOD USED: Five one mile sites were selected in Oregon and
five matched one mile sites were selected in Washington for
a roadside litter pickup. Average daily travel rates were
determined from the Oregon State Highway Traffic Volume Tables
for 1976 and the annual traffic report for 1975 for the
Washington State Highway Commission, Department of Highways.
Types of roads and type of usage were also matched. Mile
posts, for the beginning and end of each survey pickup were
selected in advance of arrival at the site. Litter pickup
personnel walked approximately 4 feet from the edge of the
highway and left that position only to pick up carbonated
soft drink or beer cans or bottles which were visible from
that position. If additional cans or bottles were seen
during the time the pickup personnel were retrieving a
beverage container, any such containers were also picked
up and included in the tally. When ever a broken bottle was
present, only the top of the bottle was collected.
All items which were picked up were bagged and brought to a
central area for counting.
After the counting had been completed, the beverage containers
were placed in a wire mesh cage measuring two feet square with
the containers segregated by state for photographs.
TIME OF STUDY: Samples were taken starting on October 9th,
1976 and ended on October 17th, 1976.
RESULTS: Washington beverage container litter totaled
1,570 while Oregon totaled 180, a ratio of 8.7 to one. There
were forty-six cans found in Oregon and 1,225 cans in Washington.
Of the forty-six Oregon cans, only 11 carried the 5$ deposit
marking which is required of all beverage container cans
sold in Oregon since the Oregon Bottle Bill went into effect
October 1, 1972. Therefore, 76% of all cans were either
purchased outside of Oregon or were purchased in Oregon prior
to the bottle bill.
In making comparisions on a volume metric basis, the Washington
beverage container litter pile was approximately 9 feet high
while the Oregon total was approximately 9 inches high when
placed in the two foot square wire mesh cages. This then
produces a result of 36 cubic feet for Washington and 3 cubic
feet for Oregon for a ratio of 12 to 1.
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Page 2
DISCUSSION: Fiscal year 1976 pick up costs in Oregon totaled
5633,353 with a population of 2,200,000 for a per capita
cost for litter pick up of 28C. The state of Washington
expended $599,106 for highway commission litter pick up
for the fiscal year 1976 and $724,438 for the model litter
law for the same period for a total of $1,323,544.
Washington's popluation is approximately 3,700,000 which
brings a per capita litter control cost of 36*.
No effort was made to determine exact times of most recent
pick up. Records of exact pick up times on specific highway
sections are not available from Washington. Further, the
goal was to determine the system efficency of the mandatory
refund system plus litter pick up in Oregon as compared to
the Washington system which has no mandatory refund and uses
relatively more of its litter control expenditures for
education and support of volunteer pick up activities.
CONCLUSION: The five miles sampled in Oregon ranged from
a low of 14 to a high of 70 beverage containers per mile.
The railes sampled in Washington ranged from 225 to 486
containers per mile. Since every Oregon section was signifi-
cantly lower than all of the Washington sections it can
therefore be concluded that there is indeed a difference
between Oregon and Washington in roadside beverage container
litter. Based upon the samples taken the Oregon method
appears to have a clear advantage.
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Bet ay Glassnan
5501 acioto aa.
Bethesda, tM. ?0016
! an a native of Washington, D. C. " recently returned froa Oregon where I
lived for 3 '2 years, and where I wit. >esed and participated In the workings
of the Oregon Bottle Bill. The containers returned for deposit under this law
include glass bottles and aluainua cans for beer and soft driike. Pull-tab
cans are banned under the law. The system in Oregon is the sane that was used
nationwide when I was a child: A consumer buying such beverages pays a deposit
for each container at the grocery store; the deposit is returned when the con-
tainer is returned. The deposit is an excellent incentive for consumers to
return bottles and cans. Even a person unaware or unconcerned about aound envi-
ronmental practices i_s aware of his own economics. Most people in Oregon do
return their containers. An Oregon State University study showed that in the
first two years after **•£$&}'&$#,#*•£&*•*' ™&&l£r™ Uttw
was reduced 8?£. But one/ really does not needTa statisticjTroadside and trail
litter is astoundingly less in these states. The visual impact of this litter
uponaeaving a state operating under a bottle bill is overpowering. In a roadside
t
study by the Oregon Environmental Council 37 cans and bottles littered Oregon
per mile as opposed to 357 obuiajjiers per mile in Washington state.
In an age of resource, ener^ and job shortages there can be no reason why
we cannot nake the first step toward a recycling economy nationwide to replace
the throvawgy economy we now live in. Studies in Oregon show that while there
was a shift in roploymr-nt from soae segments to others, there was a net gain in
jobs and labor Income as a result of the bottle bill. Annual energy savings
equal 1.4 BTU's, enough to provide for the annual heating' needs of 50,000
Oregonians. A felass beverage container used 10 times consumes less than /3
the energy needed to nake 10 non-returnable bottles. Recycled aluminum cans •
save 7o;'i of the energy required to make cans from raw -gateriala. (These facts
gleaned froa the Portland Recycling lean's Sducation Ci'nter).
A national Bottle bill vill help reverse our throwaway living It will be a
such-needed start to a recyclng economy. »ut why stop at recycling only »oft-
drink and beer containers? Why not eventually include !»ll_£lass and aluminun
containers under a deposit law? In Oregon, discussion is now under way to
include wine bottles for deposit. It is ny hope that eventually we will re-
cycle underlaw every material we can possibly recycle. And if a aaterial is
diffiqkult or impossible to recycle, we should re-exanine its worth as pac-
kaging, or as a product.
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The following is a personal story about waste in our country:
1 am a photographer. In Oregon, I vent to a looal hardware store to see
it I could pick-up the extra cardboard boxes which cane in there. I wanted
to cut these up and use the cardboard Csr backing for ay frames. The store's
manager vas aost agreeable to ay request, for in fact, he said, "We have BO
•any boxes we have to burn a large number of then every week. " These boxes
were extremely strong, for in then was shipped heavy irrigation equipment.
One box I got at this store has seen over 2 years of service with me, making
numerous trips to crafts fairs and more recently making the trip cross-coun-
try from Oregon in a moving van. The box is stillinexcellent condition.
Here again we see an example of our throwaway economy. Those boxes burned
after one-tine use are trees, home of a multitude of wild animals and birds,
and caretakers of soil, watersheds and even the human spirit. Shall we continue
to use a product once, when it can be used a hundred times? Shall we continue
to rape our land for resources when we have otfr resources here already, to
be used again and again?
What can the concerned individual or household do to recycle containers
and other materials in a state where there is no bottle bill? First, place
3 or 4 trash cans, bags or boxes on the kitchen flooe instead of one. One
container is for metal, another for glass, one for paper, another for plastics.
lust be clean before they are dropped into the proper recep-
tacle. When the bags or boxes are filled, store them until you have a carload
to take to your local recycling center. But here you will no doubt run into
a problem: There are not^enqugh recycling centers. The stunning fact is
that in D.C. there are HO Tenters. This fact is very interesting considering
that in 1974 a bottle bill adopted by the D.C. City Council was vetoed by the
mayor. In heavily populated Montgomery County, the county does run one small
recycling section near the landfill operation in Hockville. There are also
a few private firms which pay money for materials a consumer brings in to
be recycled. But these few efforts are small and relatively unknown to the
general population of the county. And they are typical of the^pU^k^of recy-
cling centers In America as a whole.
When I returned fto* Washington from Oregon, I talked to my new household
about separating and recycling "garbage. " They all agreed it was a good sug-
gestion. But on discoverlng^the c3.oeest recycling center was the one in
Roekvllle, 15 Biles from our Bethesda home, household enthusiasm and incentiv<
to recycle was severely diminished. It is obviously uneconomical, even un-
ecological in terms of gas and oil, to travel so far f'~ voluntary recyclirr.
-------
And for working people such a trip is , to say the least, inconvenient.
We do not have land, resourcee or energy to waste. Our current landfills
are filling up. Presently garbage amounts to I1/? billion pounds daily inthe
U.S. Top agricultural and wetlands are used for landfill. The factors that
Bake land bad for farming also Bake it undesirable for landfill.
There are those of us who support enlargement of our wilderness system. Do
4ttf*wi,
these same people separate, garbage? Do you? My feeling is that if nore people
actually performed this very important personal action, there would be more
conveniently located recycling centers, and there would be nationwide deposi.*;
legislation. At the sane time, such individual action will insure that we
will have extensive wilderness for us and our children to experience. For
what will America the Beautiful look like in the years to come if our throwaway
living continues? I envision more dumps, aore cane and bottles along the roads
and trails, and everywhere the Earth mined logged and destroyed. This will
effect you directly when you discover that your favorite city, state or natio-
nal park is now and official dump.
Why wait until such a time, when it's too late? A National Bottle Bill would
be an excellent beginning to national recycling efforts and legislation.
If the Earth is destroyed, we too are destroyed. If virgin wilderness land is
mined to meet our insatieable needs, we ought to at least recycle the products
until they can be used no more. Or that land, and the creatures that inhabit it
will be wasted, just as its materials have been wasted.
Han's vanity has led him to believe that everything on this earth is for his
use alone. We have too often neglected to look at our world as a finite pla-
net, with finite resources. We can continue in this way, mining, poisoning,
clearcutting, destroying. And in the end we will die along with a Planet
Earth too heavily burdened by our foul mess to survive. We will also set a
precedent for destruction on other worlds as well.
The time is here, the time is now to live with the Earth as it lives with ue
—-circularly. Let's pass a National Bottle Bill, for it's a start.
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WILLIAM SADD, PRESIDENT OF THE GLASS PACKAGING INSTITUTE
STATEMENT TO THE RESOURCE CONSERVATION COMMITTEE
ON
BEVERAGE CONTAINER DEPOSITS
OCTOBER 19, 1977
I am William Sadd, President of the Glass Packaging Institute,
which represents most glass container manufacturers in the United States.
Obviously, our companies and their employees have a major stake in the
Issue under discussion today. It is indeed ironic that this industry,
which has made possible the choice between refillable and nonrefillable
packaging, should be one of the targets of this type of discriminatory
legislation.
There is no disagreement, even in the studies for EPA, that the
direct result of a deposit law will be substantial losses of skilled,
high paying jobs and substantially reduced markets for glass containers.
There are 127 glass container manufacturing plants located in some
27 states and 90 congressional districts. These plan.ts are often in
small communities such as Dayville, Connecticut; Laurens, South Carolina;
Keyser, West Virginia; Streator, Illinois; Sapulpa, Oklahoma; where they
constitute, if not the principal, one of the principal employers. The
effect on employment in communities such as these will be tragic.
Glass container plants have been designed to operate optimally at.
peak production. It is highly unlikely that some of these facilities
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-z-
can continue to operate at a 35 or 40 percent reduction in production.
Instead, entire plants may be forced to close, which will serve to
increase the number of unemployed. Those plants continuing to operate
at reduced production levels will use substantially greater energy per
unit of output. And with reduced production the price to consumers for
glass containers for medical and food usage, as well as beverages, will
increase.
The effect on the industry will be ultimately anticompetitive and
most likely lead to concentration.
What great public benefit will occur in order to justify these
losses of skilled jobs, plant closings, increased consumer costs and
market concentration.
EPA staff is advancing to this Committee the proposition that a
mandatory national deposit on beverage containers would be an effective
means to reduce litter and solid waste and to conserve energy. The
limited data available, and any reasonable range of assumptions, shows
that any such benefits are highly uncertain. On the other hand, it is
quite certain that such legislation would create some significant adverse
effects which I will discuss. Therefore, quite simply, we believe that
the EPA staff proposal is a bad idea.
Moreover, this EPA staff proposal raises a very fundamental issue
of political philosophy. It takes the destructive and unnecessary view
that environmental quality must be achieved by a "less is better" approach.
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-3-
The deposit proposal means we should create job dislocations and cut
back on production in order to try to clean up litter, reduce solid
waste, and conserve energy. I should think that this Administration
would be strongly inclined to reject such a negativist philosophy in
favor of the philosophy that solves environmental problems by building
and expanding new industries and institutions, employing more people in
productive ways. This approach is eminently feasible, with resource
recovery and litter cleanup at its core instead of major production
cutbacks. The mandatory deposit is not a symbol of environmental cleanup
but rather the symbol of an anti-growth movement. I am reminded of
President Carter's outspoken campaign and Environmental Message state-
ments that the goals of environmental and economic progress are not, and
need not be, incompatible. He repeated this theme, with regard to
energy, in his 1977 Energy Message. Such is not the philosophy of the
mandatory deposit.
Let's take a look at these great benefits of a deposit law --
Litter Reduction
Of course, litter is a problem and it is the only potentially
legitimate issue raised in support of a deposit law. While we could
argue for hours about litter reduction claims from the Oregon law, one
fact is clear -- beverage containers are only one part of litter, and a
deposit law does absolutely nothing to eliminate the majority of the
litter problem. A more wise public policy would attempt to reach the
entire problem.
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Solid Uaste Management
Of course, the volume of residential solid waste poses environmental
and economic problems in a number of communities. Disposal practices
should be brought up to environmentally acceptable standards where this
is not now the case. Moreover, wherever the economics warrant, resource
recovery should be employed as a preferable alternative to disposal.
For the sake of simple efficiency, efforts in this regard should focus
on broad segments of the waste stream, not discriminatorily, on a minor
segment such as beverage containers, which account for only a small
percentage of urban waste. EPA staff itself summarized this issue when
it stated: "The reduction in waste collection and disposal requirements
for a community is not likely to be great. . ." In short, solid waste
management as a reason for deposits is an illegitimate issue.
Energy Conservation
Of course we need to conserve energy in all sectors of the economy
to the extent that this is feasible without unreasonable costs or side-
effects and to the extent that the burden is equitably and sensibly
shared. Predictions of energy savings under a deposit law are quite
ill-founded, and such a law could well function to deter more meaningful
energy conservation actions.
Now, let us turn to some of the problems of a deposit law.
First, we must note that our nation would have to pay a price for
any such law -- a price in terms of unemployment, capital expenditures.
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-5-
and consumer costs and Inconvenience. This being the case, any rational
proponent of such a law must be able to demonstrate with a high degree
of certainty that substantial benefits -- not otherwise attainable at
less cost, and outweighing the price to be paid — will be achieved.
This is plainly not the case with deposits.
It is widely agreed that roughly 15,000 to 60,000 jobs would be
lost, eliminated, under a deposit law. These would be skilled workers,
generally heads of households. The losses would largely be concentrated
at certain beverage container manufacturing facilities that would be
shifted to much lower production levels or closed altogether. This
would intensify the community impact and re-employment problems.
Major capital expenditures would be needed to construct new facilities
and modify existing facilities to handle refillable containers. A lot
of perfectly good, modern equipment, would be wastefully scrapped. Not
only would these costs divert limited industry resources from planned
Investments in new energv-conserving processes and equipment, but they
would inevitably affect consumer prices in an inflationary way.
I can confidently state that the cost of the refillable bottle will
ultimately and necessarily be increased should the non-refillable bottle
disappear because our companies would be required to spread their
overhead over a greatly reduced volume, and our industry is capital
intensive. This Increased cost would have to be spread over food and
medicine containers as well. I will not attempt to state the case for
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-.6-
the brewing or soft drink industries, but in my opinion the idea promoted
by EPA that consumer prices will drop is absolutely erroneous.
Moreover, the highly competitive free market that now allows wide
consumer choice would be drastically reduced, distorted in a manner
which is hard to quantify but which would significantly affect all
consumers. The Government should promote, not restrict, competition.
Since the public would pay such a steep price for a deposit law,
there should be a great certainty of achieving major benefits with such
a law. But there is the core of the problem. The supposed benefits are
just that. They are highly speculative and uncertain.
Benefits are claimed on the basis of studies which in fact rest
upon some very critical assumptions. These assumptions are often arbitrary
at best, more often biased and unrealistic.
All of the claimed benefits hinge upon the way the market would
respond to deposits, i.e., upon the projected behavior of producers and
consumers. Market response includes factors such as the future level of
sales, the container mix, and the "trippage" rate. Such factors, will
determine consumer costs, energy consumption, litter levels, and so
forth.
The major study relied upon by the advocates of a deposit law, the
1976 FEA/RTI study, warns that "no data exist today to predict with any
degree of accuracy what the market response to a deposit law is likely
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-7-
to be." Similar caveats appear in the more recent, July 1977 draft
report to EPA by Franklin Associates which seeks to estimate container
mix. These studies and all the others are based heavily on assumptions,
a fact that always gets lost in the shuffle when advocates cite hypothetical
study conclusions as proven gospel.
Let me cite just two examples of the dubious assumptions used.
First, there is trippage rate. EPA staff assumes in the documents
before the Committee that there would be a 90% return rate. This would
be a very high rate of return. If the actual return rate were much less
than this, even in the 75-85S range, the results of a deposit law would
be far different than EPA claims. Beer and soft drink witnesses will, I
am sure, point out the reasons why high rates of trippage are illusory.
As another example of dubious assumptions, let's look at those used
in the FEA/RTI study to produce estimates of new unskilled jobs, in the
distribution and retail sectors, to handle returned containers, that
will supposedly far outweigh the substantial job losses I referred to
earlier.
Among the more obvious biases in the FEA/RTI assumptions are these:
The use of unexplained estimates for distribution labor requirements
(for returnables) that greatly exceed past experience;
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-8-
A failure to take account of substantial possibilities for
meeting new retail work demands with existing personnel during
daily slack periods and with limited overtime.
The totally unrealistic assumption of no_ productivity growth
in the distribution and retail sectors and failure to recognize
the competitive incentive that affected industries would have
to improve productivity to cut costs, with a lack of apparent
reasons why productivity could not be improved.
The assumption that any necessary new retail personnel would
be paid at average rates for the entire retail industry rather
than at the lower rates corresponding to the nature of the
work involved.
These examples are only indicative of the unsubstantiated and
biased case that EPA staff and others have made for a deposit law. I
urge each of you to read the Stanford Research critique of the FEA/RTI
study.
Are there better ways to reach the goals sought by EPA? After all,
It is the job of this Committee to define and weigh alternatives.
Litter
Industry, with no help from the federal government, has developed
through Keep America Beautiful a systematized litter reduction program
for urban areas. The state of Washington in conjunction with industry
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-9-
has implemented a comprehensive litter reduction program. Rather than
evaluating and trying to promote and improve these systems, some persons
at EPA have actually tried to undermine the KAB effort. It has been
suggested that a small tax on industries connected with the litter
problem would help provide the impetus for such programs. But more
important than the money is the need for a cooperative spirit. If
industry, EPA and the environmental community could for once unite on
the litter issue, we believe that substantial progress could be made.
Solid Haste
Solid Waste is not a problem measured by national figures on tons
and dollars -- it is a localized or regionalized problem which can only
be met by specifically tailored solutions. Resource recovery technology
is advancing and the federal government has been helpful. Here again, a
modest tax has been suggested by some as a means of accelerating this
development. Certainly it makes more sense to us to build a new recycling
industry to meet this challenge than to tear down existing industries in
order to reach only a very small fraction of the total problem.
Energy
Industry already has a very strong incentive to conserve energy --
that incentive is cost. One of my member companies has reported that it
has tried a new annealing oven which has reduced energy input by 90™.
Another company has experimented with a new system which may reduce
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-10-
furnace energy requirements by 25 to 50?. These and other approaches
have two things in common: they are capital intensive and they will
reduce energy requirements across our entire line of products, not just
beverage containers. Under a deposit law which could eliminate up to 30
or 40% of our market, how can any reasonable person expect this industry
to have access to the capital necessary to implement this sort of conservation
measure? Moreover, resource recovery operations offer the positive
prospect of developing new sources of energy.
In conclusion, I urge each of you to pay attention to the underlying
documents. Do not accept EPA staff papers as factual. Make your own
analysis and reach your own conclusions.
If you do so, I think you will find that there is only one issue in
support of the proponents — and that is litter -- and as to litter, it
only makes sense to adopt programs aimed at the whole problem and which
can be implemented without disrupting the economy.
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SEflflTOR fflflRK O. HPTFIELD (R-OR6GOn) Washington. D.C. 2O5IO 2O2M4-J753
Dote: October 19, 1977
STATEMENT OF SENATOR MARK O. HATFIELD TO THE RESOURCE RECOVERY
COMMITTEE REGARDING THE FEDERAL BEVERAGE CONTAINER DEPOSIT
ISSUE
Senator Mark 0. Hatfield
I wish to thank the members of the Resource Conservation
Committee for providing myself and other interested parties
the opportunity to comment on the national returnable beverage
container issue. It is my understanding that you will soon
be releasing your report on this matter to the President
and the Congress, and I would like to express my appreciation
for your work on this important project.
This is a program which has worked in Oregon for the past
five years and in Vermont since 1973. Legislation providing for
a national program of returnable beverage containers has
been before the Senate since 1973. Hearings have been
held on the issue by both the Commerce Committee and the
Energy and National Resources Committee of the Senate. The
full Senate also had the opportunity to consider the bill
in June of 1976. The Environmental Protection Agency has
promulgated regulations requiring the use of returnables
on all federal facilities. The National Commission on Supplies
and Shortages has also endorsed the deposit concept in its
comprehensive study of materials shortages.
Reducing waste and encouraging the conservation and reuse of
scarce materials are vital concepts if we are to deal seriously
with the energy and natural resource shortages facing us. Another
challenge we must confront is the need to curb certain forms of
pollution. Litter, specifically beverage containers in our
parks and along our nations roadways, is the (pavM** issue
we are addressing here today. It is not only this obvious
pollution and waste of natural resources which concerns me,
but just as importantly, the inducements prompting what I have
called the "throw away ethic."
We have seen over the last decade an increase in environmental
consciousness in this country. This is an awareness based
on the need to preserve our natural environment as well as
an adequate supply of resources. Yet, at the same time, the
beverage industry has to a great degree, turned to more
expedient methods of production and disposal - the one-way
bottle and can.
In response to this increasing concern for environmental protection
several states and localities have implemented legislation banning
non-returnable beverage containers. These programs have become
extremely popular in the particular areas where they have been
tried, and have also substantially reduced the amount of
unsightly beverage containers found littered along roadsides
and within our parks and recreation areas.
To document the success Oregon's law has had on reducing roadside
litter, a survey was conducted in Oregon by the State Highway
Department. During this survey 30 randomly selected one-mile
stretches of road were studied for .three years. The study began
one year before the bill was implemented, and it continued through
the second year of the law's existence. This survey showed a
significant reduction in beverage container litter. The reduction
after one year was shown to be 72%, and after two years the
amount of beverage container litter was reduced 83%. This was
accomplished with no increase in litter clean-uo expenditures
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— 2—
or activity in the state. More recently the Oregon Journal
completed a study of 10, one-mile stretches of highway in
Oregon and Washington of comparable traffic volume. Oregon's
roads, thanks to the returnable beverage container program, were
found to have 7.5 times less beverage container litter than
those in Washington, which has opted for the "Litter Tax" approach.
The deposit law'is also a very popular law in Oregon, having a
90% approval rate among residents with estimates of 95% participation
in the container return program.
We have often heard arguments raised by opponents of this
legislation that despite the popularity of this type of law, it
will result in a serious increase in unemployment; it will increase
beverage prices; and it will hinder existing recycling programs.
The main argument offered by the opponents of this legislation
is that of job displacement and a high level of unemployment
due to the switch to returnables. I would suggest that there
have already been job losses in the beverage and container
industries as a result of increased concentration and consolidation
of their plants. This is at least partly a result of their
decision to promote the no-deposit, no-return container. For
example, in 1935 there were 765 breweries in the United
States and yet today there are less than 100.
In Oregon we witnessed an actual increase in employment in
Beverage-related industries of about 365 jobs during the first
year following enactment of the law. A sufficient "phase-in"
period, such as three years as provided for in my legislation,
should mitigate against undue unemployment hardships in the
industry. According to a study released a year ago by the
Federal Energy Administration, a net gain of 118,000 jobs can
be expected in beverage-related industries by 1982 as a result
of a national returnable beverage container program. This
represents a 32 percent increase in employment in iMMMMpa*
There is also the question of the sf^eGt this law will have
on beverage prices. It is well knownVthe consumer has often
payed extra for convienience, sometimes unwanted convenience.
While opponents of this bill charge that it will increase the
cost of WMOT beverages to the consumer, I submit that the
no-deposit, no return concept, in fact, resulted in increased
beverage costs. The shared-cost of containers envisioned in my
bill actually should reduce the real price of beverages from
two to five cents according to most studies.
Unlike throw-away containers, refillable bottles and recyclable
cans are reused many times before they are finally discarded. In
Oregon we are averaging 15 trips per reusable bottle. Both Oregon
and Vermont have witnessed return rates for both bottles and
cans of 90 to 95 percent. Reuse and recycling actually reduces
consumer and disposal costs, while the refundable deposit provides
a financial incentive for the consumer not to litter.
A fully returnable program should compliment rather than hinder
existing as well as future recycling projects. Another
phenomenon resulting from Oregon's law is the increase in
"sca-enging" for returnables that are improperly discarded,
due to their 5* refund value.
I would like to remind the committee that this proposal is not
something that has never been tried before. As recently as
1960 95% of our soft drinJCs and 50% of our beer
were sold in returnable containers. Furthermore, five states
and several localities have passed returnable beverage container
legislation in one form or another. This conservation initiative
will be just as effective at the national level. Indeed, a national
law may be necessary for purposes of uniformity as more and more
states and localities adopt dissimilar deposit laws.
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I reject the notion, offered by some, that the success of
deposit laws at the state and local level is attributable
to either the rural nature of the areas involved, or to a strong
ecological commitment among individual citizens. The beauty of
the "Beverage Container Reuse and Recycling Act", currently pending
in both the House and Senate, is that it can be effective anywhere -
from the smallest towns to the largest metropolitan centers. Disposal
cost internalization - or the five cent incentive not to litter -
will be just as effective in New York City as it has been in
Baker, Oregon.
Furthermore, I should point out that prior to the implementation
of Oregon's law in 1972, we had our share of skeptics.Wf% take
great pride in Oregon's accomplishments, particularly with the
regard to the success of its progressive environmental policies.
I would suggest, however, that much of Oregon's commitment to
the preservation of a clean natural environment is the result
and not the cause of legislation such as our returnable beverage
container law. In Oregon the pride we have for our State is
mirrored by this legislation, and the "conservation ethic"
it has instilled in its citizens can be just as effective
elsewhere.
My beverage container bill is a positive incentive program. We
know it works based on practical experience. Voluminous studies
have substantiated that it will be just as successful at the
national level. In closing I would urge the committee to
reject the doomsday forecasts which representatives of many
beverage-related industries will undoubtedly provide you. We
heard the same arguments several years ago in Oregon. They
have proven to be unfounded concerns. It is time that we provide
the citizens of this country with a positive approach, through
which they can participate in a program that will conserve energy
and natural resources, reduce litter, and MM**M more responsible
habits among the consuming public.
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United States
4/America
To... 123
Congressional Hecorfl
PROCEEDINGS AND DEBATES OP THE 95'* CONGRESS, FIRST SESSION
WASHINGTON, TUESDAY, OCTOBER 25, 1977
No. 172
NATIONWIDE BAN ON THROWAWAY
CONTAINERS OPPOSED
deposit la
:ort» to reduo.
shed more
established
Committee
, and directed.
:ommendations|
Congress on
light
the Resource _
under Public La
It to study and
to the Prestden
that subject wl—
Pursuant to Its
tec h« _
Ing public
viewpoint*
eragt
method
commit-l
of hold-l
Tarlous)
ben
other
oi the _
that subject last
If it to Utter we are concerned with, ttw
State ot Washington bM a model Utter la*
tbat bM achieved results at least equal to.
and probably better, than Oregon has
achieved In terms oi reducing roadside trasb.
It to bawd upon public education, the wide-
spread distribution o> litter receptacle*, and
penalties on those who litter. Tbe program
involved in the sals of materials that may
end up a* municipal traab. Conslderlnf tbat
only 30 to 30 percent of litter Is beverage
container*. It Mem* that the model approach
would b*v* a lat nor* beneficial remit to
the long run in reducing overall litter, rather
than little from Just one source.
A second major concern to all of us to
•nergy, and whether a nationwide deposit
on beverage containers^ might help us save
n*'enem. ThU Is certainly one area that
Member* of the Committee, in* name to
William J. Rugbw. Member of Congress from
the Second Congressional District of New
Jersey. I am pleased to have this opportunity
to testify before you afthto important *ub-
jeet of a nationwide system of beverage con-
tainer deposit*.
Tbe major Issue before this Oommlttc* to- ,
day to whether we should attempt -to elimi-
nate one source of solid waste— namely .bev-
erafe containers from the waste stream.
Tbe means for controlling those would be a .
mandatory deposit that would . discourage
disposal of those containers, and encourage
their re-use.
The benefits to be derived from that ap- .
proachj according to its proponents. Is a
savings of energy, the control of litter, and
jk jeductlon In the amount of solid wanes.
Those, of course, are worthwhile objec-
tives. But as usual, there to a price tag asso-
ciated with the advancement of our envi-
ronmental goals.
In my bom* state ot Hew Jersey, we have
over 14,000 people employed directly 19 the
glass Industry, and many tbtfusand* men'
employed Indirectly. A great many of thosv
employs** are In my own Congressional Dis-
trict. which already has one of the highest
unemployment rates In the nation.
It to axiomatic tbat any measure that dis-
ur* of a certain -prod-
-
a certain -prod-
Job* la
uct to going to result In tb* loss of ]
that particular Industry. Tb* effect of „—
law* In the** states tbat have them has dem-
onstrated that Job losses do result.
In Oregon, the Owens-Illinois plant In
Portland had 16 forming machines before the
bottle tow went into effect. In February.
1970, tbe President of l*>eel 119 of tbe Olaas
Bottle Blower* Association. Gordon J. Brook.
reported tbat two of the forming machines.
representing BO Jobs each, bad been removed
from tbe plant, and tbat two more were
Idled, all as a consequence of the new law.
In addition, ft can plants In the neighbor-
Ing State of Washington closed down com-
pletely after the ban went Into effect.
Although a survey sponsored by tbe State
ot Oregon Indicated tbat 3*0 Jobs were gained
as a result of tbe ban. It's also apparent that
450 Job* were lost, for a net loss of AM Jobs
' In the two states. •
Tb* question then becomes Whether we
wish to.replicate that experience on a na-
tionwide besto. . •
If we bad no choice, then w* will hav* to
do It. and pay tbe price.
But ar* w* teced with that situation T I
frankly don't think so. I think w* can
achieve our goal* without putting a tot of
people out of work. la fact, some of tbe alter-
natives open to us may accomplish our same
goals «v«n more effectively than would a
mandatory nationwide beverag* container
deposit.
on beverage containers-Butuk —„,, —
some'energy. ThU Is certainly one area
needs a great deal of study.
It appears, for example, that reflllable con-
tainers must be made of stronger and more
durable materials, and tbat requires more
energy In the manufacturing process. Be-
cause they are heavier, more energy to re-
quired to transport these containers, per-
haps as much SO percent more.
. Beyond that, to be effective In saving
energy, a bottle must be reused a certain
minimum number of times. Although thto
bas been achieved m Oregon, It to' not clear
that thto minimum level of reuse—probably
around 0 returns per bottle—will be achieved
nationwide. Consumers In some areas, such
ss New York City, have demonstrated an
overwhelming preference for tbrowaway con-
tainers as compared to other big cities. Some
tests conducted at Yosemtte •National Park
and at various military bases indicate that
the minimum level of return* may not be
achieved universally. "* -
•Tier* an also •«•-*— .».'
to the unproductive purpose of storing a lot
of empty bottles and cans. Tbe bottler will
have to go to great lengths to pick up end
drop empty bottles and cans.
We arc likely to encounter a great deal of
public resistance. Since 1B70, Dottle laws
have been rejected In 10 out of the 18 refer-
endum* tbat were held at the State and local
level. To many people, wbabave become used
to throwing out their empty bottles and
cans, the deposit will simply be regarded as
a cost of tbe product. And I dont have to
tell yon what the glass worker of tbe unem-
ployment line would be thinking. Finally.
It's going to cost the consumer more money.
In conclusion. It to my feeling that a na-
tionwide ban on thnwaway containers will
not result In a substantial savings of energy
or any meaningful reduction In our solid
waste burden. In terms of litter control.
wsate buroen. in icntu w »*.*, »«.„„.
there are otber approaches that can be ss
much or more effective.
• In addition, a number of negative results
might very well come about, Including a Ices
In Jobs, increased consumer prices, and re-
sentment among a great many people for tbe
Increased Inconvenience In their Uves.
Because I have so many glass manufactur-
jnx-DlWlct, I have made an ef-
"
-Tbere are aiso w> •»«••* «•*.
quired for cleaning the bottle,
us*, and the potentiaiwfor lnc.»-~.
- —' *- transport reflUable botttlss back
i. Tbe financial and energy expendi-
"— v«*Mino> Mid maoufact*
i for^aach r*-<
—,. — , _ crsased truck
travel to transport renllable botttl*
and forth. Tb* financial and energy expendi-
tures for converting bottling and manufact-
uring plants to tbe u*e of renllable bottles
must also be considered.
Considering tbat manufacture of nonre-
turnebl* beverage container* accounts toi
only one-half of one percent «f our nattont
total energy usage. I seriously questim'
whether this to a fruitful area for a con-
servation effort, particularly if It to'so costly
In terms of Jobs.
Tbe final item of concern to ttie Impact of
disposable beverage containers on our over-
all management of solid wastes. I am of tbe
viewpoint that' the problem* will persist
whether or not we eliminate beverage con*
talners from the .west* stream. And Itl pos-
sible that such a piecemeal approach may
Just undercut our attempts to make^our re-
source recovery and recycling programs eco-
, -,
fort to keep Informed as to"tbalr activi.
and I know that they are making t- serious .
effort to reduce their energy usage. They- are*
achieving some successes and more ere.
hoped for.
Tbe main problem with disposable bever-
age containers to tbat they are frequently
disposed of on our roadsides, parks, and
otber public places, IrttrHE of In the trash--
can where they belong. The clear success of
Washington State's model Utter law— a M
percent reduction In Utter-Ms a clear Indica-
tion tbat there are viable alternatives to,bo*-
tle laws — alternatives that spread tbe bur-
den around to all producers ot litter and
dot Just one Indusbry.
. One fruitful esea of Inquiry would be a
program to encourage our states .to follow
tbe l*s,d ot Washington Btat*.
Such a program when combined with ln-
"ereaasd use of proven resource recovery tech-
niques would b«lp us achieve our T"m*MT'
goals without Inviting economic disruption,
Inconvenience, and a loss ot Jobs. Thank you.
bur overall wastes, only penravn .— __ ,
percent to aluminas, and between 7 sad •
percent to glass. Those an not overwhelming
amount*. In addition, between U end Tl
percent of the aivsnlaum can b* extracted
for recycling, and between Mt and 00 percent
of tbe glass.
There to on* tost Hem thst I would Iffce to
touch upon, which to an Intangible factor.
but nevertheless significant,
As a Federal oAcehoMer who must-seek
election every two yean, I have eeen'a grow-
ing tide of reeentanent against Federal Intru-
sion* Into Individual personal and business
lives. Borne of these Intrusions an neces-
ry, but Where only «—*- —«~ *>u«n«n.
tortdteule.
W* b*nn*Ci irnr——i— -—T--,_ .
. only to find out later thst w* treated a «
cancer hasard.
• Some of tb* regulation* promulgated by
OSBA hav* create* turmoil In tb* business
community and la som* Instances hav* been
difficult to justify.
With a nationwide bottle law. we would
be creating a beetle for an awful tot of
people, and perhaps unnecessarily. Tb* con-
sumer will have to cert bis empty bottles
and can* back and forth to tb* market. The
storekeeper will neve to do a lot of bookkeep-
ing snd paperwork to keep track of deposits.
as well a* devote a portion of bis prtuolsei
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Mr. Chairman:
I appreciate the opportunity to address the Committee
today on an issue which is vital to the necessary restoration
of the "conservation ethic" here in the United States. That
is of course/ the issue of national beverage container deposit
legislation. The Resource Conservation Committee has been
charged with the responsibility of making workable recommendations
to both the President and Congress on a broad range of resource
conservation policies, and I applaud the Committee for it's
efforts here today in affording the public ample opportunity
for meaningful participation in this process.
I will keep my statement as brief as possible, as I
have a substantial amount of material I would like to submit
for the record which covers those areas which I do not have
time to touch on today. I would like to address some of the
questions raised by the Committee on this issue, primarily
within the context of Vermont's experience with it's deposit
law.
Vermont's experience has been a tremendous success. While
that experience cannot by itself provide all of the answers to
questions raised about the impact deposit legislation would
have on a national level, the patterns which have developed
in Vermont certainly provide encouragement for those of us
who maintain that a national law would have a significantly
positive effect in terms of energy and material resource
conservation, litter reduction, consumer savings, and job
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creation,
I would s;tr_o_n_gly urge the Committee to come forth with
a recommendation that the federal government adopt specific
container deposit legislation. The trend is very clear. As
time goes on, state after state will follow the lead of
Oregon and Vermont in passing their own form of deposit leg-
islation, as evidenced by the referenda victories last November
in Maine and Michigan, and by recent ordinances enacted in
Virginia counties. And, while I would in no way discourage
individual states from taking action in this area, I believe
the federal government has a responsibility to address this
problem, if for no other reason than for the sake of the
beverage industry. A state-by-state proliferation of deposit
laws using different systems, quite possibly would create
some problems for the industry. However, a uniform federal law,
although not superceding state laws falling within specific
guidelines, would provide a stable framework for industry to
work within. The substantial conservation benefits from a
deposit law can only be fu_ljy realized on a national scale.
Some people have proposed alternatives to deposit legislation.
Perhaps the most widely proposed alternative, at least coming
frora the industry, is a so-called "litter tax", or the approach
Washington State has taken. This type of system can take many
forms, but it boils down to assessing a tax on the sale of each
beverage container or component in the solid waste stream, with
the resulting revenues directed toward litter pick-up and/or
so-called "comprehensive recycling programs". This is not the
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answer. This approach tries to address the problem after
the fact., and is not a preventative measure. And, it can
be argued that this approach actually "legitimizes" litter
and waste. The consumer, having paid his or her "litter
tax," then has the purchased "right" to litter and waste.
The most important thing to point out about the litter tax
approach, however, is that the resuits from this kind of
system are pale in comparison with the results achieved with
a deposit system. Vermont's deposit system has practically
eliminated beverage container litter, and has enabled us to
retrieve 95% of all beverage containers sold in the state for
reuse or recycling. Washington State can certainly riot
claim those results.
I should state very clearly at this point that a federal
deposit law should not supercede state and local deposit
laws, as long as they are adequate in addressing the problem.
While a uniform deposit system is preferable to a tiered
system, I think it would be counter-productive for the
federal government to come along several years after a
state has paved the way and impose a new system, when the
people of that state have adjusted to their system and it is
working well with the desired results. And, my feeling is
that after implementation of a national uniform deposit law,
those states with tiered systems will eventually shift to a
uniform system to bring themselves into conformity with
neighboring states.
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In terms of the broader impact that national deposit
legislation would have on American society, I believe it
would herald the beginning of a new consciousness--a new
awareness in this country. It would provide all our
cit i zens, from every walk of life, with the opportunity
to participate in a meaningful conservation effort. It
would pave the way for the development of a new "conservation
ethic," replacing the blatantly wasteful "throwaway mentality"
that has pervaded American society for too long. Our deposit
law in Vermont has done just that. It has instilled a great
deal of pride in Vermonters. They feel they are doing their
part and making a valuable contribution to the effort to
curb waste. This is vividly demonstrated by the degree of
public acceptance and enthusiasm for the law. Recent surveys
show that over 90% of Vermonters support the deposit law,
and believe it .should be extended nationwide.
The economic impacts of a national deposit law have
been examined in detail in study after study. Additionally,
we have the experiences -of Oregon and Vermont to look to.
The positive economic impacts are many. Significant consumer-
savings have been brought about by Vermontls law, and will be
made available to consumers nat ionwide with passage of a
national law. This is primarily because a deposit 1 aw increases
the availability of the refill able container, as opposed to the
th rowaway bottle that is the predomi nant glass package available
i n r.ost areas of the country. We have calculated that Vermont's
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Page 5
projected savings on the order of $2 billion a year with a
national law. Additionally, a national law would create sub-
stantial numbers of new jobs, and this is borne out again by
the Vermont experience. Vermont officials estimate that the
equivalent of 450 new full-time jobs have been created in our
state. While that may seem like a small number, it is not
insignificant in a state of roughly 470,000 people.
The numerous studies done on the impacts of a national
law invariably project a significant increase in employment
in the beverage and related industries. The most recent
in the beverage and related industries. The most recent
FEA figures estimate the number at about 113,000 jobs, with
a resulting increase in labor earnings of some $879 mill ion.
Opponents of deposit legislation are quick to point out
however, that there are also projections which foresee
a loss of some•exist ing jobs. I have seen a number of industry
studies which predict disasterous dislocations. I must point
out though, that these industry studies are all predicated on
the assumption that we are seeking to returne to an all-
refillable bottle system. Others predict that even without
mandating an all-reffillable system there would be a drastic
shift in consumer preference away from purchasing beverages in
cans to purchasing them in bottles. We would not recommend
an all refillable system. Such a system would probably result in
significant dislocations in the can manufacturing sector of the
industry, as well as create problems for the beverage producers.
However, a deposit law that applies a urn-fo^rm, minimum deposit
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on all beverage containers would not be likely to result in any
significant shift in consumer preference for container types. A
deposit system would certainly not doom the beverage can. in fact,
a uniform deposit system would actually heighten the attractiveness
of buying beverages in cans, as they are lightweight, unbreakable,
and more easily tr an sported. As an example, my staff conducted
a survey of beer distributors in Vermont earlier this year. We
found from this survey that prior to the law, cans made
up about 37% of the market. Now, that percentage is about 34%,
with that figure on the upswing primarily because consumers are
finding that the can is a convenient and attractive package given
the presence of the deposit law.
Most important in terms of economic impact however, is the
necessity to provide an adequate phase-in period for implementation
of a deposit law. The legislation that Senator Hatfield and I
have introduced addresses this more than adequately. We have
proposed a three year phase-in period which I think, quite frankly,
is more than enough time for adjustments to be made and for
industry to gear-up in prepara t ion.
In terms of the environmental impacts of a national deposit
law, ther are many and they are all extremely positive. It is
indisputable that this type of legislation dramatically reduces
litter. After the first year Vermont's law was in effect we had
experienced a 76% reduction in beverage container litter, and a
35% reduction in total litter volume. This was achieved with a
return rate of only 83 percent. While a litter survey has not
been conducted recently, since that time Vermont ' s return rate
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has risen to 95 percent, so it is logical to assume that litter
has been reduced even more significantly.
Perhaps the most important feature of a deposit system is
that it would enable us to conserve substantial amounts of material
and energy resources. The Environmental Protection Agency has
estimated we could save over 500,000 tons of alurninurn, 1.5.
mi 11ion tons of steel, and over 5 million tons of glass by 1980
with a national system, significantly reducing our generation of
solid.' waste, The problem of disposing of the waste generated
by our "convenience society" has become one of the most pressing
issues for our municipalities. Beverage container waste is the
most rapidly growing segment of all municipal solid waste, in-
creasing at a rate of some 8 to 10 percent a year, almost twjLc_e_
the growth rate of total municipal waste. We could reduce this
burden by over 7 million tons annually with a national deposit
law, and alleviate that pressure on our cities and towns.
Again in examining Vermont's experience we find that the
deposit law has been the major factor in reducing costs associated
with solid waste collection and disposal. The law has been
responsible for a 25 percent reduction in the total state costs
in this area, even though inflation has increased manpower,
transportation, and capital equipment costs significantly, The
law has also been the factor in spurring material recycling in
the state. Presently, all aluminum, and all glass containers
that are not refilled, are being recycled. Some steel containers
are also recycled, but it is less economically attractive in
corr:pa rison to the other materials. Even ALCOA recent] v noted
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that the deposit law was responsible for enabling them to recover
over 400,000 pounds of aluminum 'cans in Vermont this past year, a
much greater percentage than anywhere else in the country.
The energy conservation potential of a deposit law is
probiably its most attractive feature, especially when talking
in terms of a national law. Even in Vermont, we have estimated
that the law potentially conserves roughly 700 billion BTU' s
of energy a year. That is enough to supply the home heating
requirements of over 15,500 Vermonters for one year.
Estimates by federal agencies indicate we could save the
equivalent of between 160 and 200 trillion BTU's per year.
That is the equivalent of 30 to 50 million barrels of oil annually,
certainly no small amount. In fact, to give a better perspective,
a 200 trillion BTU figure is equal to the combined energy output
of 12 1,000 megawatt rfuclear power plants. Regardless of the
figures, it is indisputable that an incentive system which
stimulates the reuse and reycling of the 70 bill ion plus beverage
containers produced each year will bring about substantial energy
savings.
In answer to those who would call £or more study of the
issue, I would venture to say that there is more information, and
more studies available on this issue than any other publie policy
issue we might debate. We have studies from FEA,EPA, Commerce,
and one forthcoming from OTA. We have studies from Oregon and
~>
Vermont, and we have project-ed impact studies from rnany other
states that are considering deposit legislation. We have the
experience, to date, of the systems established under the EPA
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LEAGUE OF WOMEN VOTERS OF THE FAIRFAX AREA
3911 King Arthur Ed, Annandale, Va. 22003 (280-5030)
TESTIMONY BEFORE THE RESOURCE CONSERVATION COMMITTEE, OCT. 19,1977,
on Beverage Container Deposit Legislation
My name is Pat Watt, and I am here before you today as president of the League of
Women Voters of the Fairfax Area, which comprises both Fairfax County and Fairfax
City, in the state of Virginia. You are doubtless aware that on September 1st
Fairfax County became one of the increasing number of states and localities to
enact beverage container deposit legislation.
At least five states and seven localities (Oregon, Vermont, South Dakota, Michigan,
Maine, Oberlin Ohio, Cayuga County NY, Berkeley California, Bowie Maryland, Mont-
gomery County Maryland, Fairfax and Loudoun Counties Virginia) have adopted such a
measure . The growth of this phenomenon is due to the gathering public awareness
that convenience has its price - and that it is more than we are willing to pay.
I would like to enumerate for you some of the difficulties encountered in Fairfax
County, as a result of being the only jurisdiction in the area to have a container
ordinance in effect, and to emplasize the benefits which would be achieved if such
legislation were approved on a national scale.
First the difficulties, as evidenced in Fairfax County! (it will be seen that these
problems arise as the result of Fairfax County being surrounded by jurisdictions
which have not enacted container legislation)
1. Solid Waste Reduction. It is too soon to tell,but it is likely that, with
legislation on a strictly local basis, the full potential for solid waste
reduction will not be realized. Legislation enacted piecemeal does not
encourage conversion to a refillable/recyclable system. Throwaways, after
return to the retailer, will continue to end up in the dump.
Federal legislation would provide the incentive for widespread changeover to
refillable/recyclable methods, thus the economies of scale would make it more
advantageous to the distributor to eliminate the one-way bottle (relieving pressures
on landfill areas).
2. Differing ordinances. In the Washington metropolitan area four jurisdictions
have approved container legislation. However, each ordinance differs in some
aspect from the others resulting in confusion to the consumer and possibly,
some difficulty to the industry.
Federal legislation would standardize requirements, and might be expected to
provide the impetus for use of certified containers, such as have been successfully
used in Oregon, and which reduce handling problems for retailer and distributor.
3. Problems of jurisdiction. In Virginia it has not yet been establish ed whether
control of beer containers is a legitimate function of a local jurisdiction, or
whether regulation of such containers is a responsibility of the state Alcoholic
Beverage Control Board. (Neighboring Loudoun County has approved a second ordinance,
which includes beer. This issue will be resolved in the courts when the Loudoun
ordinance is appealed.)
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10/19/77
LEAGUE OF WOMEN VOTERS OF THE FAIRFAX AREA
page 3
The benefits of federal deposit legislation:
1. Energy. The energy savings which could "be realized by a national container law
are estimated at between 165 and 244 trillion Btus annually. This amounts to
about .3$ of national energy consumption and is therefore a significant saving.
There are not too many measures which could accomplish this amount of conservation
witn^relatively minimal disruption.
At a time when unemployment is a vital concern, the fact that a refillable/recyclable
system is labor intensive should be an additional argument in favor of this
legislation.
2. Resource savings. The United States imports 8556 of its aluminum. Half a
million tons annually goes into beverage container production(ll$ of all aluminum,).
The aluminum industry supports tot concept of recycling this scarce metal.
Recycling aluminum is doubly advantageous since a new can is manufactured^by
recycling,for50^ of the energy required to produce a can from bauxite, the
raw aluminum ore.
3. Solid waste reduction. Throwawav containers make up about 7% of municipal solid
waste. This is equivalent to 8 million tons of containers (about 300 per capita)
each year. Abandoned containers clog landfills which are increasingly difficult
and expensive to establish and operate, especially in highly populated areas.
3. Litter reduction. Roadside litter is composed of about 65$ beverage containers.
Where container legislation has "been enacted over a period of time, the cont-
ainer portion of litter has substantially reduced. In 1975-76 Virginia taxpayers
spent one and a half million dollars for litter clean-up. This was money
essentially down the drain — it performed no lasting service. How much more
efficient, effective and educational to save money and encourage individuals not
to litter in the first place (an£ to provide incentives to others to clean up
afterwards) by placing a deposit on the littering item.
These potential savings, in reduced energy and materials demand, in landfill requirements,
and widespread litter reduction, can only be fully realized Iflegislation is adopted on
a national scale. The fact that local jurisdictions are increasingly giving consideration
to such-action shows the growing public awareness and sensitivity to the mounting
problems of limited resources. The excessive use of energy and materials inherent
in a throwaway system, a viable alternative 15-20 years ago,is surely an anachronism today.
To quote testimony we gave before the Fairfax County Board of Supervisors, "a returnable
system encourages recycling of metals, saves energy and materials, reduces pollution
caused by production of new containers, reduces litter, lessens the load on solid waste
management, creates jobs — and on top of all that it is cheaper!"
It makes sense — surely its time has come.
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STATEMENT OF THE
LEAGUE OF WOMEN VOTERS OF THE UNITED STATES
DELIVERED TO THE
RESOURCE CONSERVATION COMMITTEE
PUBLIC MEETING ON
BEVERAGE CONTAINER DEPOSIT LEGISLATION
OCTOBER 19, 1977
The League of Women Voters of the United States strongly urges that the
Resource Conservation Committee recommend federal beverage container deposit legis-
lation to President Carter and the Congress. The benefits to be gained in solid
waste and litter reduction, in energy and materials savings and In lower costs to
consumers provide overwhelming justification for such a recommendation.
In 1973, after a two year study of our nation's solid waste problems, the
League adopted a position on solid waste management that calls for reducing the
amount of waste we generate, recovering usable resources from the waste stream,
and safely disposing of the remainder. Since reaching agreement on that position,
local and state Leagues as well as the League of Women Voters of the United States
have spoken out again and again in support of federal deposit legislation. State-
ments submitted to this Committee by the Fairfax County, Virginia and Vermont
Leagues reiterate that message: a federally enacted beverage container law is
essential to stem the growing tide of discarded cans and bottles -- now estimated
at 65 billion containers annually — that waste energy, resources and money.
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Experiences in Vermont and Oregon and studies by the federal government
itself demonstrate the potential benefits of a mandatory deposit law:
* A Wf, reduction in litter volume.
* A $260 million savings in solid waste collection and disposal costs --
a particular benefit to strained local government budgets.
* A savings of over 40% of the energy needs of the beverage industry.
* A significant reduction in raw materials (bauxite and iron ore) consumed
by the beverage industry.
* Major reductions in air and water pollution by the beverage industry.
Moreover, all studies to date conclude that the shift to a mandatory deposit
system will result in a net increase in jobs, with estimates ranging from 60,000
to 115,000 new jobs. The League of Women Voters Education Fund recently published
an analysis of the relationships between employment and environmental controls.
In discussing deposit laws and jobs the publication noted that:
The Oregon experience can provide useful information on job impacts
since the law has been in effect there since 1972. A study by Drs.
Gudger and Bailes found that in Oregon, although 350 jobs were lost
in production labor, 575 new jobs were added in warehouse and handling
and 140 more in truck driving -- making a net gain of 365 jobs. Another
study by Applied Decision Systems (ADS) estimated the net job gain
at a lower figure, somewhere between 55 and 116. These figures are
lower partly because ADS found that retailers tended to increase the
workload of existing employees rather than hire new ones.
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In 1975, League members in 24 states cooperated with EPA to survey costs of
beverages in refillable and throw-away containers. The price comparisons they
made led to the conclusion that beverages in refillable containers are cheaper
for consumers. A later study by the Research Triangle Institute estimated that
under a mandatory deposit law, consumer savings would range from almost half a
billion to 3 billion dollars annually.
The League surveys also touched on what some consider a "cost" of a beverage
container deposit law -- the loss of convenience resulting from the need to return
empty containers. League members found that the current system in which throwaway
containers predominate imposes a substantial Inconvenience on those wishing to use
refillable containers. They noted that brand and size selection of soft drinks in
returnable containers was considerably less than the selection in nonreturnables;
in most instances beer was not even available in refillable containers.
In general, we find the arguments about the inconvenience resulting from
mandatory deposit legislation to be without merit. Consumers in Oregon and Vermont
have demonstrated that the vast majority of purchasers will return their used
containers. And the ever-present need for money by scouts, religious organiza-
tions and other groups provide them with incentive both to collect used con-
tainers from households not choosing to return them and to gather discarded
containers.
A shift to a mandatory deposit system, accompanied by public education on the
benefits of returnable containers, can accomplish still another objective: a
reinforcement of the message that in a world of finite resources -- both energy
and materials -- conservation, recycling and reuse can become a part of our lives
without disrupting our lifestyles.
-------
-4-
The League does not believe that any of the alternatives to deposit legis-
lation would be adequate substitutes, although some may be suitable as complementary
approaches to solid waste management.
A litter tax does not reduce the share of beverage containers reaching
municipal solid waste streams. It is generally estimated that three-fourths
of beverage containers are thrown in the trash. Costs of their collection and
disposal must then be borne by the taxpayers. Litter taxes neither prevent litter
nor provide economic incentive to individuals to pick up and return littered
containers.
Voluntary source separation and public education programs have not been
effective in achieving high rates of container return or litter reduction. Neither
can create the resource, energy or economic savings of a mandatory deposit program.
Direct recycling incentives, while useful in encouraging recycling, are
less beneficial than the direct approach of mandatory deposit legislation. An
emphasis in the litter system on direct reuse would promote far more energy and
resource conservation and pollution reduction.
A solid waste disposal charge system has the primary defect of not substantially
reducing solid^waste generation. Although it could be instituted in addition to a
mandatory deposit law and would have the effect of internalizing waste disposal
costs, its benefits in reducing litter and encouraging a conservation ethic would
be minimal.
In conclusion, the League of Women Voters again urges this Committee to endorse
a federal beverage container deposit law1. We do not deny that a return to returnables
-------
Are Jobs Really the Price
of a Clean Environment?
Could relaxing environmental standards help
relieve the nation's unemployment? Or are pol-
lution control programs a help rather than a
hindrance to the job market? Several years of
high unemployment coupled with economic re-
cession and energy shortages have brought the
tough pollution control laws of the early 1970s
under attack.
Critics charge that the costs of cleanup over-
burden our already lagging economy. Capital
spent for pollution control earns no profits, they
say; instead it eliminates jobs by leading to plant
shutdowns and by inhibiting industrial expan-
sion. Those who want environmental standards
lowered claim that job openings are delayed
because so much time must be spent consider-
ing environmental impacts of new projects.
They recommend that environmental goals be
postponed until economic conditions improve.
Supporters of environmental laws contend
that the employment impacts of pollution con-
trol have been exaggerated. While acknowledg-
ing that some jobs are lost— many in marginal
plants already on the verge of shutdown—they
point to case after case in which predicted shut-
downs and job losses did not, in fact, occur. They
also note that a new industry is developing in
conjunction with pollution control efforts and
cite figures showing a net gain in employment.
In addition, they offer examples of industries
that have actually saved money by modifying
operations to meet environmental standards.
In response to a growing public awareness of
the health effects of pollution. Congress passed
many ambitious environmental laws in the early
seventies. For example:
D The Clean Air Act Amendments of 1970
gave the Environmental Protection Agency
(EPA) authority to set national standards for air
Duality and allowed states to limit pollutant
emissions from industrial plants.
D The 1970 Occupational Safety and Health
Act set up a federal program for in-plant
cleanup by limiting emission of certain chemi-
cals in the workplace and requiring use of spe-
cial safety equipment.
D The Federal Water Pollution Control Act
Amendments (FWPCA) of 1972 (PL 92-500) set
a 1983 goal for making all waters in the country
fishable and swimmable. EPA was authorized to
set in motion a massive program for water
cleanup.
(For more information on environmental legisla-
tion see Federal Environmental Laws and You,
LWVEF publication #564, 750).
©1977 League of Women Voters Education Fund
Since passage of these and other pollution
control laws, some progress has been made in
cleaning up the nation's environment. But buy-
ing control equipment and modifying operations
to meet environmental standards means con-
siderable financial investment by industry and
government. Although it is too early to know the
full effect of these costs on employment, there is
information that sheds light on the effects so far
and makes possible some projections for the
future.
Some jobs are affected
Both supporters and opponents of environmen-
tal controls agree that some jobs will be af-
fected. In recent years when plants have shut
down or curtailed operation, owners in some
instances have attributed the decision, in whole
or in part, to the costs of compliance. Is it possi-
ble to get at the facts behind such assertions?
hi 1971, EPA set out to do so by creating an
Economic Dislocation Early Warning System
(EDEWS) that collects information on actual in-
dustrial plant closings or cuts in operation and
keeps track of jobs that may be affected in plants
in danger of closing. EPA gets this information
from the enforcement agencies and, whenever it
can, from the companies themselves. By intera-
gency agreement, when the EDEWS identifies a
plant that may have to lay off employees, the
proper regional office of the Department of
Labor (DOL) is notified. This office then asses-
ses the situation, to determine whether job
search assistance or job training programs are
needed in addition to unemployment compensa-
tion.
As of September 1976, EDEWS had tracked
closings or production curtailments in 90 plants,
resulting in the dislocation of 19,508 employees.
(It should be pointed out that this figure is small
when compared to the more than 88 million
working Americans.) In each of the cases re-
corded by EDEWS, environmental regulations
were said to have played a significant part in
management's decision to cut back. But in al-
most every case, other factors, such as declining
profitability, also contributed to the decision.
In addition to these closings, 25 more plants
may close, affecting another 30,732 employees.
But, may is a significant word: the EDEWS staff
says that so far two out of three threatened
plants have resolved compliance difficulties and
continue to operate. Though EPAs warning sys-
tem does not pick up all instances of environ-
mentally related job losses, the staff estimates
that their data represent the most significant
-------
closures. Because so much staff time would be required, EPA
makes no attempt to locate closings involving fewer than 25
persons.
Relatively few plants, then, have closed because of pollu-
tion abatement requirements, and even in these cases, not all
employees lose their jobs. Many find employment elsewhere
in the company. DOL follow-up efforts reveal that this reem-
ployment rate is approximately 40 percent. For example, the
Ohio Power Company, facing pollution abatement costs esti-
mated at $20 million for one of two power plants in Brilliant,
Ohio, shut down one facility and expanded capacity at the
other. Of the 210 employees from the closed plant 85 will
work in the expanded facility Yet, the 210 figure remains in
EPAs job-loss tally
On the other hand, sometimes when a new facility is built
to replace an older one shutting down, the newer plant may
use more sophisticated equipment and therefore require
fewer employees.
Is pollution control the cause?
It requires a very close reading to determine exactly what
part the added cost for pollution abatement plays in a com-
pany's decision to close or cut back operation. A plant that
doesn't pass muster on pollution control is often facing dif-
ficulties on other scores as well. A review of plant closings
reported by the EDEWS shows that declining profitability,
increased operating costs and obsolescing equipment fre-
quently underlie the decision. Two examples:
O The Rockwell Internationa] Corporation closed an au-
tomobile bumper manufacturing plant in Newton Falls, Ohio
that employed 920 people. A declining demand for large
automobile bumpers, a trend in auto companies to make
bumpers in-house, and high costs to meet water standards
all brought about the decision.
D The Packaging Corporation of America closed a plant in
Berkeley, California that had employed 103 people in the
manufacture of egg cartons from recycled paper. The plant
was marginally profitable, and the parent company had con-
sidered closing it down for some time. Rising waste treat-
ment costs tipped the balance.
A Department of Commerce sample survey of plant clos-
ings produced similar findings. Representatives from three
out of four plants surveyed cited at least one factor besides
pollution control costs which added to the decision to shut
down; almost half cited two additional factors.
According to the 1975 draft study of the National Commis-
sion on Water Quality (NCWQ), "Water pollution controls are
one of many factors forcing industry toward greater capital
intensity, economies of scale, and modernization."
The impacts are uneven
Although the number of job losses that can be linked to
pollution control is relatively small, the impact of these losses
or dislocations is magnified when a closed plant has been a
large employer in a community or when many plants close in
the same geographical area. The problem is compounded
when the area is already experiencing high unemployment.
And, of course, an individual who loses a job and has diffi-
culty finding another may suffer badly. The chart shows the
breakdown of plant closings by 'federal regions. Region V
including Indiana, Illinois and Ohio, and Region II, including
New York and New Jersey account for over half the total
19,058 dislocations reported by the EDEWS.
According to data compiled by the NCWQ, the Northeast
will be the region hardest hit by job losses related to water
pollution control. The NCWQ cited six industries with a high
number of "endangered" plants (plants with particularly
high abatement costs); pulp and paper, textiles, petroleum
refining, electroplating, iron and steel, and nonferrous met-
als. From 1967 to 1974 the Northeast had 24.5 percent of the
total employment in these industries and over half of the
employment loss due to environmentally related plant clo-
sures. Heaviest impacts were in New York, New Jersey and
Connecticut.
Finding new jobs in neighboring plants has become more
difficult for affected employees, since overall manufacturing
employment in New England and the mid-Atlantic states has
been on the decline. Between 1969 and 1973, manufacturing
employment in New England dropped by 135,000 and in the
mid-Atlantic states by 410,000. When these job losses are set
alongside the less than 20,000 related to pollution control, it
Jobs affected—actual and (threatened)
closings where pollution control costs
were alleged to be a factor1 2
January 1971 thru September 1976
\Jobs
Regions \
I
II
in
IV
V
VI
VII
Vffl
IX
X
Total:
Actual
(Threatened)
Grand
Total
Percent
Primary Metal
Industries
44
"l66~
"947
670
(24,250)
1,440
70
1,138
(1,310)
4,470
(25,560)
30.030
60
Food and
Kindred Products
252
105
(204)
165
200
(25)
(165)
190
912
(394)
1,306
3
Chemicals and
Allied Products
1,505
610
(38)_
2,230
(435)
(400)
4,345
(873)
5,218
10
Paper and
Allied Products
1.677
21?"
500
103
833
3,330
3,330
7
Stone, Clay, Glass
& Concrete Prods.
228)
148
358
228)
586
1
Fabricated
Metal Products
30
750
30
83
893
893
2
1
O
700
(74)
924
1,021
TO
1,560
3,100
35
510
4,750
3,677
8.427
17
Totals
730
(74)
5,152
1,932
(745)
1,159
5,335
28,013)
1,440
(400)
270
(25)
1,424
[1,475)
1,616
19,058
30,732)
49,790
100
Notes:
1. Economic dislocation information is compiled and reported by the
EPA Regional Offices
2. Dislocations involving less than 25 jobs are NOT reported.
3. "Other industries" includes all dislocations where the combined
"Actual" and "Threatened" plants amount to less than five.
Source; U.S. EPA
-------
is apparent that other factors eliminate far more jobs than do
pollution control costs.
In two cases, local impacts of potential shutdowns have
been widely publicized — steel plants in Ohio's Mahoning
Valley, and the Reserve Mining Company in Minnesota.
The Mahoning Valley
In 1973, several steel plants in the Mahoning Valley em-
ployed 24,000 people, and accounted for 15 percent of total
employment and 20 percent of total payroll in a two-county
area. The plants—owned by U.S. Steel, Republic Steel, and
the Youngstown Sheet and Tube Company — had trouble
meeting both federal and state air and water standards. Air
quality in the valley was violating national standards for
particulates, and the plants themselves were failing to meet
emissions limitations set by the state. But water cleanup was
the biggest problem, since the plants were dumping signifi-
cant quantities of cyanides, oil, heavy metals, phenols and
ammonia daily into the Mahoning River, a source of drinking
water for the downstream community of Beaver Falls, Pa,
EPA, foreseeing economic problems in the Mahoning Val-
ley when setting effluent guidelines for the steel industry, in
1974 commissioned a study of the probable effects in the
valley. The study found that a number of factors made the
steel plants already marginally profitable before pollution
control costs were added: distance from raw materials and
markets, age and size of production facilities, and type of
technology used. Since costs for pollution abatement would
be still another drain on low-profit operations, they could be
cited as contributing to any decision to curtail production.
Moreover, this was not the first time that the Mahoning
plants had been cited for dangerous pollution levels. The
plants had been put on compliance schedules under earlier
federal water legislation, but the companies had made no
significant progress toward improvement.
Although it was impossible to know what the companies
would do this time, the EPA study did make some predic-
tions. The U.S. Steel facilities, employing 6,500 people,
would be most likely to shut down for purely financial rea-
sons. The plants accounted for only 5 percent of U. S. Steel's
total production and the company would still be in a rela-
tively good position to meet market demands. The Republic
and Youngstown plants, however, produced 25 percent and
45 percent respectively of those companies' output, so man-
agement would be more likely to make every effort to stay in
operation. But both might have trouble raising capital.
EPA concluded that the Mahoning Valley might suffer
greater economic setbacks due tp environmental regulations
than any other area of the country. Since PL 92-500 specified
that regulations could be relaxed if the EPA Administrator
deemed that recourse appropriate, in 1976 EPA did just that.
EPAs ruling exempts the plants from meeting the 1977
industry-wide interim requirements for water cleanup and
allows them to continue current practices until 1983. But the
1983 requirements remain in effect. Individually, the plants
may apply for further relief under PL 92-500. (EPA specified
that, in all cases, Pennsylvania's water quality standards —
except water temperature standards — must be met by
1983.) Although costs for air and water pollution control
were roughly the same, cleaning up the air is EPAs priority,
so the agency allowed no relaxation of air standards.
Environmentalists have warned that granting relief to
these plants allows a serious health threat in the Mahoning
Valley to continue. Furthermore, they fear that these excep-
tions for economic reasons set a dangerous precedent and
encourage other polluting plants to apply for similar relief.
The Sierra Club, as well as the State of Pennsylvania, has
filed suit against EPA in an effort to overturn the decision.
1b date, compliance with existing environmental stand-
ards in the Mahoning Valley has been slow. Primary air
standards for particulates and sulfur dioxides are still being
violated, almost two years after the original deadline set by
the Clean Air Act.
The case of Reserve Mining
For several years, the Reserve Mining Company, located in
northern Minnesota, has been seeking relief from having to
meet water standards. The company, which mines taconite
and makes taconite pellets for use in steel manufacture, has
threatened to close down if forced to comply with cleanup
procedures specified by the state pollution control agency.
The company employs some 3,300 people, approximately 80
percent of the work force in Silver Bay, Minnesota and neigh-
boring towns.
For the last 20 years. Reserve, owned jointly by the Repub-
lic and Armco steel companies, has been dumping 67,000
tons of taconite tailings daily into Lake Superior. The lake
supplies drinking water for shore communities, including
Duluth. Fibers found in this drinking water are similar to
those known to cause cancer when breathed by asbestos
workers.
After long court battles. Reserve is now under a federal
court order to stop dumping in Lake Superior by July 1977
and to locate a land disposal site. Now the fight is over the
choice of a site acceptable to the company, the federal EPA
and the Minnesota Pollution Control Agency (MPCA). To
keep transport costs low, the company has chosen a site
seven miles from the plant. But a hearing officer for the
MPCA and the State Department of Natural Resources found
that, among cither problems, use of this site would allow a
significant amount of taconite dust to blow into the lake.
Therefore, the MPCA did not approve use of the company-
selected site and instead recommended a location 20 miles
from the plant. Reserve argues that the high costs of using
this site would force them to shut down the plant.
hi February 1977, a Minnesota state court ordered the
MPCA to allow Reserve to use the seven-mile site. In the
decision the judges cited the economic hardships that would
ensue if Reserve were to shut down. This decision will prob-
ably be appealed to the state supreme court. While the battle
to find a disposal site continues. Reserve Mining continues to
dump tailings into Lake Superior. Could Republic and Armco
afford the costs of environmental cleanup without taking
drastic measures? According to an editorial of July 19,1976
by the Washington Post, "Reserve... is not a marginal, small
business and under pressure has proven ability to invest
money in cleaning up."
Claims of environmental
blackmail
Environmentalists and some labor union members believe
that industry has over-reacted to environmental regulation.
They claim that industry irresponsibly threatens massive
layoffs in attempts to avoid the expense of meeting environ-
mental standards. They accuse industries of using environ-
mental regulations as a scapegoat for other problems, such
as declining profitability
For example, in 1974 when the Department of Labor is-
sued a new standard for vinyl chloride, a known carcinogen,
chemical manufacturers protested that compliance would be
impossible. But in a December 28, 1975 New York Times
-------
Pollution abatement efforts have created jobs in several
ways:
d through development of a pollution control equipment
industry
D through establishment of federal, state and local en-
vironmental agencies and public interest environmental
groups,
D in the operations and maintenance of control equipment,
LJ through the construction of sewage treatment plants, and
Q in the pollution control-related jobs of lawyers, designers,
planners, engineers and researchers.
A Bureau of Labor Statistics (BLS) study (based on 1970
data) to determine how many jobs were created by federal
outlays for pollution control shows that each billion dollars
spent on research and development programs created 76-
,700 jobs; on abatement and control programs, 78,400 jobs;
on radiation programs, 84,100 jobs; and on wastewater
treatment plant construction, 53,600 jobs. On average, 66-
,900 jobs were created for each billion dollars spent for
pollution control.
EPAs figures for construction grant employment are not as
high as those of BLS. In 1976, 46,005 people were employed
on-site in federally funded projects for the construction of
wastewater treatment plants. EPAs latest data show that
15,000 person-years of on-site employment and 19,500
person-years of off-site employment (suppliers, planners,
transporters) are generated from each $1 billion. Still more
jobs are created by the stimulus of the spending generated
by this investment—for wages, profit, interest and rent.
And some of these jobs are created where they are most
needed. Though the construction industry accounts for only
about 5 percent of the U.S. workforce, it has approximately
9-12 percent of all unemployed workers in the country. At
times, unemployment in this industry has been double the
national average. Federal Regions II and III are areas of
particularly high construction-industry unemployment. As
of July 1976, Federal Regions II, III and V (including New
York and New Jersey, the mid-Atlantic states and the Great
Lakes area, respectively) had over half of the jobs in sewage
treatment construction.
New jobs in wastewater treatment cannot be created
overnight. Before funding can be accelerated, more trained
EPA personnel are needed to monitor the construction
grants. And once a project is started, it takes about three
years to move from planning to actual building.
In the pollution control industry
CEQ has called the pollution control industry, with over 600
manufacturing firms, "one of the relatively few areas of job
strength during the recent recession." A CEQ study esti-
mated that employment in pollution control as a result of
government and private spending reached 1.1 million. (This
number was arrived at by rounding off the BLS figure of
66,900 jobs/billion to 70,000 and multiplying that by $15.7
billion, the approximate pollution control expenditures for
1975.) The figure has been attacked by the Department of
Commerce as being too high. But while admitting it is a
rough estimate, CEQ says it can be crosschecked by another
means of measurement. Since one percent of the GNP goes
for pollution control, these dollars should mean jobs for one
Printed on paper recycled from 100% consumer scrap.
percent of the labor force—about 1 million people. Of course,
these are not all new jobs. Some of these people would have
been employed anyway in other fields. CEQ figured that in
1976 pollution control programs provided jobs for 400,000
people who would otherwise have been unemployed.
Industry can benefit
Abatement measures need not all be set on the expense side
of a company's ledger. Sometimes industry saves through
pollution control. The Department of Commerce and EPA
have sponsored several conferences to discuss some of in-
dustry's innovative approaches. According to former Com-
merce Secretary Elliot Richardson, "It has been the recent
experience of some firms that elimination of pollution at the
source prevents the need for costly cleanup operations later,
and results in substantial dollar and resource savings." A
few examples:
O The 3M Corporation set up 19 projects under a Pollution
Prevention Pays program that now eliminates a total of
73,000 tons of air pollutants and 500 million gallons of
polluted waste annually. These projects should bring savings
of $11 million over the next few years.
D Seven pollution control projects installed by Dow Chemi-
cal Company's latex plants at a capital cost of approximately
$2 million are expected to cut operating costs by almost that
much each year.
O A $2.7 million capital investment by Dow Corning for
equipment to recover chlorine and hydrogen previously lost
to the atmosphere cut operating costs by $900,000 a year.
D A Gold Kist poultry plant modified operations to reduce
water use by 32 percent and reduce wastes by 66 percent. It
saved $2.33 for every dollar spent on the modification.
In conclusion
In 1974, the Congressional Joint Committee on Economics
undertook an emergency study to help it recommend legisla-
tion to improve the economy. Among many other pos-
sibilities, the study considered the value of relaxing en-
vironmental standards but concluded:
"There should be no general relaxation of environmental
standards for the sake of reducing inflationary pressures
because: (1) the benefits of this investment clearly exceed
the costs, (2) their contribution to inflation has been and will
continue to be minimal, (3) delays will only increase the
ultimate cost of environmental cleanup, and (4) the stimula-
tive effect of these expenditures on employment in the near
future will be beneficial to the economy. Relaxation of any
individual standard should occur only when economic
analysis has clearly indicated an unfavorable cost-benefit
ratio or severely adverse economic consequences."
Although some industry representatives have called for
the delay of environmental goals, the American public still
supports cleaning up on schedule. For example, in a January
1977 poll conducted by the Opinion Research Corporation,
68 percent said they wanted pollution control programs to
continue, even if it meant higher prices. It is true that some
jobs have been lost, with costs for pollution partly to blame,
but this number is small when compared to the number of
jobs ended for other reasons. And the long-term, nationwide
benefits of environmental improvement, both in dollars and
in such intangibles as reducing health hazards and Improv-
ing the quality of life, outweigh the dislocations.
Researched and written by Gail Allison, Staff Specialist, Environmental Quality Department, LWVEE
Order from League of Women Voters of the United States, 1730 M Street, N.W., Washington, D. C. 20036. Pub No. 400, 40?
-------
article, Steven Ratner wrote, "They offered dire warnings of
plant closings, job losses, price increases, and massive eco-
nomic dislocation But one year later not one of the dooms-
day predictions has proved accurate."
According to Leonard Woodcock, President of the United
Auto Workers of America:
"The idea that businesses will be driven to bankruptcy and
massive numbers of jobs will be lost if strict safety and
environmental standards are adopted is the same tired line
that has been brought up again and again by companies
down through the years. They tried that argument when
child labor was eliminated, when the minimum wage was
introduced, when Social Security and Unemployment Insur-
ance were developed. ... We share the opinion of Senator
Mustte that the industry has been trying to use the liveli-
hoods of hundreds of thousands of workers as a huge bar-
gaining chip hi this struggle with the government."
Several unions have made proposals to Congress that
would prevent "environmental blackmail." One suggestion
is that employees whose jobs are threatened be given the
right to ask for a public hearing, at which EPA could sub-
poena, corporate records to help determine what the actual
impacts of environmental regulations would be. The United
Steelworkers of America has proposed that civil or criminal
penalties be set if jobs are threatened without basis in fact.
A look at the economics
The employment impacts of environmental programs are
dependent on bow much it costs to control pollution and how
well individual industries and the economy as a whole are
able to bear these costs.
hi 1974 the Ford administration began a practice aimed
at gauging in advance the full effects of a new regulation on
the economy. It requires federal agencies to submit to the
Council on Wage and Price Stability an economic impact
statement covering prices, balance of trade, and community
effects (including jobs). The agency could modify a proposed
regulation, if necessary, in light of this statement. President
Carter is expected to continue ttusypolicy.
Critics, often from organized labor, mistrust this proce-
dure. They believe that the economic Impact statements can
be used to delay further the issuance of regulations, particu-
larly badly needed safety and health standards. They charge
that although the statements do a thorough, often exagger-
ated job of quantifying costs, they dont do nearly as well on
tabulating the benefits of these regulations, which are har-
der and sometimes impossible to put into monetary terms.
For example, what is the dollar value of the health of an
individual worker, or of an entire community?
Analyzing the costs... and benefits
In 1976, the Council on Environmental Quality (CEQ) esti-
mated that the cost of compliance with environmental regu-
lations (air, water, solid waste and noise) will reach $258.8
billion over the 1975-84 period in constant 1978 dollars. This
estimate takes into account coats for new equipment, interest
charges on investment, depreciation of equipment, and
operating and maintenance costs.
Breaking these costs down by sector, CEQ calculates that
government will spend $51.7 billion: industry $156.8 billion
and consumers $50,3 billion. This Ian sum will go largely for
auto emission controls and solid waste management. Con-
sumers will, of course, also pick up most of industry's share
through higher product prices.,CEQ figures that costs per
person for pollution control are now about $82 a year.
Dr. Robert Miki, director of the Commerce Department's
Bureau of Environmental Economics, warns that these cost
projections may be set too low, inasmuch as the full costs of
some regulations, particularly the FWPCAs pollutant dis-
charge limitations, are not yet known. On the other hand, the
United Steelworkers notes that normal modernization costs,
which improve productivity, are often counted in as pollution
control costs.
But cleanup costs are only half the story. CEQ predicts that
pollution control programs will result in a marked net eco-
nomic gain, since the value of reduced damage costs will
outweigh abatement costs. lb illustrate, NCWQ calculated
that measurable economic benefits of clean water will total
$36.4 billion by 1985, primarily through increased values of
property near certain water bodies and through boosts to
commercial and recreational fishing and boating. Benefits
from lessening human health hazards, increasing aesthetic
enjoyment and other nonquantifiable or hard-to-measure
pluses of pollution control were not part of this estimate.
According to the National Academy of Sciences, improved
air quality should bring savings of $15-20 billion per year.
Again, this figure reflects only tangible benefits, such as a
lessening of property damage; no attempt is made to mea-
surable aesthetics or freedom from respiratory illness.
The macroeconomic picture
EPA and CEQ commissioned Chase Econometrics Associates
to study the effect of pollution control spending on the eco-
nomy as a whole. Chase measured the rate of economic
growth, unemployment, investment and inflation over the
1970-83 period, first with and then without pollution control
spending. Historical data were used for 1970-75. showing
what effects actually occurred during this time, and CEQ's
projections were used to predict .effects for 1976-83. The
1976 report labels these effects for the whole 1970-83 period
"noticeable but modest." The report found that with pollu-
tion control spending the following changes would occur:
O Inflation Although pollution control costs would cause
some price increases. Chase found that these were relatively
modest. For example, from 1970 to 1983 pollution spending
should raise the Consumer Price Index an average of O.S'-O.A
percent above what it would have been without such spend-
ing.
n Economic growth During a period of recession, pollution
control investment can make use of labor and resources that
otherwise would not have been utilized, causing an increase
in economic growth. Chase found that this occurred from
1970-76. But higher prices due to pollution control spending
will have a slightly depressing effect on the economy by
1983.
D Unemployment As with economic growth, during a re-
cessionary period pollution control programs can have a
positive effect on employment. Chase figured that the unem-
ployment rate in 1976 was 0.4 percent lower with pollution
abatement spending than it would have been without. But by
1983, as the economy recovers from recession and price
increases linked to pollution control spending have a dam-
pening effect .on growth, unemployment should rise slightly
above the rate it would be in the absence of pollution abate-
ment spending.
D Investment Chase predicted that companies faced with
pollution control costs would tend to cut back somewhat on
other types of plant and equipment expenditures. But they
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figured that other sectors of the economy more susceptible to
interest rates {such as the housing market) would feel the
effects of pollution control spending more than would other
industries.
How will costs affect industry?
As noted earlier, plant closings can be a direct indication of
the effect that pollution control costs have on employment.
But these costs can also affect employment in less direct
ways. By cutting into a company's available capital they may
inhibit capacity expansion or even force an industry to cut
back on production.
Six industries will be paying about three-quarters of total
(air and water) abatement costs to be borne by the private
sector: electric utilities, steel, copper smelting, pulp and
paper, petroleum refining, and the chemicals industry. About
13 percent of 1975 capital investment by these industries
went for pollution control. EPA commissioned a separate
study on each of the six to ascertain what effect pollution
control cost requirements will have, preliminary results of
which appeared in EPAs transition papers for the Carter
administration.
Electric utilities: If certain modifications in requirements are
granted by rate commissions, utilities will be able to finance
pollution control and capacity expansion. If not, existing
capital problems will be further aggravated. To offset control
costs, electricity prices will go up 6.6 percent by 1985.
Steel and copper smelting industries: For both industries, air
pollution requirements have made it hard to find sites for
new plants or to expand old ones. Both have some marginal
plants that may be forced to close and a number of these
plants are large enough to cause significant local economic
impact if they do close down (e.g. the Mahoning Valley).
EPAs study also expresses a significant concern about capac-
ity expansion in these industries.
Pulp and paper and petroleum refineries: These industries
also have a number of marginal facilities and considerable
capital demands. EPA found that enough capital could be
raised and that plant closings could be minimized.
Chemicals: This industry is so diverse that predicting im-
pacts is difficult. Regulations issued under the Toxic Sub-
stances Control Act and the Federal Insecticide, Fungicide
and Rodenticide Act may keep the industry from production
of some chemicals found to be a health threat.
Though these six industries will bear the brunt of total
industry .costs for pollution control, other industries with
many marginal plants or with extremely toxic wastes may be
severely impacted. For example, EPA has predicted that the
electroplating and foundry industries may have serious prob-
lems.
EPAs Early Warning System found that job dislocations
reported thus far have been concentrated in four industries:
primary metals, pulp and paper, chemicals and foods. In the
1971-1976 period these industries accounted for 62 percent
of the actual job dislocations and 68 percent of projected
dislocations.
... and U.S. trade?
Some opponents of pollution control predict adverse effects
on international trade. They warn that the costs of abate-
ment will force price increases that will make American
goods less competitive than before. They further warn that
businesses may relocate in countries where regulations are
less stringent.
But according to Dr. Miki, there is little evidence that
environmental regulations have adversely affected the bal-
ance of trade. Although admitting that data on international
trade and abatement costs are scarce. Dr. Miki states that "in
recent years international monetary affairs, cartel energy
policies, labor cost differentials, materials availability and
costs, and locations' specific characteristics have been con-
siderably more significant than environmental regulations."
Pollution control creates jobs
According to Russell Peterson, former chairman of CEQ:
"We are looking for jobs in America. Thus it is important
that we stimulate activities to create jobs. The clearly ex-
pressed desire of our fellow citizens for clean air, clean water,
less noise, and less waste provides such a stimulus. Enter-
prises that fill these needs can be among the most productive
in our economy, protecting our health and our prosperity.
saving valuable resources and adding aesthetic qualities to
our lives."
Bottle bills and jobs
The jobs-versus-environment debate has heated up in the
controversy over mandatory deposit laws (bottle bills).
These laws, which require deposits or minimum refunds on
beer and soft drink containers (including cans, throwaway
and refillable bottles) are aimed at reducing resource and
energy use, litter and the volume of solid waste headed for
disposal sites. But critics, largely from industry and or-
ganized labor, claim that if sales of cans and throwaway
bottles go down jobs will be lost.
At present, Oregon and Vermont have bottle bills in opera-
tion, and in 1978 similar laws will go into effect in Maine and
Michigan. The Oregon experience can provide useful infor-
mation on job impacts since the law has been in effect there
since 1972. A study by Drs. Gudger and Bailes found that in
Oregon, although 350 jobs were lost in production labor, 575
new jobs were added in warehouse and handling and 140
more in truck driving — making a net gain of 365 jobs.
Another study by Applied Decision Systems (ADS) esti-
mated the net job gain at a lower figure, somewhere between
55 and 116. These figures are lower partly because ADS
found that retailers tended to increase the workload of exist-
ing employees rather than hire new ones.
The Federal Energy Administration (FEA) commissioned
a study of the economic and energy effects of instituting a
mandatory deposit law nationwide. FEA found that by 1982,
without a mandatory deposit law, 369,000 people will be
employed in the manufacture and handling of beverage con-
tainers for a total labor income of $4.1 billion. The capital
requirement for industry will be $7.3 billion. These figures
were compared to two 1982 "scenarios" with a bottle bill in
effect. In the first scenario, can sales remained at 1976 levels
and both cans and bottles were returned at current rates for
rentable bottles. The study predicted a net job increase of
118,000 and an $879 million hike in labor income, with a
slight reduction of salary per employee. Industry's capital
requirements would increase by $824 million. In the second
scenario, both can sales and average return rates were de-
creased to one-half of the 1976 levels. The study predicted
for this situation a net job gain of 117,000 with an increase in
labor income of $936 million. Industry's capital requirements
would go up $2 billion.
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I AM PLEASED TO BE HERE TODAY TO TESTIFY IN SUPPORT
OF FEDERAL BEVERAGE CONTAINER DEPOSIT LEGISLATION. AFTER
MAKING SOME GENERAL COMMENTS AND OBSERVATIONS ON THE NEED
FOR THIS LEGISLATION, I WILL OUTLINE THE EXPERIENCE WHICH
WE IN VERMONT HAVE HAD WITH A STATE STATUTE SINCE ITS
ENACTMENT IN 1975.
As YOU MAY KNOW, VERMONT AND OREGON WERE LEADERS IN
ENACTING A RETURNABLE BEVERAGE CONTAINER LAW. SlNCE THEN,
MAINE AND MICHIGAN HAVE ENACTED SIMILAR STATUTES, AND SOUTH
DAKOTA LEGISLATION is SCHEDULED TO TAKE EFFECT IN 1978.
SENATOR HATFIELD'S BILL S.276, THE BEVERAGE CONTAINER RE-USE
AND RECYCLING ACT OF 1977, ALREADY HAS NUMEROUS CO-SPONSORS,
INCLUDING MYSELF. SOME OF YOU MAY REMEMBER OUR EFFORTS IN
THE SENATE LED BY SENATOR HATFIELD TO ATTACH S.276 AS AN
AMENDMENT TO THE RESOURCE RECOVERY ACT. UNFORTUNATELY, WE
WERE UNSUCCESSFUL, BUT A STUDY REQUIREMENT WAS INCLUDED IN THE
BILL WHICH IS LARGELY RESPONSIBLE FOR THIS PUBLIC HEARING
TODAY.
ENACTMENT OF JHIS.GR SIMILAR LEGISLATJON.SHOUL-D BE AN
INTEGRAL COMPONENT OF ANY NATIONAL ENERGY PROGRAM WE FASHION
DURING THE 95TH CONGRESS.
HOW CAN WE SAY WE ARE SERIOUS ABOUT ENERGY CONSERVATION
IF WE ENCOURAGE PROLIFERATION OF THROWAWAY BEVERAGE CONTAINERS
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- 2 -
AND WITH IT, THE KIND OF THROWAWAY LIFESTYLE THAT PLACES
A HEAVY AND UNNECESSARY BURDEN ON OUR LIMITED ENERGY RESOURCES?
IT IS INTERESTING TO NOTE THAT IN I960, WE DRANK 95
PERCENT OF OUR SODA POP AND 50 PERCENT OF OUR PACKAGED BEERS
FROM REFILLABLE CONTAINERS. TODAY, NEARLY 80 PERCENT OF
THE PACKAGED BEER AND TWO OUT OF THREE SOFT DRINKS ARE CONSUMED
IN NO-DEPOSIT, NO-RETURN BOTTLES. As A RESULT, WE ARE NOW
USING 60 BILLION BEVERAGE THROWAWAYS ANNUALLY, WHICH ADD
SOME NINE MILLION TONS OF TRASH TO OUR NATIONAL GARBAGE.
THIS 20-YEAR SHIFT FROM THE USE OF REFILLABLE CONTAINERS
FOR DISTRIBUTING BEVERAGES TO A ONE-WAY SYSTEM HAS CREATED
A NUMBER OF PROBLEMS, AND I SEE SIGNIFICANT CORRECTIVE
BENEFITS ACCRUING FROM NATIONAL BOTTLE LEGISLATION:
1. IT WOULD RESULT IN A SIGNIFICANT REDUCTION OF
LITTER.
BEVERAGE CONTAINERS ACCOUNT FOR ALMOST 25 PERCENT
BY NUMBER AND 62 PERCENT BY VOLUME, OF ALL LITTER AND THEIR
SIZE AND VISABILITY MAKE THEM PARTICULARLY NOTICEABLE.
BEVERAGE CONTAINERS COMPRISE A RAPIDLY GROWING—AND EXPENSIVE--
SEGMENT—OF MUNI£U?AL--.WASTE,-WITH_AN ESTIMATED_ GROWTH RATE OF
10 PERCENT PER YEAR BETWEEN 1962 AND 1972. THE BUREAU OF
THE CENSUS HAS REPORTED THAT LITTER CONTROL TAKES THE LARGEST
SHARE OF STATE SOLID WASTE MANAGEMENT BUDGETS. ACCORDING TO
ONE ESTIMATE, IF 90 PERCENT OF THE CONTAINERS BEARING A
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- 3
DEPOSIT WERE RETURNED FOR REFILLING OR RECYCLING, THERE WOULD
BE A REDUCTION OF 70 TO 75 PERCENT IN BEVERAGE CONTAINER
WASTE, OR 5 TO 6 MILLION TONS ON A NATIONAL BASIS. WlTH AN
8 PERCENT CURRENT GROWTH RATE, BEVERAGE CONTAINERS CURRENTLY
COMPRISE ABOUT 7 PERCENT OF MUNICIPAL SOLID WASTE. THE
TOTAL NUMBER OF NON-REFILLABLE BOTTLES AND CANS USED FOR BEER
AND SOFT DRINKS IS EXPECTED TO DOUBLE BY 1985. NATIONAL
BOTTLE LEGISLATION WOULD ADDRESS THIS ISSUE BY RESTORING THE
ECONOMIC INCENTIVE FOR INDIVIDUALS TO COLLECT AND RETURN
CONTAINERS, JUST AS AJ1KIDE, I HAVE KNOWN YOUNGSTERS IN
VERMONT TO SPEND SEVERAL HOURS OF A WEEKEND RIDING DOWN THE
HIGHWAY TO SEE HOW MANY CONTAINERS THEY CAN PICK UP TO OBTAIN
THE REFUND.
2. IT WOULD RESULT IN A REDUCTION IN MUNICIPAL WASTE
PROCESSING COST
MANY SOLID WASTE COLLECTION AND DISPOSAL SERVICES
ARE NOT BILLED IN PROPORTION TO THE AMOUNT OF WASTE GENERATED.
THE SHIFT TO THROWAWAYS HAS SIGNIFICANTLY INCREASED THE SOLID
WASTE BURDEN WITHOUT PAYING THE ADDITIONAL COSTS. A NATIONAL
DEPOSIT SYSTEM WOULD DIVERT ALMOST ALL BEVERAGE CONTAINERS
FROM wuN^c^pA^ WASTE INTO REUSE OR RECYCLING-PROGRAMS.
3. IT WOULD RESULT IN A REDUCTION IN CONSUMER COSTS
IN 1972, THE PRESIDENT OF COCA-COLA, U.S.A. TOLD
CONGRESS THAT COKE SOLD IN FOOD STORES IN NON-RETURNABLE
PACKAGES IS PRICED, ON THE AVERAGE, 30 TO 40 PERCENT HIGHER
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- 4 -
THAN IN RETURNABLE BOTTLES, THE PEPSI-COLA FRANCHISER IN
PORTLAND, OREGON, ESTIMATES THAT USING REFILLABLE BOTTLES
REDUCES THE CONTAINER COST PER FILLING TO LESS THAN A PENNY,
COMPARED TO FOUR TO SEVEN CENTS FOR THROWAWAYS. A 1971
UNIVERSITY OF ILLINOIS STUDY CONCLUDED THAT CHANGING FROM
THROWAWAYS TO REF1LLABLES WOULD SAVE CONSUMERS ABOUT $1.4
BILLION ANNUALLY. SlNCE BEER AND SOFT DRINKS SOLD IN REFILLABLE
CONTAINERS ARE GENERALLY CHEAPER TO THE CONSUMER THAN BEVERAGES
SOLD IN ONE-WAY CONTAINERS, MANDATORY DEPOSIT LEGISLATION
SHOULD RESULT IN A DECLINE IN BEER AND SOFT DRINK PRICES TO
THE EXTENT THAT THE LEGISLATION INDUCES A SHIFT TO REFILLABLE
BOTTLES.
4 . IT WOULD RESULT IN ENERGY _SAVI NGj_
BEVERAGE CONTAINERS THAT ARE REFILLED OR RECYCLED
SAVE ENERGY AND MATERIALS. A GLASS BEVERAGE CONTAINER USED
,10 TIMES CONSUMES LESS THAN ONE-THIRD OF THE ENERGY OF NON-
USABLE CONTAINERS. ALUMINUM AND ALL-STEEL CANS THAT ARE
RECYCLED SAVE 78 AND 39 PERCENT, RESPECTIVELY, OF THE ENERGY
REQUIRED TO MANUFACTURE A CAN FROM VIRGIN RAW MATERIALS.
VllTH A BOTTLE LAW, APPROXIMATELY 200 TRILLION BTU'S COULD BE
SAVED ANNUALLY, WHICH IS EQUIVALENT TO THE ENERGY CONTENT
OF 39 MILLION BARRELS OF OIL.
5 . IT WOULD SIGNIFICANTLY REDUCE AIR POLLUTION FROM
ACCORDING TO EPA, A SYSTEM USING ONE REFILLABLE
BOTTLE THAT WILL MAKE TEN ROUND TRIPS CREATES LESS THAN HALF
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- 5 -
THE AIR POLLUTING EMISSIONS OF A SYSTEM USING TEN SINGLE-USE
CANS OR TEN ONE-WAY BOTTLES. ALSO, A SYSTEM USING REFILLABLE
CONTAINERS IS ALMOST FOUR TIMES AS EFFICIENT IN HOLDING DOWN
INDUSTRIAL WASTES.
I WOULD NOW LIKE TO MOVE TO OUR EXPERIENCE IN VERMONT,
AND SUMMARIZE THAT BRIEFLY.
THE VERMONT STATUTE REQUIRES A S-CENT DEPOSIT ON ALL
'CONTAINERS FOR MALT BEVERAGES, MINERAL WATERS, AND CARBONATED
SOFT DRINKS. As OF JANUARY 1 OF THIS YEAR, IT ALSO BANS
. PULL-TABS, THROWAWAY BOTTLES, AND PLASTIC RINGS AND OTHER
NON-BIODEGRADABLE CARRYING DEVISES. BOTTLES MUST BE CERTIFIED
AS CAPABLE OF BEING REFILLED FIVE TIMES.
I AM HAPPY TO REPORT THAT OUR EXPERIENCE WITH THE
STATUTE HAS BEEN EXTREMELY POSITIVE.
LITTER HAS BEEN GREATLY REDUCED - AFTER THE LAW HAD BEEN
IN EFFECT FOR ONE YEAR, THE VERMONT HIGHWAY DEPARTMENT
REPORTED THAT ROADSIDE LITTER HAD BEEN REDUCED BY 76 PERCENT,
AND THAT ALL LITTER HAD DECLINED BY 33 PERCENT. A 50 PERCENT
REDUCTION IN STATE EMPLOYEE MAN-HOURS DEVOTED TO LITTER
PICKUP WAS ALSO REPORTED.
CONSUMERS HAVE EXPERIENCED SAVINGS - PRICES THAT
CONSUMERS PAY FOR BEVERAGES IN VERMONT HAVE RISEN LESS RAPIDLY
THAN IN NEIGHBORING STATES WHICH DO NOT HAVE DEPOSIT LAWS.
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- 6 -
FOR EXAMPLE, PRIOR TO PASSAGE OF THE LAW, VERMONTERS PAID
AN AVERAGE OF APPROXIMATELY 30 CENTS MORE FOR A SIX PACK OF
BEER THAN DID THEIR NEW HAMPSHIRE NEIGHBORS. THE PRICE OF
SOFT DRINKS WAS ABOUT 5 TO 8 CENTS PER QUART HIGHER IN
VERMONT. SINCE THE LAW'S ENACTMENT, THE PRICE DIFFERENTIAL
IN BEER HAS DECREASED BY 80 PERCENT, TO SIX CENTS, AND
VERMONTERS NOW PAY FIVE CENTS LZS.S. PER QUART FOR SOFT DRINKS
THAN DO THEIR NEW HAMPSHIRE NEIGHBORS.
SIGNIFICANT SAVINGS OF ENERGY AND NATURAL RESOURCES
HAVE RESULTED - VERMONT'S RETURN RATE IS 95 PERCENT. IN
LATE 1975, BEER DISTRIBUTORS BEGAN A PROGRAM OF RECYCLING
ALL ALUMINUM AND GLASS. EARLIER, SOFT DRINK BOTTLERS SHIFTED
TOWARD REF1LLABLE BOTTLES. USING THE FEA FORMULA FOR COMPUTING
ENERGY SAVINGS, THE VERMONT AGENCY OF ENVIRONMENTAL CONSERVATION
ESTIMATED THAT VERMONT'S DEPOSIT LAW CONSERVES APPROXIMATELY
651 BILLION BIOS OF ENERGY ANNUALLY—THE ENERGY EQUIVALENT
OF MORE THAN 4.5 MILLION GALLONS OF NUMBER TWO FUEL OIL.
THE MUNICIPAL WASTE PROBLEM IS BEING EASED - SPACE IN
SANITARY LANDFILLS IS BEING SAVED, WITH DIRECT BENEFIT TO
THE STATE AND JO MUNICIPALITIES.
THE BEVERAGE CONTAINER LAW ALSO ENJOYS A HIGH LEVEL OF
PUBLIC SUPPORT, AS EVIDENCED BY THE 95 PERCENT CONTAINER
RETURN RATE, EVEN THE RETAIL GROCERS, WHO HAD INITIALLY
EXPRESSED ALMOST UNANIMOUS OPPOSITION TO THE LAW, NOW SUPPORT
IT.
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- 7 -
IN CLOSING, I WOULD LIKE TO NOTE THAT NATIONAL DEPOSIT
LEGISLATION ENJOYS AN IMPRESSIVE AMOUNT OF PUBLIC SUPPORT
AS WELL. THE CO.NCEPT HAS BEEN ENDORSED BY U.S. ENVIRONMENTAL.
PROTECTION AGENCY, THE NATIONAL COMMISSION ON SUPPLIES AND
SHORTAGES; THE NATIONAL LEAGUE OF CITIESJ AND THE NATIONAL
ASSOCIATION OF COUNTIES. THIS PAST JULY, INTERIOR SECRETARY
ANDRUS ANNOUNCED THAT ALL AREAS OF THE NATIONAL PARK SYSTEM
THAT SELL BEVERAGES IN CANS OR BOTTLES WERE PUTTING THE
5-CENT REFUNDABLE DEPOSIT INTO EFFECT. THE ONLY EXCEPTIONS
ALLOWED WERE FOR BEVERAGES PURCHASED FOR CONSUMPTION ON THE
PREMISES, AND FOR BEVERAGES PURCHASED FROM CUP'DISPENSING
VENDING MACHINES. A TEST PROGRAM CONDUCTED FROM MAY TO
SEPTEMBER 1976 BY THE DEPARTMENT OF THE INTERIOR AT YOSEMITE
NATIONAL PARK SHOWED THAT 70 PERCENT OF THE CONTAINERS WERE
RETURNED. THIRTY TONS OF RECYCLABLE ALUMINUM, GLASS AND
,STEEL WERE RECOVERED, COMPARED TO 1 TON OF ALUMINUM CANS
RECLAIMED IN PREVIOUS YEARS WHEN CONTAINER RETURN WAS
VOLUNTARY,
I SINCERELY HOPE THAT PRESIDENT CARTER WILL MAKE ENACT-
MENT OF MANDATORY DEPOSIT LEGISLATION A PRIORITY ITEM ON
HIS LEGISLATIVE AGENDA FOR THE 95TH CONGRESS.
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STATEMENT BEFORE THE
RESOURCE CONSERVATION COMMITTEE ON
FEDERAL BEVERAGE CONTAINER DEPOSIT ISSUE
OCTOBER 19, 1977
MR. CHAIRMAN AND MEMBERS OF THE COMMITTEE. I AH JAMES BROVIHELL AND
I HAVE BEEN A MEMBER OF THE BOARD OF SUPERVISORS OF LOUDOUf! COUNTY,
VIRGINIA FOR TEN YEARS. DURING THAT TIME, I CHAIRED THE SPECIAL
CONTAINER COMMITTEE OF THE METROPOLITAN WASHINGTON COUNCIL OF GOVERN-
MENTS AND WENT THROUGH ALL THE DISCUSSIONS AND HEARINGS TO SET UP
GUIDELINES FOR BEVERAGE CONTAINER LEGISLATION FOR THE COG AREA.
THAT WAS IN 1974, TO DATE ONLY FAIRFAX COUNTY ACTUALLY HAS A DEPOSIT
ORDINANCE BEING ENFORCED. LOUDOUN'S ORDINANCE GOES INTO EFFECT ON
JANUARY I, 1978.
TWO DIFFERENT BOARDS OF SUPERVISORS IN LOUDOUN COUNTY HAVE
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PAGE 2
THE DEPOSIT IS THE ONLY WAY TO GET AT THOSE CANS AND BOTTLES
THAT LITTER THE HIGHWAYS AND GET ONTO PRIVATE PROPERTY. WE DON'T
FIND TOMATO JUICE CANS OR COTTAGE CHEESE CONTAINERS ALONG THE ROADS.
LEAVE THEM OUT. WE ARE JUST AFTER THOSE THAT ARE LITTERED.
WE WANT A MINIMUM DEPOSIT, NOT A TAX BECAUSE THE 5 CENTS
DEPOSIT GIVES THE INCENTIVE TO INDIVIDUALS TO PICK UP THESE CONTAINERS
AND ASSURES A HIGH RATE OF RETURN. THIS IS BETTER THAN A TAX TO BE
SPENT BY THE GOVERNMENT IN CLEANING UP THE ROADSIDES AND THEN BURYING
IT IN OUR LANDFILL. OUR PEOPLE HAVE JUST VOTED A BOND ISSUE OF
$300,000 TO EXPAND OUR CURRENT LANDFILL AND WE WANT IT TO LAST.
WE HAVE TRIED ALL THE OTHER APPROACHES TO LITTER CONTROL.
THE REYNOLDS METALS PROGRAM OF RECYCLING GIVES 15 CENTS PER POUND
FOR ALUMINUM. THERE IS NOT ENOUGH VALUE HERE. PEOPLE IVILL NOT PICK
CANS UP AND HAUL THEM TO A PLACE FOR REDEMPTION WHEN THEY ARE PAID
LESS THAN ONE CENT A PIECE. THE PELI-CANS GIVEN BY THE VIRGINIA
BEER WHOLESALERS AND PUT OUT BY THE VIRGINIA DEPARTMENT OF HIGHWAYS
DID NOT WORK AND STAMPING CANS WITH "DON'T LITTER" SLOGANS DOESN'T
WORK EITHER. OUR VOLUNTEERS ARE TIRED OF PICKING UP LITTER WHICH
OUR STUDIES IN LOUDOUN COUNTY SHOW THAT SOME 66 PERCENT OF THE
BOTTLES AND CANS PICKED UP ALONG THE ROADS:OF THIS COUNTY WOULD HAVE
BEEN COVERED BY THE DEPOSIT REQUIREMENT OF THE LOUDOUN COUNTY
ORDINANCE, AND THEN HAVING TO DO IT ALL OVER AGAIN NEXT YEAR DUR-
ING OUR ANNUAL SPRING CLEAN-UP.
WE DO NOT NEED ANOTHER STUDY. THE SUBJECT HAS BEEN STUDIED
TO DEATH ALREADY. THE VIRGINIA GENERAL ASSEMBLY ORDERED A STUDY
UNDER THE LITTER CONTROL ACT OF 1976 BY THE HIGHWAY DEPARTMENT.
THE RESULTS PROVED WHAT WE HAVE BEEN SAYING ALL THE TIME - THAT
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PAGE 3
BEER AND SOFT DRINK CONTAINERS AND FOOD RELATED WRAPPERS AND CON-
TAINERS REPRESENTED THE LARGEST PROPORTION OF LITTER.
FRa*
THESE COMBINED DATA ^INDICATE THAT PEER PRODUCTS (BOTTLES,
CANS, CARTONS) CONSTITUTE THE LARGEST PROPORTION OF LITTER BEING
ABOUT 29 PERCENT BY ITEM COUNT, 41 PERCENT BY HEIGHT AND 27 PERCENT
BY VOLUME.
PROPORTIONS OF RETURNABLE VERSUS NON-RETURNABLE BEER AND
SOFT DRINK BOTTLES ALONG HIGHWAYS^WERE^ "IT WAS FOUND THAT ESSEN-
TIALLY 100 PERCENT OF THE BEER BOTTLES WERE NON-RETURNABLE (ONLY
TWO RETURNABLE BEER BOTTLES WERE FOUND IN ALL THE SAMPLES), AND
85 PERCENT OF THE SOFT DRINK BOTTLES WERE NON-RETURNABLE."
LAST SUMMER THE COUNTY PUT OUT A TEAM OF YOUNG PEOPLE UM^ER
THE YOUTH CORPS PROGRAM OF THE LABOR DEPARTMENT TO CLEAN UP OLD
DUMPS. THEY WENT TO TWENTY-TWO SITES AND HAULED OVF.R 55 TONS OF
TRASH TO THE COUNTY LANDFILL. THE PERCENTAGE OF NON-RETURNABLE
BEVERAGE CONTAINERS IN THE SOLID WASTE FROM THESE ILL0SAL DUMPS
IN SOME CASES RANGED TO AS HIGH AS 80 PERCENT,
YES, WE SHOULD DEVELOP SPECIFIC FEDERAL CONTAINER DEPOSIT
LEGISLATION WHICH SHOULD SUPERSEDE STATE AND LOCAL LAWS WITH NO
COMPENSATION TO THE INDUSTRY. STANDARD NATIONAL LEGISLATION WILL
MAKE IT EASY FOR THE INDUSTRY TO COMPLY. THIS IS OUR OBJECTIVE.
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COMMONWEALTH OF VIRGINIA
COUNTY OF LOUDOUN
OFRCEOFCOur
PHILIPA BOLEN
At a regular meeting of the Board of Supervisors of Loudoun County,
Virginia, held in the Board of Supervisors' Meeting Room, County
Office Building, 18 North King Street, Leesburg, Virginia, on Monday,
October 3, 1977 at 1:00 p.m.
PRESENT: William C. Grossman, Chairman
George H. Yeager, Vice Chairman
Henry C. Stowers
James F. Brownell
Frank Raflo
Ronald W. Blake
Carl F. Henrickson
Gerry Gardner
IN RE: LOUDOUM COUNTY BEVERAGE CONTAINER LITTER CONTROL ORDINANCE
Mr. Henrickson moved approval of the (attached) Ordinance to Provide
Incentive for Certain Beverage Containers to be Disposed of in a
Manner so as not to Litter Public Highways and Other Public Places in
Loudoun County with an effective date of January 1, 1978.
Voting on the motion: Messrs. Henrickson, Grossman, Yeager, Stowers,
Brownell, Raflo, Blake, and Mrs. Gardner - Yes. No - none.
A COPY TESTE:
County Administrator
Loudoun County Board of Supervisors
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Page 2 of 6
AN ORDINANCE TO PROVIDE INCENTIVE FOR CERTAIN BEVERAGE CONTAINERS
TO BE DISPOSED OF IN A MANNER SO AS NOT TO LITTER PUBLIC HIGHWAYS
AND OTHER PUBLIC PLACES IN LOUDOUN COUNTY.
SHORT TITLE
This ordinance may be known and may be cited as the "Loudoun
County Beverage Container Litter Control Ordinance."
PURPOSE
The purpose of this ordinance shall be to promote public
health, safety and welfare by offering monetary incentive to the
general public including the consumers of certain beverages not
to litter or leave littered public highways and other public
places in Loudoun County with the containers in which such
beverages are sold.
DEFINITIONS
(a) "Beverage" means beer or other malt beverages and
carbonated mineral waters, carbonated soda water, carbonated fruit-
flavored drinks or other carbonated soft drinks of any variety, in
liquid form and intended fox human consumption.
(b) "Beverage Container" means the individual, separate
airtight bottle, can or other similar vessel made of glass, metal,
plastic or any combination thereof containing a beverage and of a
capacity not exceeding one quart liquid measure.
(c)~ "County" means the County of Loudoun in Virginia.
(d) "Dealer" means a person engaged in the commercial sale
of beverages in beverage containers at the retail level.
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Page 3 of 6 Loudoun County Beverage Container Litter Control Ordinance
(e) "Distributor" means any person, including any manufacturer,
engaged in the commercial sale of beverages in beverage containers
to one or more dealers.
(f) "Manufacturer" means every person bottling, canning, or
otherwise filling beverage containers for sale to distributors or
dealers.
(g) "Person" means any individual, firm, partnership,
association, corporation, company, organization or entity of
any kind.
(h) "Refillable beverage container" means a beverage container
which is returned for refill with a beverage and resale in the
normal course of business.
REFUND VALUE REQUIRED
Every beverage container in which beverages are sold or offered
for sale in the County by a dealer or distributor shall have a
cash refund value of not less than five cents, provided that no
refillable beverage container shall be required by this ordinance
to have such cash refund value, nor shall any beverage container be
required by this ordinance to have such cash refund value so long as
the State of Virginia, or any Board or Commission of the State of
Virginia, requires that a minimum deposit charge be paid to either
the wholesaler, i.e., the distributor, or the retailer in connection
with the sale by such wholesaler or retailer of any such beverage
container.
ACCEPTANCE FOR REFUND
(a) A dealer shall accept from any person except another dealer,
a distributor or a manufacturer any empty, beverage container on
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Page 4 of 6 Loudoun County Beverage Container Litter Control Ordinance
which a cash refund value is required by this ordinance provided
that such container is of a kind, size and brand of beverage sold
by the dealer at the time of, or which had been sold by said
dealer within thirty days of, the offer by said person to return
said beverage container. Nor shall a dealer refuse to pay in cash
to said person upon the demand thereof, except as provided above,
the refund value established pursuant to this ordinance of such
beverage container, provided that the place to which said person
offers to return said beverage container is the normal point of
sale of such beverage container by said dealer.
(b) A distributor shall not refuse to accept from a dealer
to whom said distributor normally distributes any empty, beverage
container on which a cash refund value is required by this ordinance
provided that such container is of a kind, size and brand of beverage
sold by the distributor at the time of, or which had been sold by
said distributor within thirty days of, the offer by said dealer to
return said beverage container. Nor shall said distributor refuse
to pay in cash to the dealer at the demand of said dealer, except
as provided above, the refund value established pursuant to this
ordinance of such beverage container, provided that said containers
are made available for pick-up by the distributor at the normal
point of delivery by said distributor to said dealer or at any other
place reasonably convenient to said distributor.
BEVERAGE CONTAINER MARKINGS
No distributor or dealer shall sell or offer for sale in this
County after the effective date of this ordinance a beverage in
any beverage container on which a cash refjind value is required
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Page 5 of 6 Loudoun County Beverage Container Litter Control Ordinance
by this ordinance that does not clearly indicate thereon in a
securely affixed manner markings to the effect that:
(1) The beverage container is to be sold within the County
of Loudoun, and
(2) The beverage container is requested to be returned for a
refund of deposit.
PENALTIES FOR VIOLATION
Any person who violates any provision of this Ordinance shall
be deemed guilty of a misdemeanor and upon conviction thereof
before a court of competent jurisdiction, shall be fined in an
amount not exceeding one thousand dollars ($1,000.00) or up to
thirty (30) days confinement in jail or both such fine and such
confinement. Each day that such violation is committed or
permitted to continue shall constitute a separate offense.
SEVERABILITY
The provisions of this ordinance are severable, and if any
provision, sentence, clause, section or part thereof is held
illegal, invalid, or unconstitutional or inapplicable to any person
or circumstances, such illegality, invalidity, unconstitutionality,
or inapplicability shall not affect or impair any of the remaining
provisions, sentences, clauses, sections or parts of this ordinance
or their application to other persons and circumstances. It is
hereby declared to be the legislative intent that this ordinance
would have been adopted if such illegal, invalid, or unconstitutional
provision, sentence, clause, section or part had not been included
therein, and if the person or circumstances to which the ordinance
-------
OCTOBER 19, 1977
TESTIMONY
BY
ROBERT A, SILVAGNI
BEFORE THE
RESOURCE CONSERVATION COMMITTEE
WASHINGTON, D,C,
ii -CHAIRMAN, MEMBERS OF THE^ COMMITTEE, MY NAME is ROBERT SILVAGNI,
I AM THE DIRECTOR OF THE MINNESOTA POLLUTION CONTROL AGENCY'S SOLID
WASTE DIVISION. 1 MANAGE THE PROGRAMS IN RESOURCE RECOVERY, SOURCE
(pflcwxiiK'iR**) ^3.
REDUCTION^\HAZARDOUS WASTES, AND MUNICIPAL AND INDUSTRIAL SOLID WASTE
DISPOSAL FOR THE AGENCY,
THE MINNESOTA POLLUTION CONTROL AGENCY APPRECIATES THIS OPPORTUNITY
TO PRESENT TESTIMONY TODAY CONCERNING FEDERAL LEGISLATION FOR BEVERAGE
CONTAINER DEPOSITS,
IN THIS TESTIMONY, I -WfrSH-TO STRESS TOUR IMPORTANT ASPECTS OF BUS
f39UE D^f^BE-JtlE-CoMWH'Teif. cJlieTAHC AS TOLLO
I do Uo4 PL&OM, ^o- njp2«cf" /nwrv« c&
1. THE MINNESOTA'POLLUTION 'CONTROL AGENCY,"THE MINNESOTA POLLUT
CONTROL AGENCY BOARD AND THE GOVERNOR OF MINNESOTA ALL HAVE
SUPPORTED THE NEED FOR BEVERAGE CONTAINER LEGISLATION, WE
BELIEVE THAT THE PEOPLE OF MINNESOTA CONTINUE TO SUPPORT
THIS KIND OF LEGISLATION, BUT DUE TO INTENSE,INDUSTRY
LOBBYING AGAINST OUR STATE'S CONTAINER DEPOSIT LEGISLATION,
WE HAVE NOT, IN MINNESOTA, SUCCEEDED IN GETTING OUR OWN
-------
TESTIMONY OCTOBER 19, 1977
STATE LEGISLATURE TO PASS SUCH LEGISLATION, HE BELIEVE
THAT A MANDATORY AMD UNIFORM NATIONAL DEPOSIT PROGRAM
PHASED IN OVER AN APPROPRIATE PERIOD WOULD RESULT IN
SIGNIFICANT CONSERVATION OF ENERGY AND MATERIALS.
SUCH LEGISLATION WOULD FURTHER RESULT IN A REDUCTION OF
SOLID WASTE, A REDUCTION IN LITTER, AND FOSTER A NATIONAL
AWARENESS OF THE NECESSITY TO ALLOCATE AND CONSERVE OUR
NATURAL RESOURCES,
2, AT WHATEVER LEVEL—FEDERAL OR STATE—THE REFUNDABLE DEPOSIT
ON BEVERAGE CONTAINERS IS A SIGNIFICANT SOURCE REDUCTION
MEASURF., WE BELIEVE THAT SOURCE REDUCTION IS THE FIRST STEP IN
DEALING WITH OUR EVER-INCREASING SOLID WASTE VOLUME AND CAN BE
ACHIEVED BY THE ELIMINATION OF PLANNED OBSOLESCENSE AND
ENCOURAGEMENT OF THE INCREASED REUSE OF ITEMS, SOME
OPPONENTS OF DEPOSIT LEGISLATION TAKE ANOTHER APPROACH"THAT
OF RESOURCE RECOVERY OR RECYCLING. BUT THIS APPROACH ONLY
SERVES TO PERPETUATE THE PROLIFERATION OF PRODUCTS WHILE
TRYING TO SELL SOCIETY OH RECYCLING,
3, WE WOULD POINT OUT THAT MANDATORY DEPOSIT LAWS—WHETHER
THEY BE FEDERAL OR STATE"HAY BE VIEWED III TWO WAYS, SUCH
LAWS MAY BE CONSIDERED AS REMOVING A-SOLID WASTE DISPOSAL
SUBSIDY PRESENTLY PROVIDED TO THE BEVERAGE INDUSTRY AND
TO THOSE IN OUR SOCIETY WHO PURCHASE THROWAWAY CONTAINERS,
SINCE ALL TAXPAYERS MUST SHARE IN THE COSTS OF SOLID HASTE
COLLL7CTION AND DISPOSAL, RFGAKDl.LSS OF 'IHE QUANTITIES OF
WASTE EACH PRODUCES, A DEPOSIT LAW WOULD MAKE THOSE WHO
2
-------
My name is April Moore. I live in Washington, D.C. and am a
longtime consumer advocate. I am among the 73% of Americans who
favor national deposit legislation (the bottle "bill). Though
usually discussed in environmental terms, the bottle bill is a
critical consumer issue as well for the following reasons:
***An Environmental Protection Agency survey shows soft drinks in
non-refillable containers cost consumers almost 1^ times as much as
soft drinks in refillables.
***Taxpayers will save money with deposit legislation. EPA estimates
8 million tons of beer and soft drink containers were thrown away in
1976, 8.5% of the manufactured goods in the waste stream. Tax
dollars were spent to pick, these up, haul them, and put them into
already overburdened and expensive municipal landfills.
***With a 72% reduction in beverage container litter in Oregon the
year following the enactment of that state's bottle bill, it is
reasonable to expect that a national bill will significantly reduce
litter nationwide, resulting in savings to all taxpayers,
***The Federal Energy Administration estimates that between 80,000
and 118,000 additional jobs will be created if the United States
adopts a national beverage container deposit law.
***FEA also estimates that a return to returnables would save 5*2
million tons of steel and 500,000 tons of aluminum in addition to
energy savings equivalent to 29 million barrels of oil per year—
resources paid for by the taxpayers.
I strongly urge the Resource Conservation Committee to recommend
that President Carter endorse national deposit legislation. Clearly,
most Americans want it.
April D. Moore
1867 California St. NW
Washington, D.C. 20009
-------
The National League of Cities appreciates this opportunity to
conunent on the issues of federal legislation for beverage container
deposits. In general, we commend the Environmental Protection Agency
and the Federal Interagency Resource Conservation Committee for
their initiative in exploring approaches to address the issues of
litter, the disposal of solid waste, and the conservation of re-
sources, and for their commitment to gather public comments and in-
put on the beverage container deposit issue. The National League
of Cities recognizes that programs to curtail manufacturing and pack-
aging practices and to control activities which contribute significantly
to solid waste disposal problems and resource consumption must be
initiated by government and private industry.
With regard to the specific issue of beverage container deposit
legislation, NLC's National Municipal Policy adopted in December, 1976,
reads as follows:
Federal regulatory source reduction measures, including
the establishment of federal packaging standards and a ban
on the sale of no-deposit, no-return beverage containers
should be coupled with a mandatory deposit of sufficient
value to encourage the return of containers to proper
distribution points.
However, prior to NLC's full support for beverage container deposit
legislation, we urge this committee to recommend that a thorough
examination of the relative costs and benefits of the various al-
ternatives be conducted, particularly as the alternatives relate
to local jobs. While it may be argued that the overall effect of
beverage container legislation may be a long-term net increase
in the number of jobs, it is NLC's concern that protection against
loss of jobs in cities in which bottling plants and container
manufacturers are located not be overlooked.
-------
Page Two
In accordance with this committee's intention to explore al-
ternative solutions, NLC could support a system of disposal charges
with recycling credits, including limited and temporary tax in-
centives at the national and state level to encourage the recycling
of solid waste materials.
In sum, the National League of Cities applauds this committee's
efforts to address the problems of litter, solid waste, and resource
use. It is NLC's hope that the means to this end will be determined
on the basis of the acceptability, appropriateness, and benefits to
local communities and the nation as a whole.
Thank you for your time.
-------
STATUTE;?! OF WILLIAM M. LA1IDES Ai;3 ?:v:
SUBMITTED TO THE RESOURCE CONEHHVATi:
OCTOBER 19, 1977, CC::CE?.HIMG 3""?-:.
CONTAINER LEGISLAT:;:;
We are, respectively, an economist and a lavyer-e
University of Chicago Lav School who have taught ani v
with regard to the application of ecor.or.ics to ^u-li-
curricula vitae are attached.
At the request of the Ijatipnal Sp.ft__Drink^^Asj zzi*
analyzed, from the standpoint of sound economic poll;;-
federal legislation restricting "beverage containers.
ment will not attempt to answer seriatim the questicr.s
Committee's September 27 notice of public hearing, i~
of the issues raised by those questions.
The avowed purpose of container legislation is --
position of beverage containers toward returnable "c"t
from nonreturnable bottles and from cans. Whether tr.i
duct charges, mandatory deposits, or other measures, t
to alter profoundly the vay in which beverages are scl
The issue that has received the most attention vith :*=
legislation is the effect on production, including '.'•:.--.
undesired by-products of container manufacture ana '-,'-:
and litter. This issue is of course an important -r,=
in our statement. Another issue is equally imports.:.~
neglected in discussions of the beverage container r.r:
cost to the consumer of governmental policies desi = r.-e:
composition of beverage containers. Ve believe, r.r.-i -,
demonstrate in the first part of this statement, t>.v.
:cr.oriist at the
'i.tten extensively
: 7li^y. Our
: lor., we have
. "'r** merits of
-.ItV.ough our state-
s.r.Bended to the
•rill address all
shift the com-
Les and away
= is done by pro-
r.e result would be
i tc the consumer.
^ari to proposed
production of
, such as garbage
s.r:;l will be addressed
sr.i characteristically
clsr.. That is the
*o change the
ill att ompt t o
*he growth of
-------
returnable bottle includes both the store price (net of the deposit)
and the costs associated with the return of the bottles. These latter
costs include, among others, the value of the consumer's tine, direct
costs (e.g., gasoline), the costs of storage during the interval between
consumption and return, and inconvenience costs (e.g., the extra weight
of returnable bottles and breakage problems). Because consumers attach
different costs to the return of a bottle, the full price of a returnable
will vary among consumers. In general, we expect that consumers placing
a relatively low value on the return process will opt for returnables
while those placing relatively high values on this process will choose
nonreturnables. Put differently, although the store price of a returnable
(net of deposit) is less than that of a nonreturnable, the full price of
the former will be greater than the latter, provided the costs associated
with returning the bottle are sufficiently large.
The concept of full price has important implications for market
behavior. It suggests, for example, that in areas where consumers' time
costs are high, as approximated by the area's average wage rate, nonre-
turnables will have a large share of the soft drink market. Similarly,
the growth in real wage rates in the U.S. economy implies an increasing
value of time, which in turn should generate a growing der.and for non-
returnables relative to returnables. Both the over tine and across-
3. This is a slight oversimplification since purchasers lose the ser-
vices yielded by the money deposit during the interval between purchase
and return, and in the event, for example, of breakage may forego the
deposit entirely. We have put these features to one side since they do
not affect the substance of our analysis.
-------
state variation in the share of nonreturnables (see Tables 1 and 2 ^nd
footnote 2) are consistent with this hyncthesis.
To take another and less obvious exarr.nle, consider the impact of
the growing labor force participation of women, particularly of married
women in the U.S. The proportion of married wo^ien in the labor for?e
today is about *t5 percent compared to 22 percent in 13^8. Since partici-
pation in market activities reduces the availability and hence increases
the value of nonmarket time, the working voman attempts to economize on
time by substituting towards less time-intensive consumption items. This
may explain in part the declining birth rate in the 'J.S. (since raising
children is a very time-intensive activity), the growing demand for fast
food restaurants and TV dinners as well as for a variety of household
items that economize on time (dishwashers, freezers, garbage compactors,
etc.)—and the increasing share of nonreturnables in the soft drink market.
Thus far we have been discussing factors relating to the demand for
nonreturnables versus returnables. The supply of any product depends on
the costs of production, which in turn is a function of the underlying
technology and the prices of the various inputs used in the production
process. The technology of returnables is relatively labor intensive
compared to that of nonreturnables, arising in part from the labor
involved in handling and transportation from the retail outlet to the
bottler. Consequently, an increase in va^e rates vill increase the costs
and hence the price of returnables relative to nonreturnables, which will
lead consumers to substitute nonreturnables for returnables.
-------
The fact that nonreturnaW.es are li~h";er has ar.other implication
for costs. Lighter bottles mean lower transportation costs, which tend
to reduce the cost advantage of local cottiers and enable firms to take
advantage of economies of scale In production, leaJl::^ in turn to a
reduction in the relative price of nonreturnatn es ar.i a consumer shift
towards nonreturnables. In addition, reducing transportation costs
increases the size of the firm's market. The possibility of a local monopoly
is reduced since it is now feasible for gcods to be shipped in to the
local market from more distant areas. The beneficiary of an expansion
in the size of a market is the consumer who now obtains goods at lower
prices.
A final point that bears on costs is trippage. Tri r.ra^e, which i 3
defined as the average number of times a returnable bottle is used, is
positively related to the probability that the returnable is in fact
returned. For example, if the probability of return is .9, one bottle,
through reuse, will provide nearly ten bottles of soft drinks. If, how-
ever, the probability of return is ,5> one bottle must be produced for
every two bottles of soda. As Table 3 indicates, trippage has gradually
declined over time, from 19.2 in 1955 *o 9.3 in 1973. Consequently, the
cost and price of returnables have risen "because riore bottles must be
produced for an unchanged quantity of soft drinks in returnable bottles.
Consumers have responded to this relative price change by shifting
towards nonreturnables, thus increasing the share of nonreturnables in
the soft drink market.
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Table 3
Soft Drink Trippage Statistics, 1955-1973
Year
1955
1956
195T
1958
1959
Trippage
19.2
18.6
18.6
18.7
18.1
Year
I960
1961
1962
1963
19614
Trippage
18.1
17.7
17.0
16.5
15.3
Year
1965
19G6
1=67
1968
1969
^3;:e
14.3
13.5
13.3
12 A
12.1
Year
1970
1971
1972
1973
Trippage
11.6
11.2
10.6
9.8
Source: Research Triangle Institute Study for FHA, 19T5-
It is sometimes alleged that producers have an incentive to dis-
courage the return of returnables. As the above analysis makes clear,
this is tantamount to arguing that producers prefer higher to lower
costs and lower to higher profits!
Supply and demand provide a compelling explanation for the nonre-
turnable phenomenon. Is there any other possible explanation? It
has "been suggested that the growth of nonreturnables is due to some
form of "brainwashing. The argument is that a "throv avay" mentality
has "been instilled in consumers "by advertising. The view that adver-
tising changes tastes has been widely criticized in important recent
writings by economists; ths modern literature stresses instead the Impor-
tant informational role of advertising and its function in reducing con-
U
sumer search costs and hence the full prices of goods to consumers.
Further evidence to support the supply-and-der;and versus the
brainwashing hypothesis regarding the growth of nonreturnables is obtainable
U. See, e.g., Phillip Nelson, Information and Conr.umer Behavior, 78
J. Pol. Econ. 311 (1970).
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using multiple regression techniques to explain differences across
states in percentage of nonreturnables. We test the economic model
by including in the regression equation variables expected to affect
the demand for nonreturnables relative to returnatles. Specifically,
we predict that the share of nonreturnables in a state is positively
related to average earnings (a proxy for the value of time) and to the
labor force participation rate of vomen, and negatively related
to the ratio of the store price of nonreturnables to that of returnables.
We test the "brainwashing" hypothesis by including "the average years of
schooling completed in a state as an independent variable in the regres-
sion equation; our theory is that to the extent "brainwashing" exists,
it will be relatively less successful in inducing the purchase of non-
returnables the more educated the consumer is. While the brainwashing
hypothesis implies that the share of nonreturnables will fall as the
level of schooling increases, the supply and demand hypothesis implies
the opposite. It has been well documented in the economics literature
that years of schooling is an important positive determinant of earnings.
Thus, our schooling variable will also capture sone component of the value
of time, and so should, by our earlier analysis, be positively rather than
negatively correlated with the share of nonreturna'oles in a state.
The results of the regression analysis, which are presented in
Table U, strongly support the economic model. We observe that the share
of nonreturnables is positively and significantly related to earnings.
5. A t-statistic (in parentheses in Table It) of 1.96 or greater, which we
term significant, indicates that there is a 2 1/2 percent or less chance
that the variable in question is not significant.
-------
We also find that labor force participation of women and average years
of schooling have positive and marginally significant effects on the
share of nonreturnables. Moreover, the positive coefficient on the
schooling variables leads us to reject the "brainwashing11 hypothesis
discussed above. The relative price of nonreturnables (the PRICE variable
in equation (2).) is also highly significant and in trie predicted direction.
Our study is preliminary rather than definitive, and further work is
planned; we believe, however, that a more complete study would confirm
and indeed strengthen our results.
Table U
Regression Coefficients and T-Statistics (in parentheses)
for the Share of Nonreturnables Across States, 1971
Independent Variables
Equat ion
ID
(2)
EARN
.012
(3.299)
.010
(2.8U9)
LFP
1-299
(1.839)
1.069
(1.596)
SCH
3-306
(i.itaS)
3.1*53
(1.560)
PRICE
-9.382
(2.1*22)
COMSTANT
-109.122
(3.596)
-UH. 769
(.1*67)
R2.
.1*3
.1*9
Notes: l) The dependent variable Is the share of returnables (cans and
bottles) in the home market for Coca-Cola and allied products
in 1971.
2) EARN = average earnings in state (1970 U.S. Census).
3) LFP = porportion of women over 16 years of age in labor force
(1970 U.S. Census).
1*) SCH = median school years completed (1970 U.S. Census).
5) PRICE = estimated ratio of price of nonravjrnaoles (weighted
average of price per ounce for 12 02. car.s and 10 oz. bottles)
to price of returnables (per ounce of 10 oz. bottles).
The conclusion of this part of our statement is clear. The, growth of
nonreturna'bles represents a rational consumer reaction to changes in demand
-------
and supply conditions that have made the full pri^e z* nonreturnables,
for many consumers, lower than the full price of re'urr.acles. Public
policies designed to reduce the use of the nonreturnacle -.--ill therefore
impose costs, of unknown but presumably substantial r.s-gnitude, on the
consuming public. In the next part of our stater.en-: ve vill consider
whether there may be offsetting benefits.
II. Arguments for Restricting Severa^e Containers
Many proponents of reducing the production of csr.s and nonreturnable
bottles stress the potential energy savings from the fact that, were
returnables to be substituted for nonreturnables, the total volume of
cans and bottles produced, and hence the energy required to produce them,
would fall. There is considerable doubt, however, vhether any net energy
savings would result from a fall, however great, in the output of cans
and bottles. Any dollars saved by consumers as a result of buying fewer
cans and bottles would be diverted to the purchase of other goods, whose
output, and hence energy consumption, would expand. It would require a
careful empirical study, which has not been done, to determine whether
there would be a net increase or decrease in the to~al consumption of
energy by the U.S. economy.
Furthermore, from an economic standpoint public intervention is not
necessary to promote the conservation of energy. If energy is so scarce
that its value would be increased by a slower rate cf use, the price of
energy will rise as producers (e.g., owners of oil fields) hold energy
off the market in anticipation of still higher prices in the future. The
rise in price will induce the user.s of energy, e.~., producers of cans
and nonreturnable bottles, to seek ways of conservlr.r its use. To the
extent that they fail in this search,and seek to xass on the higher cost
-------
of their enerpy to consumers in the forr. of higher tribes, consumers
will have an incentive to substitute p;ocds or servic-r vr.ose energy use,
and hence price, is lover.
It may be argued that there are overriding; reac~r.s of national
policy to reduce our consumption of energy. If so, r.ovsver, it is
arbitrary to single out the can and bottle industries to "bear so dis-
proportionate a share of the costs of national policy, vhen those indus-
tries are not even heavy users of-energy. Ho one proposes to force any
other industry to reduce its output "by 6l percent in order to conserve
energy.
Finally, from the standpoint of energy conservation, discouraging
nonreturnables is "but one of a variety of policies that could "be applied
to the container industries. An alternative which we discuss below would
"be to subsidize the development of recycling technol^ry. This would con-
serve all^ raw-material (including energy) uses and spread the costs of
conservation more equitably among the users of energy than a policy targeted
on the "bottle and can industries alone.
A more plausible economic reason for seeking tc discourage the pro-
duction of nonreturnable bottles is the existence of vhat economists
refer to as a "negative externality," meaning a cost of a product not
6. This estimate is based on the fact that the rr.arV.et share of soft drink
products in nonreturnable containers ir. Oregon dro~~ei from UO percent
in 1972 to only 9 percent in 1973 after the passage cf a minimum deposit
law in 1972 and assuming a trippage rats of .10 for returnables. The
resulting reduction in can production was 7^ percent and there was a net
reduction in the number of bottles produced by 2i- percent. Source~T
Stanford Environmental Law Society, Disposing of Hcr-returnables 20 (1975)-.
-------
reflected in its price. Consider a factory which er.i-s smoke that dirties
the clothes that neighboring householders hang out :.-. the line to dry.
The cost of cleaning the clothes soiled by the factory's smoke will be
ignored by both the factory and its customers because it will not be re-
flected in the price of the factory's output.
It is widely asserted that the production of ic-.-les, cans, and
other products that are not destroyed in the course of consumption involves
a negative externality in that, these products end up a; garbage and litter,
the costs of collecting and disposing of which are n;t borne fully by the
producers and their customers. Both the assertion ar.i the policy prescrip-
tions that have been deduced from it require far nore critical scrutiny
than they have yet received.
Since virtually every activity involves some externality (a home-
owner's unkempt front yard may offend passersby), the initial question for
policy is always whether a large or a trivial proportion of the social
costs of an activity are externalized. It is unclear which is the case
with solid wastes. In areas served by private scavengers, such as
Los Angeles, there is presumably no externality. Since the price of
garbage service will be set to cover the full costs ~.o the scavenger of
collection and disposal, the consumer will defray t:-.e full costs of dis-
posing of his solid wastes. The same is true in areas served by municipal
garbage services that charge the household for the costs of collecting its
7. See Raymond Delrich, Refuse Collection, Solid Vastes Management,
Jan. 1976, p. !i2, noting that mainly because-of co.-pstition between
private contractors, Los Angeles County-enjoys one of the best refuse
systems in the United States.
-------
garbage rather than relying wholly or partly on general tax revenues
to defray expenses.
An even more important consideration, we believe, is that much of
the cost of solid waste is incurred within the household; and this part
of the cost is fully internalized regardless of how garbage collection
is priced. The household cost includes the allocation of space for
storing garbage between pick-ups, the disagreeable characteristics of
the garbage, and the time and exertion involved in carrying one's gar-
bage to the point of collection.
That these costs are substantial is attested by the growth in demand
for sink-disposal units, home garbage compactors, and other costly devices
o
for reducing the amount of garbage in the hone. That the "household
costs" of garbage have probably been growing over time is suggested by
the decline in the frequency of garbage collection (a decline that has
shifted more of the total cost of garbage to the household), the growth
in the value of people's time mentioned in the first part of this state-
ment, and the growth in suburbanization, which has increased both the
distances that people must carry their garbage to be collected and the
intervals between collections.
The existence of substantial household costs of garbage collection
gives consumers strong incentives to minimize the weight and volume of
their garbage. To be sure, garbage collection fees unrelated to weight
8. The number of trash compactors sold in the United States rose from
none in 1970 to 320,000 units in 1973, vhile food waste disposers
increased in number of units sold from 1,360,000 in 19&5 tc> 2,970,000
units in 1973. In 1973, the average trash compactor sold for $220 and
the food waste disposers cost $65 each on average. Statistical Abstract
of the United States, 1975, tab. 130U.
-------
and volume do not; nor do the factors thus far discussed provide an
answer to the litter problem. The discussion does, however, raise a
question vhether the solid-waste externality is of such a magnitude as
would justify public intervention—always a costly response to .1 problem,
as any student of government will appreciate.
Even if public intervention is warranted, there is no presumption
that it should involve the regulation of p^oduc^ion. In the factory
smoke example, suppose the factory could install smoke-suppression equip-
ment at a total cost of $1 million, while the neighboring residences could
eliminate smoke damage at a total cost of only $10,000 simply by drying
their clothes indoors. Clearly, as between forcing the factory to install
smoke-suppression equipment and forcing its neighbors to dry their clothes
indoors, the latter would be the superior policy measure (even better would
be to do nothing, and let the neighbors rzake their own decisions as to
whether to incur smoke-damage costs or drying -indoors costs). Similarly,
the cheapest vay to get rid of any sol id-vast e externality may be simply
to charge households for garbage collection according to the volume, weight,
and/or type of garbage they produce. Another alternative would be to sub-
sidize recycling plants that would buy people's garbage and thereby remove
it from the solid-waste stream. Litter right be dealt with by altering the
penalties for littering or by allocating greater resources to law enforce-
ment, litter pick-up, or other measures. To cost out these alternatives
and decide which is the most efficient would require an empirical study
that, to our knowledge, has never been done.
III. Evaluation of Alternative Policies
In light of the foregoing analysis, we shall now attempt to evaluate
-------
various concrete policy alternatives. As should be clear from the analysis
our preference is to do nothing at this tine. Hot enough is known about
"the solid—waste problem to design a form of public intervention that vould
be more beneficial than costly. Discouraging nonreturnable bottles and
cans vould, as we saw in the first part of this statement, impose sub-
stantial costs on consumers. Whether these costs vould "be outweighted by
9
the benefits in reducing the social costs of solid waste and litter, and,
even if so, whether alternative forms of intervention, such as a tax on
households proportioned to the weight and volume of their garbage or a
beefed-up system of enforcing anti-litter ordinances, would yield a higher
benefit-cost ratio ., is entirely speculative at this stage of knowledge of
the problem.
The government's record of intervention in economic life during the
past ten years of frenetic public-sector activity is not a happy one. As
even the proponents of public intervention are increasingly forced to
acknowledge, many well-intentioned attempts at intervention have foundered
"badly. The danger of public-sector failure is of course enhanced when
intervention occurs against a background of ignorance of the relevant
economic variables. Despite the reams of studies that have been published
on the solid-waste problem, no competent cost-benefit analysis, utilizing
the accepted theoretical premises and empirical methodology of modern
economics, has ever been conducted.
If contrary to our advice it is decided that some form of public
9. Only O.l6 percent of the total solid-waste stream is composed of
cans and bottles. See Frank A. Smith and Charles Ryhmer, Waste Age
Magazine, April 1976, pp. 8, 29-
-------
intervention is desirable at this time, we would reconniend, as a seriously
intended though politically infeasible reform, the abolition of public
garbage service and its replacement by private scavenging. As is well
known, private garbage collection is a good deal cheaper than public;
but, more important to the present discussion, privatization eliminates
at a stroke the solid-waste (not the litter) externality because a private
firm, unlike a government enterprise, must charge a price equal to its
costs. If landfill is scarce and its price therefore high, the private
scavenger's costs will rise and he will pass them on to his customer, the
household, vhich in turn will seek to substitute products that produce
less or less costly garbage. In short, if there is a solid-waste exter-
nality, it is largely or entirely an artifact of government intervention
in a market, garbage collection, that could well have been left in the
private sector. The solution is less, not more public intervention in
the solid-waste area.
Far down on our list of policy prescriptions are those most widely
advocated in this area, mandatory deposit legislation and product charges.
A mandatory-deposit law in effect imposes a tax on nonreturnable bottles
and cans. Set high enough, the tax induces the consumer to switch to a
10. An alternative would be to deny municipal garbage services access
to tax revenues, thus forcing them to defray their expenses entirely from
fees charged to their customers, and to allow the competition of private
scavengers.
11. See Delrich, supra note 7, at I(lt,lt8.
-------
nontaxed product that is a close substitute, i.e., returnable bottles.
If, however, the benefits of the nonreturnable exceed its costs including
any external costs, the result of the tax is to reduce consumer welfare.
Other results are possible, including a reduction in the competitiveness
12
of the container industries " and at least a temporary dislocation in
the relevant capital and labor markets. These dislocations might
be tolerable if the full social costs of nonreturnables exceeded their
benefits; but the opposite may veil be the case, in vhich event the
incidental dislocations would simply aggravate the velfare-diminishing
effects of the mandatory-deposit law.
Particularly objectionable is a national mandatory-deposit law, for
it is a certainty that the solid-waste externality, whatever it is, is
not uniform throughout the country—it is obviously greater in New York
City than in Nevada. A uniform national tax is certain to be an exces-
sively blunt instrument for dealing with whatever externality may exist.
Indeed, no reason appear^ why the social costs of garbage and litter should
be regarded as a federal problem at all, rather than one appropriately left
12. This could come about in either of two ways-tor both). First, the
reduction in the output of the can and bottle industries could, depending
on cost conditions in the industry, result in a reduction in the number
of firms. Second, "because returnables are heavier than nonreturnables
and the costs of transporting them therefore higher, the substitution of
returnables for nonreturnables could reduce the size of the geographical
markets in which containers are sold, and thereby reduce the number of
effeqtive competitors for given customers.
13. It was estimated that the effect of Oregon's forced deposit law on
earnings for the packaging industries was a loss of $6.9 million to $8.6
million during the first year alone. There was also an overall net loss
of 227 jobs and the industries involved were forced to make capital invest-
ments of between $6.U million and $8.5 million. "The total price for
reducing Oregon's litter by 10$: $20 million." (Ignoring the costs to the
consumer in loss of convenience and choice.) Jim "oCord, Solid Wastes
Management, February 1976, pp. U6, U7.
-------
to state action. With few exceptions, the costs of collecting and dis-
posing of solid wastes, including litter, are "borne entirely "by residents
of the state in which the solid wastes are generated. People who "buy
beer cans in New York do not discard them in Alabama, and the garbage
collected in New York is not buried in Alaska. While no doubt there are
instances where solid wastes produced in one state are disposed of in
another, these are surely the exceptions. Since the problem of solid
wastes is thus predominantly a local rather than national one, the solu-
tion should be the responsibility of each state. This is especially
indicated because, as mentioned, the social costs of solid wastes differ
widely across states, so that a uniform national solution would almost
certainly be inferior to each state's deciding what to do about the solid-
vaste problem within its borders.
Product charges are simply taxes on those products which are believed
to contribute most heavily to the solid-waste problem. The main difference
from a mandatory-deposit law lies in where the revenue of the tax goes;
the mandatory-deposit law in effect rebates the tax to the consumer, while
the product-charge generates tax revenues for the government. Actually,
the revenue-raising character of the product charge nay be illusory, for
to the extent the tax succeeds in its primary objective of inducing sub-
stitution away from the taxed (i.e., heavily solid-vaste-producing) products,
it will fail to generate substantial revenue. The objections discussed
above to mandatory deposits apply with essentially the same force to product
charges.
A different approach has been suggested by the soft drink "bottlers.
It is to impose a very small tax on most producers—in effect, a tiny
-------
national excise tax. The tax would "be in effect for 10 years, and
during that period would generate about $2.3 "billion in revenues vhich
would be earmarked for the subsidization of recycling technology and
for litter pick-up.
The soft drink bottlers' proposal was not designed "by economists,
and we consider it inferior to either doing nothing or privatizing the
garbage collection system. We consider it superior, however, to proposals
such as mandatory deposits and product charges—and not because it would
be less costly to the stockholders of soft drink bottling companies.
The tax would, because of its minute size (five one-hundredths of one
percent), have negligible effects on the decisions of producers and con-
sumers. We consider this a plus for the proposal because not enough is
known about the costs and benefits of returnables versus nonreturnables
to warrant imposing a tax designed to induce the wholesale substitution of
the former for the latter. By the same token, the bottlers' proposal
would not lead to the sorts of dislocations in the capital and labor
markets that seem gratuitously cruel and disruptive in the absence of a
good reason for believing that they are necessary to improve the overall
efficiency of resource allocation.
The revenues from the tax would be used to address a perceived,
though in our judgment unproven, problem of excessive consumption of
energy and raw materials, by subsidizing the development of recycling
technology. Also 5- the solid-waste stream vould be reduced. Perhaps
lU. Besides the obvious saving of more raw materials per ounce of beverage
than a returnable bottle system,a system of 100 percent recycling of metal
cans results in the consumption of approximately the same amount of energy
as the use of the returnable bottles. Stanford Environmental Law Society,
Disposing of Nonreturnables 71 (1975).
-------
the most attractive feature of the proposal is its possible effect on
litter. By creating a market for all sorts of potential litter (not
just cans and bottles), recycling would both reduce ths volume of litter
(the litterer would be losing the money he could get from a recycling
center) and create a voluntary corps of litter renovers, consisting of
people who would collect litter in order to sell it to a recycling center.
Because the tax would expire at the end of 10 years, the nation would
presumably be spared the prospect of perpetually subsidizing an uneconomical
activity. It should be emphasized in an era of justified skepticism con-
cerning the motives of proponents of government action that no soft drink
bottler, to our knowledge, is in the recycling business or proposes to
enter it.
To conclude, we believe that the economics of the solid-waste problem
dictate a more cautious attitude toward remedial measures than is evidenced
by the rash of measures and proposals in this area. We think in fact
the correct economic advice to you is to commission a rigorous empirical
study of the costs and benefits of alternative solutions to the solid-waste
problem, utilizing the methodology of modern economics. We emphasize that
no such study has ever been conducted in the solid-waste area. However,
if the momentum for intervention has become irresistible, then we commend
the soft drink bottlers' proposal to you as an interim measure considerably
less objectionable than the more interventionist alternatives now on the
policy agenda.
-------
WILLIAM MARTIN LANDES
Personal
Date of Birth
Place of Birth
(larch 30, 1939
New York, ^^ew York
Education
B.A., 1960
Ph.D., 1966
Honors:
Professional Experience
University of Chicago
The Law School
National Bureau of Economic
Besearch, Inc.
Graduate Center of the City
University of New York
Colunbia University
University of Chicago
Stanford University
Other Current Affiliations
Colunbia College
Colunbia University
President's Fellowship, Columbia
University, 1962-1963
Ford Foundation Doctoral Dissertation
Fellowship, 1962-1964
I.B.H. Watson Fellowship, 1964-19G5
Ansley Award ttomination. Economics
Department at Colutrbia University,
1966
Professor of Economics, January 1974—
Senior Research Staff, 1973—
Research Associate, 1969-1973
Research Fellow, 1968-1969
Research Assistant, 1962-1963
Associate Professor, 1972-1974
Associate Professor, 1969-1972
Assistant Professor, 1966-1969
Assistant Professor, 1965-1966
Henber, American Economic Association
Editor, The Journal of Law and Economics, 1975—
Publications
Books and Monographs:
Essays in The Economics of Crime and Punishment, (edited with Gary S.
Becker), National Bureau of Economic Research, 1974.
-------
William M. Landes
Page Two
Articles:
"The Effect of State Fair Employment Law on the Economic Position of
Nonwhites, "Papers and Proceedings of the American Economic
Review, Vol. LVII, May 1967. '
"The Economics of Fair Employment Laws," Journal of Political Economy,
Vo. 76, No. 4, Part I, July/August 1968.
"Roundtable on the Allocation of Resources to Law Enforcement,"
Papers and Proceedings of tile American Economic Review, Vol. LIX
May, 1969.
"An Economic Analysis of the Courts," Journal of Law and Economics,
Vol. XEV, April 1971. (Reprinted in Becker and Landes, Essays
in the Economics of Crime and Punishment.)
"Law and Economics," National Bureau of Econoric research - 51st
Annual Report, September 1971.
"Compulsory Schooling Legislation: An Economic Analysis of Law and
Social Change in the Nineteenth Century," Journal of Economic
History, March 1972 (with Lewis Solmon.)
"The Bail System: An Economic Approach," Journal of Legal Studies
January 1973. (Reprinted in Becker and Landes, Essays in the
Economics of Crime and Punishment.)
"Foreign Criminal Procedure: A Conment," in The Economics of Crime
and Punishment, conference volume of the American Enterprise
Institute for Public Policy Research, 1973.
"Legality and Reality: Some Evidence on Crir.iinal Procedure," Journal
of Legal Studies, June 1974.
"The Private Enforcement of Lav;," Journal of Legal Studies, Jan.
1975 (with Richard A. Posner).
"The Independent Judiciary in an Interest Gro'jp Perspective,"
(Universities-National Bureau Conference on Economic Analysis
of Political Behavior) , Journal of Law a-id Economics, Dec.
1975 (with Richard A. Posner).
"Legal Precedent: A Theoretical and Empirical Analysis," Journal p_f
Law and Economics, Sept. 1976 (with Richard A. Posner) .
-------
September 1977
University of Chicago Law School
1111 East 60th Street
Chicago, Illinois 60637
RICHARD A. POSHER
Curriculum Vitae
Education: A.B., Yale College, 1959, summa cum
laude; LL.B., Harvard Law School, 1962
magna cum laude and Fay Diploma (first
in class); President, Harvard Law Review
Occupation: Law Clerk to Mr. Justice William J.
Brennan, Jr., U.S. Sunreme Court
(1962-63)
Assistant to Commissioner Philip ELraan,
Federal Trade Cor^iission (1963-65)
Assistant to the Solicitor General of
the United States (1965-67)
General Counsel, President's Task Force
on Communications Policy (1967-68)
Associate Professor of Law, Stanford
Law School (1968-69)
Professor of Law, University of Chicago
Law School (since 1969)
Other Activities: Senior Research Associate, National
Bureau of Econonic Research (1971-76)
Member, Senior Research Staff, National
Bureau of Economic Research (since 1976)
Editor, Journal of Legal Studies
(since 1972)
Meraber, President's Task Force on
Competition and Productivity (1969);
American Bar Foundation's Commission
to Study the FTC (1969)
Professional Memberships: American Bar Association
American Economic Association
American Law Institute
-------
Richard A. Posner — Bibliography
Eoo\s
1. Economic Analysis of Law (Little, Brown, 1973)
2. Antitrust: Cases, Economic Notes, and .Other Materials (West, 197U)
3. Antitrust Lav: An Economic Perspective (University of Chicago Press,
1976)
It. The Workload of the Supreme Court (American Bar Foundation, 1976)
(•with Gerhard Casper)
5. Economic Analysis of Law (23. ed.) (Little, Brown, 1977)
Articles and Article-Length Monographs
1. Natural Monopoly and Its Regulation, 21 Stan. L. Rev. 518 (1969)
2. Oligopoly and the Antitrust Laws: A Suggested Approach, 21 Stan.
L. Rev. 1562 (1969)
3- Working Paper II: Advertising and Product Differentiation, 2 Anti-
trust Law & Econ. Rev. 1(7 (1969)
It. The Federal Trade Commission, 37 U. Chi. L. Rev. 1*7 (1969)
5. The Provision of Data-Processing Services by Communications Common
Carriers, in R. Dunn, Policy, Issues Presented by the Interdependence
of Computer and Communications Services (Stanford Res. Inst., Rep.
No. 7379 B-l, Feb. 1969)
6. Conglomerate Mergers and Antitrust Policy: An Introduction, Itlt
St. John's L. Rev. (Spec. Ed.) 529 (1970)
7. Cable Television: The Problem of Local Monopoly (RAND Memorandum
RM-6309-FF, May 1970)
8. Antitrust Policy and the Consumer Movement, 15 Antitrust Bull. 36l
(1970)
9. A Statistical Study of Antitrust Enforcement, 13 J. Law & Econ.
365 (1970)
10. Natural Monopoly and Its Regulation: A Reply, 22 Stan, L. Rev,
5UO (1970)
11. A Program for the Antitrust Division, 38 U, Chi. L. Rev, 500 (1971)
12. Taxation by Regulation, 2 Bell J. Econ. S. Management Sci, 22 (1971);
also Reprint 2l8, The Brookings Institution (!971)
-------
13. Regulatory Aspects of National Health Insurance Plans, 39 U. Chi.
L. Rev. 1 (1971)
14. Killing or Wounding to Protect a Property Interest, lU J. Law &
Econ. 201 (1971)
15- A Theory of Negligence, 1 J. Leg. Studies 29 (1972)
16. The Behavior of Administrative Agencies, 1 J. Leg. Studies 305
(1972), also in Gary S. Becker & William M. Lances, eds., Essays
in the Economics of Crime and Punishment 215 (UTn)
17. Volume One of the Journal of Legal Studies — An Aftervord, 1 J.
Leg. Studies 1»37 (1972)
18. Market Transfers of Water Rights: Tovard an Improved Market in Water
Resources (National Water Commission, Legal Stui'y '~.o. k. Final Report,
July 1, 1972, published by Kat'l Tech. Info. Eerv. ) (with Charles J.
Meyers )
19- The Appropriate Scope of Regulation in the Cable Television Industry,
3 Bell J. Econ. & Management Sci. 98 (1972)
20. Strict Liability: A Comment, 2 J. Leg. Studies 205 (1973)
21. Reflections on Consumerism, U. Chi.L.S. Rec . , vol. 20, no. 3
(spring 1973), p. 19
22. An Economic Approach to Legal Procedure and Judicial Administration,
2. J. Leg. Studies 399 (1973)
23. Economic Justice and the Economist, Public Interest, fall 1973, p. 109
2k. Regulation of Advertising by the FTC (American Enterprise Institute,
1973)
25. The Probable Effects of Pay Cable Television on Culture and the Arts
in Richard Adler & Walter S. Baer, eds. The Electronic Box Office:
Humanities and Arts on the Cable 79 (1971*)
26. Truth in Advertising: The Role of Government, ir. Yale Brozen, ed. ,
Advertising and Society 111 (I97lt )
27. An Economic Analysis of Legal Ruleaaking, 3 J. Leg. Studies 257
(19710 (with Isaac Ehrlich)
28. Certificates of Need for Health Care Facilities: A Dissenting View;
in Clark C. Havighurst, ed. , Regulating Health Facilities Construction
113
29. Theories of Economic Regulation, 5 Bell J, Econ. E- Management Sci.
335 (19710
-------
30. Problems of a Policy of Deconcentri't,ion, in Harvey J. Goldschmid,
et_ al_. , eds., Industrial Concentration: The New Learning 393 (197U)
31. Exclusionary Practices and the Antitrust Laws, hi U. Chi. L. Rev.
506 (I97l»)
32. A Study of the Supreme Court's Caseload, 3 J. Leg. Studies 399
(19T'0 (with Gerhard Casper)
33- Power in America: The Role of the Large Corporation, in J. Fred
Weston, ed., Large Corporations in a Changing Society 91 (1975)
3*4. The Private Enforcement of Law, It J. Leg. Studies 1 (1975) (with
William M. Landes)
35. The DeFunis Case and the Constitutionality of Preferential Treatment
of Racial Minorities, 197^ Sup. Ct. Rev. 1
36. Antitrust Policy and the Supreme Court: An Analysis of the Restricted
Distribution, Horizontal Merger and Potential Competition Tt^oisions,
75 Colum. L. Rev. £32 (1975)
37- The Economic Approach to Law, 53 Texas L. Rev. 758 (1975)
38. The Social Costs of Monopoly and Regulation, 83 J. Pol. Econ. 807 (1975)
39- A Comment on Ho-Fault Insurance for All Accidents, 13 Osgoode Hall
L.J. 1*71 (1975)
1(0. The Supreme Court and Antitrust Pulicy: A New Direction?, kk Anti-
trust L.J. lUl (1975)
Ul. The Independent Judiciary in an Interest-Group Perspective, 18 J.
Law 8: Econ. 875 (1976) (with William M. Landes)
Il2. Market Funds and Trust-Investment Law, 1976 te. Bar Foundation Res.
J. 1 (with John H. Langbein)
1»3. The Prudent Investor's Powers and Obligations in an Age~of f/arket
(Index) Funds, in Evolving Concepts of Prudence 19 (Financial
Analysts Res. Foundation 1976); also in 5 J. Contemporary Bus.,
Summer 1976, p. 85
kk. Oligopolistic Pricing Suits, the Sherman Act, and Economic Welfare
(Symposium): A Reply to Professor Markovits, 2S Stan, L, Rev. 903
(1976)
Il5. The Rights of Creditors of Affiliated Corporations, '13 U. Chi, L.
Rev. 1)93 (1976)
It6. Blackstone and Bentham, 19 J. Law i Econ, 569 (1976)
-------
147. The Revolution in Trust Investment Law, 62 A.B.A.J. 83? (1976)
(with John H. Langbein)
148. The Robinson-Patman Act: Federal Regulation of Price Differences
(American Enterprise Institute, 1976)
1(9. Legal Precedent: A Theoretical and Empirical Analysis, 19 J.
Law & Boon. 2l)9 (1976) (with William H. Landes)
50. Market Funds and Trust-Investment Law: II, 1977 Am. Bar Foundation
Res. J. 1 (with John H. Langbein)
51. An Approach to the Regulation of Bank Holding Companies (forthcoming
in Journal of Business) (with Fischer Black and Mertor. H. Miller)
52. The Federal Trade Commission's Mandated-Disclosure Program: A
Critical Analysis (forthcoming in conference volune of the Columbia
University Center for Law and Economic Studies)
53. Market Funds and Efficient Markets: A Reply, 62 A.B.A.J. l6l6 (1976)
(with John H. Langbein)
S**. Impossibility and Related Doctrines in Contract Law: An Economic
Analysis, 6 J. Leg. Studies 83 (1977) (with Andrew M. Rosenfield)
55. Salvors, Finders, Good Samaritans, and Other Rescuers: An Economic
Study of Law and Altruism (forthcoming in Journal of Legal Studies)
(with William M. Landes)
56. The Economics of Baby Shortage (miffleo,, May 1977) (with Elisabeth M.
Landes)
57* Gratuitous Promises in Economics and Law (forthcoming in Journal of
Legal Studies)
58. The Caseload of the Supreme Court: The 1975-and 1976 Terms (forth-
coming in Supreme Court Review) (with Gerhard Casper)
59- Law, Economics, and Altruism (with William M. Landes)
-------
We next considered possible policy c'~ions. Because the cost::
of intervening in the container market are substantial and the benefits
unknown, our preferred policy is to do notr.ing—except conduct the kind
of rigorous empirical study of the costs ar.i benefits of alternative
policies that has never "been done. If, hovever, the momentum for public
intervention has become irresistible, then ve suggest privatizing p^rbage
collection as a method of ensuring the internalizatior. of the social costs
of solid waste. Far down on the list of possible policy options is the
mandatory deposit or product charge—forms of taxation designed to bring
about drastic changes in consumer behavior without any basis for believing
that the benefits of such changes would excaed the costs.
We considered finally the alternative proposed by the soft drink
bottlers, i.e., a tiny national excise tax the proceeds of which would be
used to subsidize, over the 10-year period in which the tax would be in
effect, the development of recycling technology and litter pick-up. The
proposal is not ideal from an economic standpoint but contains attractive
features given the lack of knowledge of the appropriate economic policy
toward containers. The proposed tax would avoid forcing drastic changes
in consumer behavior and in capital and labor markets that cannot te deemed
cost-justifiable on the basis of present knowledge. It would yield sub-
stantial but not profligate revenues to address the videly perceived,
though in our judgment unproven, problem of raw-material (including energy)
consumption and of solid-waste disposal, "e commend it as a possible interim
measure pending rigorous empirical study of whether any regulation of non-
returnable containers is warranted and if so what kind.
-------
My name is Sidney P. Mudd. I am a soft drink manufacturer
in New Rochelle, New York. I appear today in behalf of the
National Soft Drink Association. The industry's size is conveyed
by 2300 manufacturing plants, 140,000 employees, and annual sales
in excess of 11 billion dollars, wholesale value.
The issue before us, government intervention to influence
private sector production and buying decisions, is both serious
and complicated. It involves capital dislocations estimated to
approach 5 billion dollars;! the displacement if not loss of some
80,000 skilled jobs; a limitation on industry's capacity to take
its product to market in the fashion most likely to meet consumer
needs and wants; and the freedom of the consumer to make
individual choices in the struggle to achieve the standard of
living he or she elects, without guidance from government. These
issues cannot be addressed sub*tantively in the time we have been
allotted. We sincerely hope*our written statement will be given
careful consideration by the members of the Committee.
We view litter and solid waste as variations of the same
problem. From a national policy standpoint neither should be
addressed in piecemeal fashion. Public concern should address the
Total investment by the soft drink industry is estimated by NSDA
to be $1.9 billion. Dept. of Commerce estimate of total capital
costs to all industry is $3-4 billion, "The Impacts, of Nat'l.
Container Legislation," Oct., 1975, Bureau of Domestic Commerce.
-------
- 2 -
mass of solid waste and its disposition, by whatever means is most
effective and correspondingly, less costly and disruptive.
The avowed purpose oy beverage container legislation is to
increase usage of refillrable bottles and decrease usage of non-
refillable bottles andr cans. The result would be to alter
profoundly the way jife which soft drinks are sold to the consumer.
It is fajX^rom certain what alterations would be achieved by
such legislation in container disposal practices of consumers.
Estimates of fewer packages in the waste stream are based upon
questionable assumptions of lower costs to consumers and historic
consumer behavior under an all-returnable system. Our conviction
is that neither assumption is currently valid.
The underlying fallacy in such theories is the failure to
recognize the strength of implicit values which exist among
consumers. It is no longer possible to predict consumer behavior
solely on discretionary purchasing power or comparative price
differentials, because of a full price standard which permeates
Jf
the marketplace .^The full price of a consumer commodity includes
such costs to the individual as time, convenience, social prestige
and so forth. Because consumers attach different personal costs
to the return of a bottle (e.g. gasoline, storage, sanitation,
time, convenience, breakage), the full price of the returnable
will vary among consumers. The operation of this market force is
undeniably demonstrated by the rise of non-returnable market share
-------
- 3 -
from near 0 in the mid-Fifties to some 56 percent today, with a
distinct, store-cost advantage to refillables during that time.
This market response is unmistakably clear: consumers placing a
relatively low cost on the return process will elect returnables,
while those placing a relatively high cost on that process willjM
f*t**^^^
choose non-returnables. This is precisely how the market'is
i ik^^^^A — /
segmented and serviced today. ferfWCt/ 4MP^**^*^^^> W"IA*A«*
Mandatory deposits do indeed deter the beverage manufacturer
from continuing to serve a segmented market effectively.
Mandatory deposits would combine the now efficient one-trip
containers with the capital and labdr intensive returnable
distribution system. These cost pressures^muslflflqw to consumers.
However, the interest of manufacturers is to lower prices
^hereby increase salesjf not to raise them. Therefore• forced
to use the costly returnable system, the manufacturer is pressured
to combine it with the refillable bottle, in the hope that his
store price will not escalate. In our view, this is the only
valid assumption associated with mandatory deposits
J?~
If these pressures fail to materializg^and cans remain in
the market above token levels, there is no adequate national
"recycling" capability to accommodate them. It would require a
national commitment to bring one into being; a proposal we shall
address positively in a few moments. While current resource
costs temporarily permit aluminum to enjoy the economycji
recycling, aluminum cannot meeirotal beverage can^emand.
-------
- 4 -
,» For returned steel cans, only two avenues are available:
'&*
(1) the bottler or distributor, after refunding the deposit,
may dump them into the municipal waste stream, passing along
the added handling costs to consumers; or (2) the steel industry
may "make a market" for used cans, and accept them from the
bottler or distributor. The cost of subsidizing such a "market"
will be added to the nrice of new cans (or other steel products),
and again passed to consumers.
Thus, mandatory deposits wi3/L have likely created an enormous
competitive advantage for aluminum, which can hardly be viewed as
a desirable result of public p/licy. But aluminum itself will be
disadvantaged in the market c/mpared to glass, because it will
have been saddled with the mpre costly returnable distribution
system, even though it is ifot refillable.
Therefore, social gains imagined to flow from mandatory
deposits ultimately depend on refillable containers, returned a
sufficient number of times. Faith in this concept is rooted in
the belief that enough gaAcautacs^will prefer returning the container
to forfeiting the deposjl^/ HiTTlT—linli in " l"l 1 directly jj^-**"" rm*^
^fthe fact; thit ntTitn thnm irhn c"*nil pnrnhnrn i—tiir-iiM— are
deducing lilWeasing attention to costs other than store costs.
The increasing willingness of returnable buyers to discard deposit
M
containers (as well as deposits) is evidenced by the fact that
trippage — the number of times containers are returned for
deposit — has declined from a national average of twenty trips
-------
- 5 -
in the mid-Fifties to an average of ten or twelve trips today.
Many areas of the country have fallen below four trips.
We find no evidence, either in the marketplace or from
regulatory theorists, that mandated deposits will alter basic
value judgements of the public. Those values will remain
essentially unaffected by mandatory deposits. They originated
in a. deposit-only market. Consequently, public policies designed
to reduce the use of non-returnables will impose costs, presumably
of substantial magnitude, on ±he consuming public.
The costs of marketing refillable containers relate directly
to the number of container-returns. A total returnable market
(including that 55 percent which now pays a premium to avoid
return) must sustain at least the trippage provided by those who
now support the returnable system if prices of beverages are to
remain stable and if environmental gains are to be achieved.
That notion assumes that today's users of non-returnables will
embrace the return process to the same degree as do returnable
users, a choice they now increasingly reject. If the industry
were 100 percent returnable today and experienced an increase
in container loss rate (percent of sales not returned) of only
4.5%, trippage would drop from 12 to 8 trips. With an increase
in loss rate of only 17%, trippage declines to 4 trips. The
The inevitable retail handling fee ($0.01-$0.015 per container)
which accompanies mandatory deposits will alone increase beverage
prices by approximately $600 million per year.
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- 6 -
impact on consumer prices — and on theorized environmental
gains — is self-evident.
II, in spite of obvious perils, some form of government
intervention is politically inevitable, we would urge a broadly
based national program designed to accelerate the development of
pesource recovery. Such a program, funded by a recovery charge
small enough to avoid artificial constraints on economic decisions
by producers or consumers, could adequately subsidize th
placement of nationwide resource recovery facilities. Designed
to expire after a limited number of years, the program would not
long intrude upon free market allocation of resources. The outline
of such a program is attached to our complete statement and we
/
urge its consideration as both a practical and less intrusive
public policy alternative.
Because we are convinced that the alternative represented by
such a concept is less disruptive, less punitive, more constructive
«fP*»
and more promising of progress in dealing with solid waste, we
look forward to introducing it to both administrative and legislative
branches of the government in the immediate future. We are
confident that with it, we will be able to bring substantial
support from both industry and labor. And hopefully, from such a
posture, industry, labor and government can work together to
meaningfully address this concern of society.
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REYNOLDS METALS COMPANY
STATEMENT
BEFORE THE RESOURCE CONSERVATION COMMITTEE
ON BEVERAGE CONTAINER DEPOSIT LEGISLATION
October 19, 1977
Members of the Committee, my name is Robert F. Testin.
I am Director of Environmental Planning for Reynolds Metals
Company in Richmond, Virginia. I am responsible for the
corporation's resource recovery activities.
Reynolds Metals Company is opposed to mandatory deposits
on beverage containers. It is our belief that this approach
to resource conservation is deficient on two counts. First,
beverage container.deposits could result in serious financial
and employment losses to materials suppliers, beverage
container manufacturers and the beverage industry generally.
These potentially large financial and labor disruptions
caused by container deposits would be accompanied by only minor
impacts on the problems of litter, solid waste, energy and
resource conservation that they are designed to solve.
It is our belief that beverage packaging systems can most
efficiently serve the consuming public in a free market environment
where competition forces all segments of the industry toward
more efficient use of materials and energy. As just one example,
we can look at our product -- the aluminum beverage can. The
aluminum beverage can was introduced in the mid-1960s and has
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- 2 -
been an extremely successful package. Competitive pressures
have forced other materials suppliers such as glass and steel to
dramatically cut their package weights during the time that
the aluminum can has been a competitive force in the market-
place.
And, we have not been idle either. The aluminum beverage
can, already an extremely lightweight package, has been reduced in
weight approximately 23%, by Reynolds, and we have continuing
plans for further weight reductions. The aluminum industry is
on an energy conservation program as well, and has reduced
the energy required to manufacture aluminum more than 8.5% in
the last four and a half years. And we are using less primary
metal and more recycled scrap metal every day, thus increasing
our energy savings.
It is our belief that the response of the consumer in a
free market environment will push him toward the most viable
package when all factors (economic, environmental, convenience,
quality, etc.) are taken into account. We are confident that
this package will be the aluminum beverage can, but we are
willing to stand the test of a free market to determine the
eventual outcome. We believe that any other approach will be
economically disruptive and not stand the test of a cost-benefit
analysis.
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- 3 -
In addition to constantly sharpening our competitive
edge through approaches such as materials and energy reductions,
we are continually searching for innovative solutions to the
problems your Committee is addressing today. The most dramatic
example of this is the aluminum can recycling program which
last year brought in some 4.8 billion aluminum beverage
containers or nearly one out of every four produced in the
United States. As the pioneer in consumer recycling, Reynolds
Metals Company bought back some 2.4 billion cans in 1976
or approximately 507o of its total production. From its inception
10 years ago, our Reynolds program alone has resulted in the
recycling of 9.7 billion cans with a cash payment to the public
of $62 million.
Aluminum can recycling is continuing to grow both in
the company and throughout the industry at a rapid rate and
at last count, there were some 2100 locations around the
country where aluminum cans, and often other clean aluminum
consumer products, can be sold back to our industry for cash
payment.
We have not ignored the other half of the problem
either -- those containers which are not separated for recycling
but find their way into the solid waste stream. At Reynolds we
have been conducting research since the early 1970s on the
development of methods to retrieve aluminum from solid waste.
Other aluminum companies and private companies manufacturing
specialty equipment also have been investigating this area.
-------
Several aluminum recovery systems are now in place in
resource recovery operations around the country, and a number
of others will be on stream shortly. We have several long-term
contracts to buy the aluminum recovered from solid waste
processing systems and we understand that other aluminum
companies have similar purchasing commitments.
On the first of November we are sponsoring a technical
seminar in Richmond on the recovery of aluminum from solid
waste. This seminar is pointed toward the professional
engineering community and is designed to insure the
technology of aluminum recovery from solid waste is made
known to the technical community responsible for designing
resource recovery plants. Similar seminars, sponsored by
other aluminum companies, are being held in Pennsylvania and
California, pointed toward similar audiences.
In summary, I believe that we are moving forward to do
the job that is of concern to this committee. Furthermore,
we are doing it in a way that is not economically disruptive
and, instead, makes a positive contribution to the economy of
the nation.
We will be supplying the Committee with additional
information on the aluminum can, including our responses to the
questions that were set forth prior to this meeting. But if
you have questions now, I will be pleased to respond.
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I REPRESENT BOTH THE RHODE ISLAND SOLID WASTE
MANAGEMENT CORPORATION, A QUASI-PUBLIC CORPORATION AIDING
THE STATE OF RHODE ISLAND IN THE DEVELOPMENT OF A STATEWIDE
SOLID WASTE MANAGEMENT PLAN AND THE RHODE ISLAND BOTTLE BILL
COALITION, A GROUP OF CITIZENS WORKING FOR BEVERAGE CONTAINER
DEPOSIT LEGISLATION FOR RHODE ISLAND.
IT IS OUR OPINION THAT FEDERAL LEGISLATION MANDATING
BEVERAGE CONTAINER DEPOSITS SUPERCEDING STATE LAWS IS NECESSARY.
WE SUPPORT A SIMPLE, STRAIGHTFORWARD LAW THAT WOULD
END WASTEFUL USE OF ENERGY AND MATERIAL: REDUCE UNSIGHTLY
LITTER AND HELP RELIEVE STATE AND LOCAL GOVERNMENTS OP THE
BURDENS OF CONTROLLING THIS LITTER.
AS WE HAVE HEARD MANY TIMES TODAY, THE NEED FOR THIS
LEGISLATION IS OBVIOUS; AND THE TIME FOR THIS HAS ALREADY
PASSED US BY_J MAKING IMMEDIATE ACTION NECESSARY.
THE SOLID WASTE MANAGEMENT CRISIS IN THIS COUNTRY IS
OF SUCH PROPORTION THAT NO ONE METHOD OF WASTE CONTROL CAN BE
EFFECTIVE ALONE.
WE ARE OF THE OPINION THAT BEVERAGE CONTAINER DEPOSIT
LEGISLATION CAN NOT BE THE SOLE ANSWER TO THE PROBLEMS OF AN
EVER INCREASING WASTE STREAM AND DIMINISHING DISPOSAL ALTERNATIVES.
HOWEVER, A "BOTTLE BILL" IS THE MOST VISIBLE AND EASILY UNDERSTOOD
CONCEPT OF WASTE REDUCTION; AND THE RESPONSIBILITY FOR RECYCLING
IS SHARED AMONG CONSUMERS, RETAILERS AND MANUFACTURERS.
-------
A BOTTLE BILL IS ONE FACET OF A COMPREHENSIVE SOLID
WASTE MANAGEMENT PLAN AND CANNOT BE CONSIDERED AN "ALTERNATIVE"
TO HIGH TECHNOLOGY RESOURCE RECOVERY, BUT SHOULD BE A "COMPANION"
TO SUCH EFFORTS.
EVEN PACKAGING LEGISLATION IS COMPATIBLE WITH DEPOSIT
LEGISLATION WHEN VIEWED AS PART OF A SOLID WASTE DISPOSAL AND
RESOURCE RECOVERY PLAN; A PROBLEM WITH MANY ROOTS NEEDS A SOLUTION
WITH MANY ASPECTS.
RHODE ISLAND FEELS THAT A FEDERAL BEVERAGE CONTAINER
DEPOSIT LAW SHOULD BE AS UNCOMPLICATED AS POSSIBLE IN ORDER
TO ENSURE COMPLIANCE.
THE DEPOSIT SHOULD BE NO LESS THAN FIVE CENTSPER
NTS^PE
S ./yTH
CONTAINER, AND SHOULD BE UNIFORM FOR ALL CONTAINERS ./yTHE DEPOSIT
SHOULD BE HIGH ENOUGH TO ASSURE HIGH RATES OF RETURN. ALL
DETACHABLE, FLIP TOP CANS SHOULD BE BANNED. STANDARDIZATION OF
CONTAINERS IS NOT NECESSARY. THE LAW SHOULD APPLY ONLY TO
BEVERAGE CONTAINERS.
HE DEPOSIT SHOULD ORIGINATE AT THE RETAIL LEVEL, AND A
RETAILER SHOULD BE REQUIRED TO ACCEPT RETURNS ON TYPES OF
CONTAINERS HE SELLS; BUT SHOULD NOT BE REQUIRED TO ACCEPT THOSE
HE DOES NOT STOCK.
WE FEEL THAT REDEMPTION CENTERS OTHER THAN RETAIL
ESTABLISHMENTS ARE NOT NECESSARY AND WOULD ONLY BE AN ADDITIONAL
EXPENSE.
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THE BENEFITS OF A DEPOSIT LAW ARE MANY; AND MOST OF
THEM HAVE BEEN MENTIONED BEFORE. THE ENVIRONMENT WOULD BENEFIT
DIRECTLY THROUGH THE REDUCTION OF LITTER AND THE NEED FOR
LESS LANDFILL SPACE. INDIRECTLY, IT WOULD REDUCE THE NEED FOR
VIRGIN MATERIALS AND SAVE MUCH NEEDED ENERGY SOURCES FOR OTHER
USES.
A BOTTLE BILL WOULD ALSO AID IN THE DEVELOPMENT OF A
"CONSERVATION ETHIC" AMONG CONSUMERS THAT WOULD AFFECT THE
CONSUMPTION AND CONSERVATION OF MATERIALS IN THE FUTURE, AN AJM
THAT PRESIDENT CARTER HAS PLACED HIGH ON HIS LIST OF PRIORITIES
IN DEALING WITH THE PRESENT ENERGY CRISIS.
THERE ARE ECONOMIC DISADVANTAGES THAT MUST BE ACKNOWLEDGED.
RETAILERS WILL UNDOUBTEDLY INCUR EXPENSES FOR THE STORAGE AND
HANDLING OF THE RETURNABLE CONTAINERS^/BUT/^HERE IS THE
POTENTIAL FOR RETAILERS TO RECOUP SOME>W THEIR LOSSES SINCE IT IS
IMPROBABLE THAT THE RETURN RATE WILC BE ONE HUNDRED PERCENT.
IjOBS WILL BE BE LOST IN THE CONTAINER INDUSTRY, BUT
in n ill ilium DEPOSIT LEGISLATION WILL GREAT NEW JOBS FOR THE HANDLING
OF THE RETURNABLE BOTTLES.
IT HAS BEEN PROVEN IN OREGON AND VERMONT, THAT THE USE
OF RETURNABLE CONTAINERS EVENTUALLY LOWERS THE RETAIL PRICE OF
THE BEVERAGE.
BUT THE COSTS WILL DROP ONLY IF THOSE INDUSTRIES INVOLVED
IN THE MANUFACTURE AND BOTTLING PROCESS ALLOW FOR THE MARKET TO
OPERATE M>BBIi¥. THERE IS A FEAR ON OUR PART THAT INDUSTRY WILL
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My name is Mary Jo Salmon. I am a student intern here in
Washington, D.C. aa a oooond oemojtar juiiluv from St. John Fisher
College^Rochester, New York.
The issue of federal beverage container deposits addresses
itself to a series of interrelated environmental concerns, namely;
reduction of litter and solid waste and the conservation of natural
resources and energy, "ith another winter fast approaching and
vivid recollections of last^year's energy crunch, X would like
at this time to speak about wasted energy in regards to throw-
awaya vs. returnables.
A throwaway container is representative of wasted energy.
All the energy required to manufacture and transport a one way
is lost after only one use. In a reflllable bottle system the
energy necessary to create the container is expended once, to hoP^i"' *i
be used for an average of 15 trips. After that;the container
acts as its own recycling system, a closed loop in which energy
is used only for handling, transporting and washing. That consideration
becomes highly significant after reviewing some data on the energy
used to produce throwaways. SCAT, Sensible Citizens Against
Throwaways has estimated that 211.5 trillion BTU of energy are
wasted annually in this country producing throwaways. More recent
E.P.A . figures put the energy waste at 21(14. trillion 3TU annually;
°r «3$ of total U.S. energy use. Perhaps Thomas Klmball, executive
vice-president of the National Wildlife Federation put all these
figures in tfe4tr best perspective when he pointed out that:
in iUll alone
"the energy wasted on beer and soda containers in t"t UO-
exceeded the combined energy requirements of
15 countries in Africa, Asia and Central America."
-------
At this point, we move from a strictly environmental concern.
to a moral question. Do U.S. citizens, "the haves" of a closed
life support system, possess the right to squander energy in the
name of luxury and convenience?
Instituting the use of refillable bottles and recyclable
cans via deposit legislation, would represent an important step
towards the restructuring of attitudes towards energy consumption.
On a more pragmatic level, deposit legislation appears to be the
most sensible and simple way to save energy, money and materials.
For example, the S.P.A.'s lj.th Report to Congress, states that
container legislation would uouia reduce energy consumption for
the beverage container industry by 21^5 trillion BTU per year.
That is equivalent to a savings of 125,000 ( one hundred and twenty
five thousand) barrels of oil per day. And ,/hile the P.E.A.'s
estimate figures are lower, due to consideration of technology
changes, they still account for reductions in energy consumption
for the beverage industry of 1^. percent.
It seems to me, that in a time when our resources are fast
depleting and energy consumption is geometrically growing, we
need to stopjto reevaluate our com-ion bonds with the other inhabitants
of this planet. Energy conservation must become an important
part of everyone's daily life and national deposit legislation
would ensure more efficient conservation results, in a relatively
short time.
Based on those energy considerations I have briefly outlined,
I urge the Resource Conservation Committee to recommend to the
.Pre.ajld.8a6..and Congress that national deposit 14gislation be endorsed
and specific container legislation adopted.
ThanWyou
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Testimony of the Sierra Club, Presented by
Roger McClure, at the October 19, 1977 Public
Meeting of the Resource Conservation Committee
Regarding Potential Federal Legislation tor
Beverage Container Deposits.
Will ioX~".s, tef^-h" faL*™*} >ii7W
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-2-
Yes, There will be some small dislocations in the metal
and glass container fabricating industries. But we can solve
this by a special Labor Department program designed to help
any individuals or companies hurt. I also recommend that the
program be effective two years after enactment by Congress so
that industry can plan to smooth out any transitional problems.
President Carter: Wonderful. Tell me, what is this program?
The program is to establish a minimum 5/ return deposit
on all metal, glass and plastic containers of beer, soft drink,
mineral water and fruit juice. Businesses would be free to
have higher deposits for large containers if they want to.
Because it would be a nationwide law for all these container
types, beer and soft drink distributors would not be harassed
by standards which vary from state to state and no particular
group of companies would be unfairly disadvantaged in
comparision to competitors. Also, we would prohibit pull
tabs which are a serious safety hazard particularly for children.
President Carter asks: I like the results of this program,
but wouldn't it require the federal bureaucracy to invade
the lives of Americans into their very refrigerators?
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-3-
No, Mr. President, that is one of the best things about
this program. It uses the free enterprise system and the
individual's own self interest to make sure it works. Companies
and people will return the containers because they would be
worth 5jz! each. You certainly must remember collecting pop
bottles as a kid to get a few pennies to go to the store.
This program brings back a good idea from the past to solve
a modern problem.
The Sierra Club hopes that this scene will take place
sometime soon in the Oval office. In brief, the Sierra Club
endorses a mandatory 5& minimum deposit on beer, soft drink,
mineral water and fruit juice metal, glass and plastic containers.
A deposit on other types of containers should be considered after
we have had some experience with a nationwide deposit on containers.
The program should preempt inconsistent state law to avoid
needlessly complicating the business of the soft drink and beer
industry. A tax on unrefunded deposits would burden the
administration of the program and would harass the beverage
industry. The unclaimed deposits would help bottlers and
manufacturers to make the transition back to deposit containers.
Finally, the deposit should begin at the beverage-producer or filler
stage because these are the businesses most -likely to be able to
reuse returnable containers. The staff draft papers very ably
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Society of American Travel Writers
1 1 2O CONNECTICUT AVBNUK, 8UITB 9AO, WASHINGTON, O.C. 2OO36
(2Oa) 785-9987
October 14, 1977
Susan B. Mann, Public Participation Liaison
Resource Conservation Committee
U.S. Environmental Protection Agency
401 M. Street, SW
Washington, D.C. 20460
Dear Ms. Mann:
Your September 27 letter concerning hearings on Beverage
Container Deposit Legislation just reached my desk yesterday and,
while I will be out of the city next week, it is important that
the views of our Society of American Travel Writers be made a
part of the record on this important matter.
Our organization of nearly 700 members who, representing both
the print and electronic media, has been concerned about our environ-
ment and it was for that reason the Conservation and Preservation
Committee was established more than ten years ago.
At our 1976 convention SATW adopted a resolution in support
of pending legislation to help clean up America's natural resources.
The resolution will place the Society of American Travel Writers on
record in support of your objectives and if sufficient time can be
granted for ammendments to this testimony, we will make every effort
to present our views on additional questions raised by your commi-
ttee.
Glenn T. Lash ley. Vice cKAirman
Conservation & Preservation
Committee
1730 Pennsylvania Ave., NW Suite 300
Washington, D.C. 20006
GTL:jw
Enclosure
OFFICERS—Ben F. Cirrutrtars. Prmldent, Travel Editor, Essence Magazine, New York. NY; Bill Hibbard, President-Elect, Travel Editor, The Milwaukee Journal: George R. Bryant
Wee President. AMoclate Travel Editor. The Toronto Star Leonard Scandur Secretary, Travel Editor. New Yor
WHIO-TV, Dayton, OH, BOARD OF DIRECTORS—Henry E. Bradshaw, Chairman, Travel Writer. Weal DOS Moine
se. H
Keati. , . ,
er, New York. NY; Jeanne Westphal. Organization o
ADMINISTRATIVE COORDINATOR—Ken Fischer.
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RESOLUTION
WHEREAS: The refillable bottle is making a comeback across
the country as more and more cities, counties and
states pass laws which require a deposit on all
beverage containers;
the proliferation of one-way throwaway beverage
containers places a heavy and unnecessary burden
on our national evergy resources;
it would help clean up America's roadsides, trails,
beaches, parks, streams and lakes which too frequently
are littered with beer cans or broken bottles;
about three billion no-return beverage containers
(20 - 40% of all litter) are dumped as trash on the
roadsides of America;
The Management and Behavioral Science Center of the
University of Pennsylvania's Wharton School of
Finance evaluated the Keep America Beautiful programs
and other industry-sponsored anti-litter efforts,
concluding that neither significantly reduced litter
nor showed promise of doing so;
a national Bottle Bill could save the equivalent of
2 to 4 million gallons of gasoline per day;
preservation of wildlife, natural resources and en-
vironmental quality will be enhanced with passage of
throwaway legislation;
THAT WE THE MEMBERS OF The Society of American Travel
Writers endorse and actively support Bottle Bill
legislation—a small deposit will bring a large
return.
By Formal Action of the Society of American Travel Writers, this
fifteenth day of October, 1976 on the occasion of
the Annual Convention — Guadalajara, Mexico.
AND WHEREAS:
AND WHEREAS:
AND WHEREAS:
AND WHEREAS:
AND WHEREAS:
AND WHEREAS:
BE IT RESOLVED:
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Projected Employment Dislocations
Caused By
National Deposit Legislation
Submitted by: Stone, Glass and Clay Coordinating Committee, AFL-CIO
The Stone, Glass and Clay Coordinating Committee consists of
seven International Unions affiliated with the AFL-CIO. Five of
the Unions represent workers involved in the manufacture of
beverage containers: the Aluminum Workers International Union, the
American Flint Glass Workers Union, the Glass Bottle Blowers
Association of the United States and Canada, the United Glass and
Ceramic Workers of North America, and the United Steelworkers
of America. Our interests will be confined to conclusions drawn
from several beverage container studies with regard to employment.
All studies examined importantly acknowledge that national
deposit legislation will result in tremendous job losses in
bottle and can manufacturing; any projected job gains would be in
retail and distribution, causing a shift from high-skilled, high-
paying jobs to relatively unskilled, low-paying jobs. We maintain
that these so-called job gains are merely job trade-offs, since
any increase in the handling end would be made at the expense of
the manufacturing sector. We also question whether there will be
an actual increase in jobs, because some studies indicate that
additional work hours required for handling will not necessarily
result in the hire of additional workers.
A 1976 Federal Energy Administration study. Energy and
Economic Impacts of Mandatory Deposits, concludes a job loss of
38,000 - 49,000 in beverage and can manufacture; a gain of
156,000 - 166,000 in retail and distribution; and a total net
gain of 118,000 - 117,000 respectively. The study recognizes
the job shift, pointing out for the lower estimate a 32% increase
in total employment while only a 22% increase in labor income.
It says this is due to reduction in average earnings per employee
since jobs gained are generally less skilled and lower paying than
those in the original job structure. The study admits that the
complete set of impacts for cost-benefit evaluation of mandatory
deposits on a national scale may not have been analyzed. We
maintain that the gain estimates have not considered variables
such as unpredictable behavior patterns in retailing. Cases in
point follow.
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The one-way system is labor efficient, and gain estimates
assume that job increases result in a returnable system due to
increased labor requirements in handling. However, a 1977
study by the University of Connecticut, Job Aspects of a Bottle
and Can Beverage Deposit Law in Connecticut, contradicts that
assumption by reporting the following about grocery stores:
A survey of six stores in central Vermont found
that none of the stores hired any additional workers
for this purpose (handling returnables) after enact-
ment of their bottle bill. Five of the six stores
added extra hours to their part time workers while the
sixth, a small store, absorbed these tasks during
their regular work hours. They indicated that handling
returned bottles took from 2% to 3% of their total work
time. A survey of six stores in central Connecticut
found that, in the event of a bottle bill, five would
not hire any workers but would add hours to their
current workers. The sixth, a small store, would hire
a part time youth for a few hours a week to handle and
sort bottles.
A survey in Oregon found that stores added from
1% to 183% of their working time to handling increased
returnable bottles under their bottle bill...the total
time on returnables would be around 2%.
As is evident, additional work time does not mean jobs.
The Impacts of National Beverage Container Legislation,
prepared by the Department of Commerce in 1975, estimates a
•job loss of 82,000 (22,000-bottle manufacture, 35,OOP-can
manufacture, 25,000-metals & fabrication); a job gain of
95,000 - 115,000 in retail, distribution, beverage production
and filling; and a net gain of 13,000 - 33,000 jobs. The
study points out that can and bottle manufacturing will be
seriously affected in terms of unemployment and states that
"jobs gained are generally lower paying to the extent that
the average hourly wage rate of each individual added in
processing, distribution and sales is only 80% of that of
each individual displaced in metals, glass and container fabri-
cation." Also acknowledged is the difficulty in estimating
additional workers required_to support a refillable system due
to unpredictable reactions of bottlers, retailers and distributors.
The analysis gives as an example the possibility that some outlets
will absorb additional labor requirements with existing workers.
In addition. Commerce cites adverse economic impacts such as job
losses as a reason for not recommending enactment of national
container legislation.
—2 —
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Barbara Blum, Chairman of the Resource Conservation
Committee's Senior Advisory Group, referred us to an "EPA
Analysis Based on 1972 Data Provided by Research Triangle
Institute." Job estimates were given at 164,000 gained and
82,000 lost, for a net of 82,000. Since we were unable to obtain
a copy o"f this analysis from EPA, we will refer to a statement
made by Eileen L. Claussen, also of EPA, in a speech to the
California Legislature Assembly Committee, December 1973.
Based on Research Triangle data, Ms. Claussen mentioned the
importance of recognizing that with national container legis-
lation any increase in total jobs would be lower paying than
those lost and would likely result in a net loss of labor
income.
A 1976 Wharton School study. The Impacts on the U.S.A. of
a Ban on One-Way Beverage Containers, estimates 38,000 glass
and can manufacturing "jobs lost and 93,000 gained in retail and
distribution, a net of 55,000. To note the nature of the job
shift the study acknowledges that jobs eliminated would be
skilled and those created of the unskilled variety.
In conclusion, all of these studies estimate tremendous
job losses in beverage container manufacture — from a low of
36,000 to a high of 82.000. All acknowledge job shifts, and
there is evidence to support that job gain estimates may be
overestimated. Since our affiliates involved in the manufacture
of beverage containers are faced with either unemployment or
lesser jobs at lesser pay, we see nothing to be gained from job
trade-offs and, therefore, are strongly opposed to enactment of
national deposit legislation.
-3-
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Solid Waste Policy
RESOLUTION NO. 20—By Delegates Vernon E. Kelley, H.
Max Webster, Eddie R. Stahl, Henry S. Olsen, Matthew Davis,
Aluminum Workers International Union; Thomas F. Miechur,
Richard A. Korthrip, Joseph J. Knapik, Kent Weaver, Toney
Gallo, United Cement, Lime and Gypsum Workers; United Glass
and Ceramic Workers; George M. Parker. Ivan T. Upcapher,
John Gettys, David Pierson, William J. Edwards, American Flint
Glas.s Workers Union; Harry A. Tulley, James E. Hatfield, Lee
\V. Minton, Stanley Brown, Edward L. McMahan, Stanley Levy,
Glass Bottle Blowers' Association; S. Frank Raftery, Michael
DiSilvestro, L. M. Raftery, Ernest Seedorf, Peter Yablonsky,
James Damery, Walter Zagajeski, Mr. R. Cook, Painters and
Allied trades; Lester H. Null, Sr., Philip Cohen. Edward Kaaper,
Fred Tanner, Pottery and Allied Workers; 1. W. Abel, Walter
J. Burke, John S. Johns, Roy H. Stevens, Mitchel F. Mav.uca,
Hugh P. Carcella, Edward E. Plato, Wm Moran, Joseph Odor-
cich, Kay Kluz, Homer E. Bussa, Frank Lescnganich, Joseph J.
Kender, Charles Younglove, H;irry O. Dougherty, Bertram Mc-
Namara. Lloyd McBride, M. C. Weston, Jr., Howard Strevel,
James K. Ward, United Steelworkers of America.
WHEREAS, A clean environment and full employment are not
incompatible; in fact, they can and should RO hand-in-hand, and
WHEREAS, The AFL-CIO position is especially pertinent in
relation to the twin problems of solid waste disposal and deple-
tion of valuable natural resources The answer to these com-
panion problems lies in transforming waste into usable products,
and
WHEREAS, The answer does not lie In proposals to ban dis-
posable cans and bottles or to curtail use of certain materials.
These proposals are really "non-solutions." By disrupting indus-
try and causing heavy losses of jobs, more problems would be
created than solved, and
WHEREAS, the AFL-CIO opposes legislation—at any gov-
ernment level—which seeks to resolve this problem by restrict-
ing the sale or use of non-returnable containers, regardless of
the unemployment and other negative consequences, and
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WUKKKAS, the AKL-C10 endorses a policy of maximum re-
source recovery and energy conservation as they offer the only
meaningful solutions to the nation's solid waste disposal needs.
Accordingly, expanded resource recovery and energy conserva-
tion should be encouraged, in conjunction with present disposal
methods, through the establishment of policies and programs
compatibly with national employment, environmental, and energy
objectives ^therefore, be it
RKSOLVE1): In order to meet these policy objectives, this
Convention recommends that the Congress take positive action
in supporting legislation which would include the following pro-
posals:
(1) promote the demonstration, construction, and application
of solid waste management and resource recovery and energy
conservation systems which preserve and enhance the quality
of air, water and land resources;
(2) provide technical and financial assistance to states, local
governments and interstate agencies in the planning and devel-
opment of resource recovery, energy conservation and solid
waste disposal programs and facilities;
(3) promote a national research and development program
for improved techniques, more effective organisational arrange-
ments, and new and improved methods of collection, separation,
recovery and recycling of solid wastes, and the environmentally
safe disposal of non-recoverable residues;
(4) provide for the promulgation of guidelines for solid waste
collection, transportation, separation, recovery and disposal sys-
tems ; and
(5) provide for training grants in occupations involving the
design, operation and maintenance of solid waste disposal and
energy conservation systems, and be it further
RKSOLVKU: That this convention endorses these proposals
and urges Congress to implement these solutions with sufficient
funds to solve the problem of solid waste disposal through re-
source recovery and energy conservation.
Referred to Committee on Resolutions.
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STATEMENT
BY
ARTHUR H. PURCELL, PhD, DIRECTOR
TECHNICAL INFORMATION PROJECT, INC,
BEFORE THE
REOURCE CONSERVATION COMMITTEE
19 OCTOBER 1977 PUBLIC MEETING
Technical Information Project (TIP) appreciates the opportunity to
make a statement before this important meeting. TIP is a non-profit
research, education, and consulting group incorporated in the nation's
capital. We specialize in resource conservation and environmental policy
areas. My name is Arthur H. Purcell, and I am Director of TIP.
As a member of President Carter's 1976 Science Policy Task Force, I was
greatly concerned over materials conservation issues, including manda-
tory deposit, or "bottle bill" approaches to materials conservation. It
is a pleasure to see that the Resource Conservation Committee has taken
the effort to hold this public forum on the "bottle bill" issue.
TIP is vitally concerned with the subject of waste reduction and energy
conservation. The national network of citizen leaders we have generated
through our on-going "Citizens and Waste" workshop series across the coun-
try shares this concern. Over the past two years TIP has had the oppor-
tunity, with EPA support, to conduct a series of forums in nine major
centers of the country where citizen leaders have come together for in-
tensive information exchange and interaction on national, regional, and
local waste issues. In every one of these sessions the "bottle bill"
has been a prominent item of discussion.
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Purceii - 2
The workshops have documented and reinforced important pieces of evidence
in the "bottle bill controversy." It is now clear that:
*Bottle bils do save energy
*Bottle bills do conserve materials
*Bottle bills do decrease environmental degradation
It is equally clear that:
"Citizens everywhere are willing to try returnables again
"Citizens want the option of returnables. They don't want to be
told by beverage container makers or distributors: "You want throw-
away s and this is what you're getting."
Finally, and very importantly:
"Bottle bills dp_ cause economic dislocations. But argument goes on
ad If initum as to whether the overall effect is positive or negative.
Some beverage industries have increased business through bottle bills.
Some have lost. Some recyclers feel hurt by bottle bills. Some have
benefitted. Some people have lost jobs. Some have gained.
As we have gone across the nation, I have perceived adversaries in this
issue starting to find common ground. I have seen environmentalists very
worried about jobs that might be lost through bottle bills, and I have
seen industrialists worry about the energy waste inherent in throwaway
products. Simply stated, I have seen citizens of all orientations think
seriously about the need for the kind of measures for energy and materials
conservation entailed in national mandatory deposit policies.
The Resource Conservation Committee can make a vital and lasting contribu-
tion to resolving the mandatory deposit issue by fostering the nuclei of
cooperation that is sprouting across the country. It can take steps to
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The United Steelworkers of America, representing some more
than 65,000 workers engaged in the production of convenience
beverage containers, has continuously opposed any beverage con-
tainer deposit legislation as a response to the litter problem.
Imposing a selective deposit system on the beverage con-
tainers would be a discriminatory action against but one element
of the myriad of products that make up our solid waste system and
especially is discriminatory against Steelworkers. Many of our
members then would pay for the legislation with their jobs. It
is manifestly wrong for the national government to entertain or
propose any such restrictive scheme which would impose such dis-
proportionate burdens on already impacted workers without the most
compelling of reasons. While litter reduction is a desirable goal,
no one should seriously entertain any argument that litter is such
a compelling necessity that the reduction should then be secured
with the expenditure of over 60,000 jobs of our members.
Presently, the national economy still staggers along at better
than 7% level of unemployment and the national government seeks to
promote or enact legislative programs to expend billions in job
creation. In contrast, the government may also propose the high
potential of elimination of employment opportunities. This would
be economic folly. Presently, there are over 15,000 Steelworkers
employed in steel mills directly engaged in the production of tin
plate for beverage containers. There is almost a like number of
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- 2 -
Steelworkers employed in the manufacture of aluminum for the con-
venience containers. These are coupled with an additional 33,000
highly skilled, highly productive workers in the capital intensive
can manufacturing industry.
Remember these are jobs that pay nearly $10 per hour plus fringe
benefits of pensions, vacation, holidays, making these employees con-
structive citizens, taxpayers at the national, state and local
levels. The proponents of shortsided deposit legislation know that
the chief deterrent to enactment is the job issue and now attempt
to circumvent this critical issue by the presumptive creation of
low-level entry type and dead-end jobs, below, at, or near the
poverty level. There is no meaningful tradeoff of quality jobs against
these type of jobs.
Alternatives; There are presently constructive ways to rectify
the litter problem to recover solid waste products for re-use, and
to create jobs -- meaningful and productive jobs.
The passage of the Resource Conservation and Recovery Act of
1976 is the vehicle for recovering the nearly $2 billion worth of
metal annually discarded. Technology is on stream and rapidly
developing and is feasible to recover not only metal but other
materials which represent under utilized resources. These materials
are now put into the ground. We now see the imminent retrieval of
such materials, in addition to the utilization of significant
quantities of solid waste as energy sources, along with the elimina-
tion of safety and health hazards in the open dumps.
The Administration's thrust for a full employment policy would
be carefully and constructively directed to full support of and
funding of the resource recovery recycling concept. The job
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12303 Stafford Lane
Bowie, Maryland 20715
October 26, 1977
Ms. Barbara Blum
401 M Street SW,
Washington, U.O. 20460
uear Ms. Blum:
Attached is my written statement on tlie issue of deposit
legislation. 1 am for a deposit to save materials and energy; the
natural gas used to make "throwaways" is lost and cannot be used to
make carpets or another product. We have to economize somewhere
and luxury products are a likely place to begin.
1 vvish to maice two points, apart from support of required deposit.
i'irst, your committee touches on pull-tabs. These objects have already
caused several infant deaths. They should be banned as soon as
possible. If the national Pf^o'^ut Safety Commission or any other
group can move faster in this area, you should defer to' them. If
no other Federal group will remove this menace, I wish y" igP^BBM^
Second, this is not typed by a professional typist as X cannot
afford one. You may not be 5yS«yeof the tax laws which allow
special interest groups and artificial persons to aeduot the cost
of testimony but do not allow this to individuals. Ihough the
implementation plan of your committee stresses public participation,
the government penalizes the public if they participate. I do not
mind giving my opinions and I am sure other citizens are concerned
with the issues. I do not wish a tax deduction for time lost and
expences incurred, but it galls me to see the heirlings of
corporations appearing in droves with documents prepared that are
all tax deductible and ultimately at my expence. Shis is far from
the issue of aihrowaways" but I do not see why a democracy should
have one set of rules for real people and a more favorable set
for artificial persons.
Required deposit has been on my mind for nearly eight years. If
my experieae will aid your deliberations, please do not hesistate to
call up me. Sincerely yours,
$(/£,£\fat..(.-^
Ellis L. .Xochelson
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October 26, 1977
12303 Stafford Lane
Bowie, Maryland 20715
Written statement of Kllis L. Yochelson to the Resource
Conservation Committee H£ federal Beverage Container Eeposxt issue.
l thank the Committee for the opportunity to speak and to submit
a written statement. During preparation of this statement my
attention was directed to a full page advertisement by the
Continental Group which appeared on p. A 28 of the Washington Post
October 24, 1977. This ad contains the following words" And all
packages will be designed so that their basic materials can be
easily recovered and used again". The key word here is can. The
Continental Group does not use the word will. As an example of
similar thought many bags in supermarkets are imprinted with the
words" Made of recyclable paper". There is no paper in this world
which is not capable of being recycled; indeed I know of no object
in this world which is not capable of being recycled. In fact all
material is in movement, though on a geologically long time scale.
The issue is whether material will be recyiledin a realistic time
frame.
This ad vert isment harks back years to ads by American Can Co. on
•How to recycle a can". There was much ballyho and little substance.
I have been involved with this issue for 74 years and was responsible
for the first law to be passed since the "ttarth Day" interest in
this issue. As a consequence I have testified at and attended
many meetings on this issue at the city, county, state and federal
level. What is exceedingly disappointing is that industry has not
offered anything new, either in data to refute the findings of
those who desire to implement a required deposit, or viable
alternatives. Industry appears determined to maintain the status
quo until such time as there may be a "total solution" to all
aspects of the problem of solid waste. 1 judge a "total solution"
to be naive or more likely ingenuous. My experience is that
industry spokesmen tend to obfuscate.
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2.
However, one point of industry testimony
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3.
recover the cans in the most economical way, or that the company
is more interested in the publicity surrounding recovery of the
cans than in the cans themselves, or that the entire operation
like that of American Can Company advertising of earlier years
...is advertising ballyho, easy to indulge in for it is a tax deductible
expence. It is certainly possible that there is some logic here and
that my fears are groundless, but if Heynolds is paying out money
for objects which it can obtain for free, this is a most remarkable
event. Mo doubt the company should receive a, citation from the
government for altruism, though were 1 a stockholder I would dp
my best to obtain a legal citationaggainst the current management,..
No comment need be made on any of the other testimony
presented by industry.
The draft report dated October 11 was not available to me prior
to the hearing on October 19 and in no way affected my oral comments.
Having now read it, I commend the staff on a clear accurate suippary.
I would speculate that in backrouncl paper if2 the assumption of Mix
#1 is more accurate. Cans do have some advantanges andprobably
for the next decade these advantages will outweigh;.ever-increasing
container costs. It might be noted that the last decade has'seen
a major change in the can market. Steel cans for beverages, as used
in the context of this legislative area, virtually no longer exisf,
and in spite of the technology of the extruded steel can, the bimetal
can is clearly failing before the onslwii of the all aluminum can.
During this adjustment of market place, there has not been any
compensation for manufacturers of steel cans, 'i'his has certainly
worked a hardshipon some employees. The role of the government
should be to help real persons. Corporations are artificial
persons. They should be allowed to expire if they make the wrong
decisions. The role of governemnt is not to prop up corporations
but to care for the rights of the individual.
Staff paper #3 lists issues under design issues, impact evaluation
estimates and alternatives. These should be discussed briefly.
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4.
Under alternatives, none listed appear as satisfactory. In
particular 4 and 5 which urge further study (further delajr> and
further demonstration programs (futher squandering of tax dollars)
are to avoided. Sufficient information, should be available to show
the merit of required deposit.
Under impacts, it might be helpful to have a. measurement easy to
visualize. My calculation is that standing the cans and bottles
for beer and soft drinks besides one another indicates that each
individual empties enough each year to ocaupy 9 square feet. In
terms of Prince Georges County, Maryland, this indicates a rate of
paving by throwaways of one square mile in less than four years.
Under design issues, 1 shall comment very briefly.
i. Materials for containers is not the issue. For the present
required deposit should be limited to beer and soft drinks, both
luxury pro duct s.
2. A simple system is much to be preferred. All containers of
the same size should have the same deposit, and the larger the
container the larger the depaoit.
^. the further back in a chain the responsibility is placed
the more effective. At the very least it should be at thewwholesaler.
Were container companies required to post the deposit they would be
particularly interested in how well the system works.
4.. As has been shown by the recent events in Fairfax County,
when given a phase—in period, industry failed to use it and when
faced with obeying the law, they were able to mark containers! I
suggest six months as a resonable time to implement a law. I do
not think industry should be compensated for windfall losses. The
Federal government did not order throwaways, rather the industry
foisted them on the American public. Unrefunded deposits should
not be taxed. In my view they should be left in the system up to
the wholesaler. If a depaeit is placed on the manufacturer, the
unrefunded deposits should revert entirely to the Federal Treasury;
that way the manufacturer will not make a windfall profit.
5^ Pull-tabs should be banned regardless of other aspects.
Health is not directly related to energy or to resource conservation.
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With a throwaway six pack the paper container is discarded after
one use. With refillable containers the paper carrier is used an
average of four times. The paper box for throwaways is discarded,
whereas the case for refillables is used hundreds of times. I do
not think that the associated packaging should Toe subject to
legislation at this time. If there is a gradual shift to refillables,
there will be a reduction in the trash associated with one=use
throwaways. She banning of plastic cone carriers is not allied to
required depMit, but is concerned with public safety, especially
of animals' who have been strangled by these objects.
I think that in the issue of beverage container regulation
the states have been in the lead and the federal government badly
lagging. The federal government should impose minimums and allow
the states full liberty to experiment in this area. Thus Oregon and
Vermenot have tested the concept of a required deposit as it applies
to beer and soft drink containers. Worth Dakota now proposes to
apply the required deposit to Bilk containers. It would be wicked
to write a federal law which limited the size of the deposit or the
class of prwdnagesto which it could be applied. I can forsee a
future in which most containers will have to be recycled, but I
prefer a limited start today to a more comprehensive law some
time in the nebulous future.
Because the National Commission on supplies and shortages
has endorced a required deposit as a way of alleviating some
shortages and because the federal Energy Association has endorced
a required deposit as a way of saving some energy, I fail to see
why further study is needed.
fiven if a required depositdwould not save significant amounts
of energy or material, it would provide incentive to clean up. I
am ashamed to live in a country whose national symbol is the beer
can on the highway*
She invitation to testify at the public hearing contained
eleven questions. I have devoted a page to each, though greater
detail will be supplied if desired by the committee.
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6.
i. What should the Resource Conservation Committee recommend
regarding the development of federal beverage container legislation?
Should the Federal Government set general guidelines or develop
specific container legislation?
1 judge that the KCC should recommend immediate passage of
a required deposit on all beer and soft drink containers. Politics
and ecology are both practical. A required deposit will not resolve
all problems of solid waste,jo;fa1 loss, frivolous expenditure of
natural resources, and squandering of energy. However it will
resolve a portion of each of these problems. Further it can be
done tomorrow and it can be done without spending one cent of tax
revenues. The speed at which an environmental can be implemented
and its cost are both matters of serious concern. If the Federal
go ve eminent can demonstrate an ability to get the beer can off the
highway in a year and at no cost, the general population might have
more interest and more enthusiasm toward the long range exceedingly
expensive projects to clean the filth from the water and from the
air. frankly, if our system is unable to deal with the beer can,
I doubt its' ability do deal with major problems.
Ihe importance of beverage container legislation is in the
concept of a required deposit. Thus it is a general guideline
already. A required deposit serves two important functions.
First it sorts out items on which a deposit is charged from those
on which there is no deposit; it differentiates treasure from trash.
Second, it concentrates the item on which a deposit has been charged
at the place where the deposit is refunded. Sorting and concentra-
tion are the essence of mineral deposits. Once material is avail-
able in a concentration - either virgin ores or scrap— a market
is necessary. 1'he beverage industry has a system for delivery of
full bottles and reuse of empties. In a sense the required deposit
on beverage containers reinforces an existing system. The principle
may be extended to other products as soon as the market is developed.
Were there a requirement that automobiles be made of the scrap of
old cars, a required deposit on cars would the ideal way to insure
they went to junk yards and were not abandoned. Junked autos and
junked beer cans are trash.
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7.
2. ihat alternatives to beverage container deposit legislation will
accomplish similar results and what are their relative impacts on
pollution and energy and materials consumption?
In my considered opinion there are no alternatives*
As regards natural resources, we are concerned with concentrations.
Trash is trash because it is an admixture of various components; any
one of the components sorted out has value. So long as we make items
and discard them with other itmes, we take concentrations of natural
resources and squander them. By reducing the number of containers
(with refillables) or by saving the scrap (from one-use containers)
we cut down on waste. Pollution like the poor will always be with
us if we have any Biiilization whatsoever for afterall civilization
is the imposition of man's way on nature's way. We can reduce poll-
ution and I hild it is better to reduce by a tiny fraction today than
do nothing. So far as energy is concerned, it is obvious that every
product consists of material and the energyogf manufacture; once a
product is discarded both are lost. A throwaway is a total waste.
Recycling of material saves some energy. Reuse saves a great deal
more.
Presumably this question is devoted in part to litter pickups
and industry propaganda. Litter pick-up will go on forever so lang
as there are volunteers. The 45 million dollars or more spent annually
by Keep America Beautiful and the 10 million dollars or more spent
annually by Pitch In do not seem to be accoumplishing much. They
have both been in operation for a number of years and -yet there are
still beer cans on the highway. A required deposit will cut down on
the number of beer cans on the highway and make it worth while to
pick up those that are dumped. Pools will trfcow away items of value
and prudent folk will pick them up.
This alternative may also apply to "total" solutions to the
trash problem. One may pick Franklin, Ohio at a price of $25,000
per person for a system which will not sort glass by color-anongs
other things it won't do- or one may pick the city of Baltimore
pyrolysis plant which won't do anything. I do not mean to downgrade
technology, but if half the bottles and half the cans were not i$
the trash, being removed by a required deposit, the remainder would
be easier to deal with.
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3. Should there be more guidelines for the States to develop their
own respective legislation? If Federal legislation were developed,
should it supersede State and local laws?
The question of guidelines is complex. It will not hurt for
the Federal government to issue suggested guidelines. Ihis was
not an issue eight years ago. Industry obscures the point by stating
how many times this proposed law has been defeated on state, county,
and local level. Like the beer can on the highway it will not go
away. '.The fact that such a law was passed in two states by referendum
in MoVember 1976 and only narrowly defeated in a third, indicates
tjaa-o the population is upset with legislators who are more sympathetic
with special interest groups than with the general good. Suggested
guidelines might lead some legislatures tomodify their priorities.
The problems of energy waste and pollution are enormous and we
must deal with some of the simple ones to learn how to approach larger
ones. Federal guides here would assist the learning process.
She question of state or Federal law is an issue which has
occupied lawyers for two centuries. It is silly toaask that laymen
enter into this area. Nevertheless it might be noted that in some
of Senator Kennedy's efforts to control DHA research he proposed
that the stricter law prevail. Thus those states which took no
stand wauli have Federal regulation of laboratories; those states
which had stricter laws would require even more of DNA laboratories
to protect public safty. In general I judge it to be a good appraach
in many fields for the Federal government to set a fl&or rather
thati a ceiling. For example, the Federal government might impose
a required deposit. Another jurisdiction at the state level might
determine that there should be additional regulation of the
container, as for example the ban on pull-tabs; incidentally it
is obvious that in this area the Federal government has been
derelict in their duty to protect the citizenry from harm. Still
another state might determine that there be a required deposit plus
even more regulation of the container to insure that it is refillable
a multiple number of times. For this issue, my view is that a
uniform minimum deposit should be imposed by Federal law; later
this basic step fran be strengthened.
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9.
4. What are the social aspects and consequences of beverage con-
tainer legislation? What sectors of society will be affected? Can
you identify specific impacts of experiences pertaining to beverage
container legislation?
One would definately require the wisdom of Solomon as a
minimum to answerthis issue. There is also the general point
that every law has at least one unexpected result. I suggest that
if a required deposit on beverage containers were initiated nation-
wide, the consequences for business would be minimal. Affer a few
screams of anguish industry would cope with the regulation and
beer and soft drink sales would be no different from today. Most
persons would take it as a matter of course. A few fieopie might
take heart from it and attempt to resolve another problem through
the route of citizen initiative.
She sectors of society which would not be affected by equired
deposit legislation would be those sectors which do not consume
beer and soft drinks. In general these are groups of re&igieus
conviction against these products. My guess is that less than
1#> of the US population would be unaffected. Even these would be
indirectly affected in having a slightly cleaner environment and
in having slightly more of the nations dwindling fuels saved for
serious purposes.
1 was involved in passage of the first required deposit bill
in the United States. This was in Bowie, Maryland in July 1970.
The ordinance was held up by injunction and went through a tortuous
legal course before being upheld by the Maryland state supreme
court late in the fall of 1974. for one year the City Council of
Bowie refused to enforce the law. They then voted not to enforce
it until similar County legislation was passed. I do know that
those high school students who worked with me and testified for
the original bill had a sense of purpose* I have not talked to
then as to their subsequent feelings. My own sense is that of
democracy denied by government pandering to special interests.
At the same time it pleases me greatly to see the spread of the
concept of the required deposit and the ever increasing number of
concerned citizens upset because such a simple measure is blocked
*& legislatures. I stand in awe of the power of the concerned
individual.
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10.
5. What are the economic conieqnences, both positive and negative,
of resource conservation as it relates to beverage container
legislation or guidelines? Should there be compensation for
economic losses, and if so, how should this be accomplished?
Should any requirements be levied on unrefunded deposits?
Several unrelated subjects have been tied together in this
question. Resource conservation means ran materials and energy.
Virtually 100J4 of bauxite is imported. By recycling aluminum cans
we could save about a half a billion dollars of unfavorable balance
of trade as well as the bauxite. About 1S& of all US electricity
goes into the reduction of bauxite to aluminum ingot. By recycling
cans we save this. About 66 liters of water are required to fabricate
an aluminum can. Some small part of this can be saved by recycling,
About one-third of the nation's iron ore is imported and the same
general considerations of savings apply, though because the iron
industry is larger and more diverse it is harder to evaluate the
share of the can. If this law had any immediate result on the container
industry it would likely be loss of the market for glass"throwaways."
A few persons in glass sand production might loose employment. On
the other hand since bottle manufacture requires much natural gas,
a substantial energy saving would result. By any method of measuring
required deposit will conserve energy and raw materials. I proaame
it is better to save than to waste, but some economic theory is
counter to this concept.
I believe in free enterprise and thus I am opposed to the
.Federal government baling out industry every time there is a change
in technology or every time it is demonstrated that industry is
polluting our environment. So be specific, the pull-tab threw
the manufacturers of can openers into turmoil. Obviously, employees
lost jobs and plants closed. The country survived and I have faith
we could survive the consequences of a required deposit.
She issue of an unrefunded deposit has many ramifications.
The simplest approach is to leave it as windfall profits for
industry. Some people never learn, but over the years I speculate
that the percentage of containers not refunded will decline.
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11.
6. »/hat are the environmental impacts, both positive and negative,
which may occur as a result of beverage container legislation or
guidelines?
Part of this is relatively simple to reply to. Bitter experience
in many fields suggests that guidelines are one of the most ineffective
devices ever conceived by man. Guidelines have no power. Either
a government should allow a system to be totally free or a government
should act. Ihere is support in the constitution for inaliable
richts of individuals and the need for goverranent to protect these
rights. I do not see where guidelines fit into this scheme.
The environmental impact of legislation will be positive; try
as I may I see no adverse impact on the environment. The decrease
in broken bottles and sharp cans, as well as allied plastic wrapping
will benefit wildlife. Injuries to animals are difficult to quantify
but deaths and injuries are reported repeatedly. Injuries and death
to children have been documented. Surely anymeasure whatsoever which
would reduce the hazard to children should be supported.
In terms of trash the American public faces a crisis. About
5.5 Ibs per day are produced by each person. My estimate is that
4 ounces per person per day may be saved if beer and soft drink
containers were taken out of the trash stream. A far more important
consideration for trash is not simply weight but volume. Beverage
containers occupy a large volume and it is volume which is important
in the rate at which a land fill is completely filled. The develop-
ment of large containers for beverages has certainly been a blow
for municipalities which are faced with the problem of where to
put the trash. This applies whether the trash is collected by
public or private monies. Where to put the new dump is one of
the most serious issues a local government must face.
In might be appropriate to mention the plastic beverage
container. Because 40?6 of the nation's petroleum is imported and
because this percentage is imcreasing, one might wonder whether
manufacturers of throwaway beverage containers oare about the
future of the Dnited States.
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12.
7. Is additional research on this subject necessary prior to a
legislative proposal or tile promulgation of guidelines? What should
laiH research focus upon?
Considerable research has been devoted to the concept of required
deposit. It has been shown that more jobs would be created with a
required deposit than would be lost. It has been shown that much
of the litter is beverage containers; it has beeashawn recently in
the National Park system that a required deposit does reduce this
litter. It has been shown by shopping in local stores that for those
few brands which are available in deposit containers and in "throw-
aways", the beverages in deposit containers are more economical.
Perhaps the single most important study has been that of Harmon
who applied the concept of energy economics to the field of beverage
containers. He found that a very few uses of a refillable container
was more energy efficient than use of "thorwaways". Factors of
collecting, cleaning, and other aspects of the reuse system were
included in his calculations. So the best of ray knowledge this
study has never been refuted; considerable effort has been devoted
to industry in an attempt to refute this study. It might be of
interest to note that Copernius and Newton had considerably less
data at hand than is available for comparison of throwa»aa a?&
required deposit. I cannot see any aspect of the required deposit
issue which has not been investigated.
It is important to recognize that during times of study no
action is taken. By prolonging thetime of study, the action is
delayed. J!hus it is in the interest of those who desire the status
quo to suggest yet another study.
It would make an interesting study to compare the comments of
industry given in the 92nd Congress hearings on Senator Mathias
required deposit bill with those given in this current investigation.
iio far as 1 could determine industry has not added any new data to
strengthen the case for "throwaways" in six years, whereas the case
for required deposit has been steadily strengthened. It might also
be of interest to attempt to determine how much data must be
accumulated Before rational actimuu is finally taken.
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13.
8. What are the key elements that should appear in beverage
container guidelines or legislation?
The key element of any legislation is simplicity and clarity.
This issue has been confused for it has been considered in
terms of cans versCs bottles or in terms of "ban the can." The
basic issue is one of returnables in which the cost of handling
the container is internalized, or "throwaways" in which the cost
of handling the container is forced upon all of society. Thus
legislation should speak to this point.
There ie a secondary issue of whether one should use a
refillable container or recycle scrap. This is an area which
be better left to industry, at least at this time. Logic would
dictate that refillables are better as 30-40#of the price of the
product is in the container and the price of the container is
bound to rise with increasing costs of raw materials and energy
but logic would never have allowed development of a throwaway.
Another point is that the government must move slowly, even
if it must continue to move to protect the rights of its citizens.
Bven God did not attempt to make the world in day. I think it
would unreasonable to expect the government to resolve all problems
of energy conservation and energy waste at this time. It is reasonable
to ask that a first step be taken in a small area. Beer and soft
drinks are luxury products. Life would be a bit poorer, perhaps,
without them, but life would not be seriously disrupted in the
United States. It is irrational to ask for a total solution to
all problems or all aspects of one problem, but removal of half
of the sans and bottles in the United States is a realistic goal.
Industry has considerable experience in rehandling of beverage
containers for beer and soft drinks. It does not have experience
in handling fruit juices, vegetable juices and many other liquid
products. Thus at this time I would limit legislation to certain
classes of drinks. These must be carefully defined.
Leaving aside the precise defination,a law would have two
characteristics. There should a minimum deposit on all containers
which contain certain beverages. These beverages should be beer
and soft drinks.
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14.
9. lo what extent should this committee consider the type of beverage
container charge? Should charges be focused on the type of beverage
or should they be focused on the type of container? Should the
Committee consider containers other than beverage containers?
There are three general classes of charges as I understand this
problem, though my terminology may differ from that of classic
economics. One may place a bounty on containers. The modest payment
given by Reynolds for aluminum cans is an example (my experiments
in collecting cans suggests that one can earn about one-fourth
the minimum hourly wage determined by congress if one can pick up
cans as rapidly as possible and transport them instantaneously
and without cost to a redemption center). One may apply a tax
to containers. For example, the State of Washington places a tax
on all containers. Regardless of the effectiveness of this tax, it
is apparent that this tax is passed on to the general public in the
form of increased prices. It is well known that the power to tax
is the power to destroy (other taxes imposed by the government
seem sooner or later to be paid by the public), finally there is
the approach of money left in escrow, or deposit, or bail. All
leave a bond on future performance (if this performance is met,
the money is returned). The important feature of deposit is that
it is a one time cost and at any time this cost can be returned if
one wishes to leave the system in which this deposit is imposed.
As developed earlier, the issue is not the form of tho container
but the movement of it on a short time span. Nothing is this world
is disposable; it is simply moved from place to place. A deposit
will insure that containers are not left on roadsides or in land-
fills. A deposit makes all forms of containers returnable and does
not stiffle any future developments. Ihe issue is not what the
container is made of, but who pays for moving it from place to
place. Logically those who use the container should pay for its
transport; with throwaways or with a tax the general public will
pay. If a bounty is considered a public service and therefore
tax deductible, the public will still pay.
This committee should consider beer and soft drink containers.
To do otherwise would dissipate the energies of the committee.
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15.
10. What should be the limits on the deposits considered? Should they
focus upon the size, the value of the container, the solid waste
management costs, including litter pickup, the incentive necessary to
insure high rates of return, or other factors? 'fo what degree should
container guidelines or legislation develop requirements on issues
such as pull-top containers, or the standardization of containers?
Hhere in the distribution chain is the best point for a deposit to
originate?
For a deposit, an extrinsic cost, to be effective, it must be
related to the cost of the product. If prices remain constant, a
deposit should remain constant, but if there is price increase- as
seems likely- provision should be made for increase in deposit.
An excellent scheme is used in Prance for wines. There is some
variation but in general the price of the container is half the
price of the contents of the bottle. In the Washington area seven
years ago deposits were 20, they then rose to 5* and in the last
month some companies have increased this to 100. To talk of 50
or 100 places specifics in a general area. If Federal legislation
were to impose a deposit in torms of the cost of the container to
the distributor or the cost of the contents, it would be more
flexible. I would urge that the deposit should be equal to the
cost of the empty container to the distributor, rounded off to the
next highest nickle for ease in computing, i'hus the deposit would
be linked to the cost of ne>/ containers.
If industry wished to have a steadily increasing rate of return,
industry should steadily increase the deposit and thus the incentive
to its return. Costs of litter pickup and other costs are not germane
in setting a deposit.
Pull-tops are an issue of safety not related to solid waste or
energy. They should be outlawed but not under this Committee's
efforts. Standardization of containers is a noble goal to strive
for, but will take years and should not delay a decision on this"1 issue.
The further back in the system the required deposit is placed,
the more effective it will be. At the minimum the oiolesale
distributor should pay the deposit. It would be even more effective
if the manuSacturerepaid the deposit.
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16.
11. If beverage container deposit legislation is to be considered
by the committee, how should its implementation "be developed? To
what extent are cost data available for the variety of State and
local programs addressing beverage container legislation?
'i'he power of the Executive Branch of the Federal government
is liniited.lt can suggest laws to the Legislative Branch. However
the committee is charged with making recommendations on resource
conservation policies. Ihus in my view this committee should
urge the President to recommend to the Congress that they forthwith
pass a required deposit on beer and soft drink containers. She
government has power over Federal lands and has begun to move
slowly toward sale of deposit containers at Federal installations.
Ihe governemnt should use these sales to encourage the general
population toward a required deposit and they should use their
buying power to BBG_ourage those businesses which endorce the required
deposit concept.
2he question of what cost data is available is not germane.
Two states have had in effect required deposit legislation for
some years. In both states attempts were made to change the
legislation by repeal; what actually happened is that the laws
were strengthened. Beer and soft drinks are still available in
those states. Whether the cost is higher or lower seems to have had
no effect on public interest and acceptance of this law. One cast
figure not generally considered is that industry seems to spend
from 10 to 20 times as much as citizens groups whenever the required
becomes a public issue. Another point which seems to escape those
disaussing this issue in the United States is events in Canada.
Required deposit began in 1970 in British Columbia and has spread
eastward at least as far as Ontario. Canadians judge it to be
important. Whether it makes costs higher or lower is secondary.
Kvidence is scattered but suggests that required deposit results
in lower costs.
It has now been three-quarters of a decade since 1 made the
issue of uequired deposit on beer and soft drinks a public concern.
A great deal of natural resources and energy has been wasted since
then on these "throwaways". 1 wish to ask the Committee how much
longer must I wait for positive action is taken to remove this blight?
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Testimony of Judy Zuckerman, Neighborhood Rscyclers
Before the V7ashington, D.C. Public Meeting of the Resource
Conservation Committee. October 19, 1977.
Thank you, Mr. Moderator. Ky name is Judy Zuckernan. I am
the Executive Director of "Neighborhood Recyclers" - a non-
profit, grassroots organization formed almost one year ago
by area residents. They felt recycling would be an environ-
mentally sound, public education project which could
provide a source of revenue for reinvestment in other
neighborhood conservation and development projects.
Currently, we are collecting aluminum, newspapers and phone-
books, and expect to include glass in the near future.
You may be wondering why a recycling organization would be
in favor of a National Bottle Bill. After all, we make our
money from people bringing us their cans and bottles. They
won't bring them to us if they can bring it to the super-
market and get their deposit back.
But Neighborhood Recyclers is just a small group trying to
get area residents into a recycling mode, and educate the
residents as to the whys and hows of recycling. He know
that recycling centers, even on a national scale, cannot
effectively deal with this aspect of the solid waste problem
because the amount recycled cannot possibly be as great as it
would be if recycling containers was a national policy.
The economic incentive to recycle beverage containers is not
nearly as high as the incentive to bring containers back to
the supermarket, after paying a deposit on them. Even
aluminum, the most valuable container material to recycle,
is only worth about 3/fc of 10. Glass brings in even less.
Bringing a. container back to the store brings in 54.
Obviously, people, as well as Scout groups, will have a
much greater economic incentive to bring containers to a
store to have it refilled than to bring it to a recycling
center.
The average person purchases about 300 beverage containers
each year. Saving 50 each, the yearly savings is $15/
person. If they had brought these 300 containers to a
recycling center, and received, J/b of If for each, they
would only have earned $2.25.
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Inconvenience is also a factor a=: to why recycling cannot be as
effective as reusing containers. People have to go out of their
way to get to most recycling drop-off centers. This may cost
the consumer a great deal in time, effort and transportation.
Bringing the containers to the supermarket, on the same trip a«r
going to the store to shop, can easily become a part of the
lifestyle of the average consumer.
So, yes, a. recycling group does want to see a National Bottle
Bill enacted. We know that we, and groups like ourselves,
will not be enough in the years ahead to deal with the problems
of dwindling raw materials and energy, simply because our
volume is not great enough to offset even a fraction of these
problems.
We are only a start in the process to educate people about
conservation, and make them more aware of how they can lead
more environmentally sound lives. Recycling centers can be
most effective as a complement to people returning beverage
containers to retail stores. But a national policy offering
the alternative to return containers, with an economic
incentive attached, is the next logical step to making
citizens more aware of what they can do to lessen their
environmental impact, as well as dealing creatively with
the serious litter problems and raw materials and energy
shortages we are faced with.
Thank you for allowing me the opportunity to present my
testimony at this hearing.
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Attendees October 19, 1977
Stewart Adlock
Soily Water
Rt. 3
Furquay-Varina, N.C.
27526
Robert S. Aller
U.S. EPA Region III
6th & Walnut Streets
Philadelphia, Pa. 19106
Edward Atkinson, Jr.
Federal Trade Commission
425 13th Street, N.W.
Washington, D. C. 20004
William Eider
Franklin Associates
8340 Mission Rd., Suite 101
Prarie Village, Kansas 66206
Brian Blockwelder
South Carolina Environmental
Coalition
40 Environmental Action
Rm. 731 1346 Connecticut Ave.,N.W.
Washington, D. C. 20036
W.A. Bolin
FMC Corporation
1626 I Street
Washington, D. C. 20006 •
James F. Brownell
Loudoun Co. Board of
Supervisory
County Office Bldg.
Leesburg, Virginia 22075
Jim Brownell
306 W 3rd Street
Ayden, North Carolina 28513
James S. Calhoun
Owens-Illinois, Inc.
P.O. Box 1035
Toledo, Ohio 43614
Kessler Cannon
505 N. Roosevelt
Falls Church, Virginia 22044
T.V. Casler
Continental Can Co.
5745 E. River Rd.
Chicago, Illinois 60631
William K.W. Chen
Celanese Plastics Co.
26 Main Street
Chatham, New Jersey 07928
Louis S. Clapper
National Wildlife Federation
1412 16th Street, N.W.
Washington, D. C. 20510
Francis A. Cooke
USIA
1717 H Street, N.W.
Washington, D. C. 20547
Gary Conklin
Congressman Les Aucolin
Cannon House Office Bldg.
Washington, D. C. 20510
T.E. Cover
ALCAN
Box 594
Marion, Mass. 02738
Victor A. Denslow
Amoco Chemicals Corp.
200 E. Randolph
Chicago, Illinois 60601
Dennis Devane
1750 K Street, N.W.
Washington, D. C. 20006
Andrew Drance
Gordon State Paper Company
2425 Wilson Boulevard
Arlington, Virginia 22201
Alfred S. Eggers, III
National Association of
Manufacturer's
1776 F Street, N.W.
Washington, D. C. 20006
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Paul Emrick
Broadway Glass Co. Inc.
Wood Street
Brockway, Pa. 15824
Meredith M. Feinstein
Dir. Consumer Affairs Div.
U.S. Dept. of Commerce
Rm. 3800
Washington, D. C. 20230
Charles W. Felix
Single Service Institute
250 Park Avenue
New York, New York 10017
Eric Fersht
Consultant
1531 New Hampshire Ave., N.W.
Washington, D. C. 20036
Diana B. Friedman
Dept. of Commerce
BDC Materials Div.
Washington, D. C. 20230
Mark A. Friedman
Owens-Illinois
P.O.' Box 1035
Toledo, Ohio 43666
Elaine Glassman
4301 Mass. Ave., N.W.
Washington, D. C. 20016
H. Gordon
IJC
1717 H Street, N.W.
Washington, D. C. 20440
Jim Groome
Mead Packaging
P.O. Box 4417
Atlanta, Georgia 30302
John M. Heffelfinger
Peter J. Hapworth
National Restaurant
Association
Suite 505, Madison Bldg.
1155 15th Street, N.W.
Washington, D. C. 20005
Mrs. B. Powell Harrison
Keep Loudoun Beautiful
Box 5
Leesburg, Virginia 22075
Christine H. Hart
Dir. Solid Waste Project
International City Mgmt. Assoc.
1140 Connecticut Ave., N.W.
Washington, D. C. 20036
John M. Heffelfinger
U.S. Environmental Protection
Agency
401 M Street, S.W.
Washington, D. C. 20460
Craig S. Honeyman
Office of Senator Mark O.
Hatfield
Washington, D. C.
Robert G. Hunt
Franklin Associates
8340 Mission Road, Suite 101
Prarie Village, Kansas 66206
Charles Jay Iseman
2286 Pimmit Run Lane, Apt. 101
Falls Church, Virginia 22043
Honorable James Feffords
House of Representatives
429 Cannon House Office Bldg.
Washington, D. C. 20515
Carol Jolly
League of Women Voters
1730 M Street, N.W.
Washington, D. C. 20036
Ruth E. Jurman
Glass Packaging Institute
1800 K Street, N.W.
Washington, D. C. 20006
Linda B. Riser
429 N Street, N.W.
Washington, D. C. 20024
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Clifford Klotz
National Can Corp.
8101 W. Higgins Rd.
Chicago, Illinois 60631
Louis Kupper
U.S. Dept of Commerce - BDC
Washington, D. C. 20230
Emery C. Lazar
U. S EPA
Office of Planning Y Evaulation
(PM-223)
Washington, D. C. 20460
Lloyd Leonard
League of Women Voters
1730 M Street, N.W.
Washington, D. C. 20036
Leonard Libster
MIDSD
EPA
401 M Street, S.W.
Washington, D. C. 20460
Richard N. Little, Jr.
U.S. Congress - Transp. & Comm.
Subcommittee - House
HOB-Annex 2
Washington, D. C. 20515
George Marienthal
Deputy Ass't Secretary Def.
OASD (MRASL EES
Room 3B252 Pentagon
Washington, D. C. 20301
Monica Maxon
Gordian Associates
910 17th Street, N.W.
Suite 917
Washington, D. C. 20006McBride
Barbara L. McBride
Food Marketing Institute
1750 K Street, N.W.
Washington, D. C. 20006
Roger McClure
Sierra Club
3847 Beechan Street, N.W.
Washington, D. C. 20007
Andrew McCutcheon
Reynolds Metals Company
6603 W. Broad Street
Richmond, Virginia 23261
John A. Mclntyre
Can Manufacturers Institute
1625 Mass. Ave., N.W.
Washington, D. C. 20036
Ronald A. Michieli
National Cattlemens Assoc. &
Public Lands Council
suite 1020
Washington, D. C. 20004
Brenda Moore
League of Women Voters of
Fairfax
6503 Ridge Street
McLean, Virginia 22101
Sidney P. Mudd
N.Y. 7-UP Bottling Co., Inc.
Joyce Road
New Rochelle, N.Y. 10802
Tobey Nelson
Bureau of Environmental Services
DPW 3450 Court House Drive
Ellicott City, Md. 21043
Charlene Nimmo
Florida Resource Recovery
Councul
2562 Executive Center Circle
Montgomery Bldg.
Tallahassee, Florida 32301
David E. Ortman
Friends of the Earth
620 C Street, S.E.
Washington, D. C. 20003
John L. Oshinski
United Steelworkers of America
Suite 706 815 16th St.
Washington, D. C. 20006
T.J. Pantalio
Seymour & Dudley
1225 Connecticut Ave., N.W.
Washington, D. C. 20036
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W.E. Penoyar
Dept. of Commerce
2120 commerce Bldg.
Washington, D. C. 20230
Scott L. Powers
Goodyear Tire & Robber Co.
1144 E. Market Street
Akron, Ohio 44316
Arthur Purcell
TIP Inc.
#217, 1346 Connecticut Ave., N.W.
Washington, D. C. 20036
Mr. Jerry Petri
General Manager
Beverage & Industry Recycling Prog
2651 S. 22nd Avenue
Phoenix, Arizona 85009
Dwight Reed
National Soft Drink Ass't
1101 16th Street
Washington, D. C. 20036
Barclay Resler
Aluminum Assoc.
818 Connecticut Ave.
Washington, D. C. 20006
Austin Rhoads
Milk Ind. Found/Int'l Ass. Ice
Cream Manufacturers
910 17th Street, N.W.
Washington, D. C. 20006
Donald J. Robinson
OSAD MRA & L EES
Room 3B252, Pentagon
Washington, D. C. 20301
Kathy Robinson
American Paper Institute
1619 Mass. Ave
Washington, D. C. 20036
Mary Jo Salmon
1430 Rhode Island Ave.,N.W.
Washington, D. C. 20005
Harold Samtur
Consultant
2338 Marshall Avenue
St. Paul, Minnesota 55104
Howard Samuels
City of Los Angeles - Nat'l
League of Cities USCM
1620 I Street, N.W.
Washington, D. C. 20006
Mary Scanlan
I.C.M.A.
1140 Connecticut Ave.
Washington, D. C. 20036
Barry F. Scher
Giant Food Inc.
P.O. Box 1804
Washington, D. C. 20013
A.R. Romer
702 Chaney Drive
Takoma Park, Maryland 20012
Pat Rowland
2315 Jackson Pkwy.
Vienna, Virginia 22180
John J. Schilf
D.C. Dept. of Environmental
Services, Bur. of S.W.D.
20 L Street, S.W.
Washington, D. C. 20024
Robert L. Schulz
N.Y.S. Dept of Commerce
99 Washington, Ave.
Albany, N.Y. 12245
Cara Selinger
Beverage Industry Magazine
777 Third Avenue
New York, N.Y. 10017
Marc Shapiro
National League of Cities
1620 Eye Street, N.W.
Washington, D. C. 20006
Robert A. Silvagni
Minnesota Pollution Control
Agency
1935 County Road B-2
Roseville, Minnesota 55113
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William C. Sellery
Owens-Illinois
1717 K Street, N.W.
Washington, D. C. 20006
Louis C. Santone
Dept. of Commerce
14th & Constitution
Washington, D. C. 20230
Peter Thomas Smith
Keller and Heckman
1150 17th Street, N.W.
Washington, D.C. 20036
Frederick P. Somers
c/o U.S. Rep. James Jeffords
429 Cannon Bldg.
Washington, D. C. 20515
Wade St. Claire
National Ctr. for Resource Rec.
1211 Connecticut Ave., N.W.
Washington, D. C. 20036
Garrett A. Smith
US EPA Region II Solid Waste
26 Federal Plaza
New York, N.W. 10007
Richard P. Swigart
American Can Company
Suite 201, 1660 L Street, N.W.
Washington, D. C. 20036
Philip H. Taft
TRI
1343 L Street, N.W.
Washington, D. C. 20005
Suzette Tapper
1731 New Hampshire Ave.
Washington, D. C. 20020
William D. Toohey, Jr.
Society of American Travel
Writers.
1120 Connecticut Ave.
Suite 940
Washington, D. C. 20036
St. Vlair J. Tweedie
Paperboard Packaging Council
1800 K Street, N.W.
Washington, D. C. 20006
George Teitelbaum
Glass Packaging Inst.
1800 K Street, N.W.
Washington, D. C. 20006
Liz Tennant
Environmental Action Foundation
724 Dupont Circle Building
Washington, D. C. 20036
Mark Soberman
Student SUNY at Brockport
1430 Rhode Island Ave., N.W.
Washington, D. C. 20005
Robert L. Schulz
American Alliance of Resource
Recovery Council
105 Wolf Road
Albany, New York 12205
Anne Vignovic
U.S. Brewers Ass.
1750 K Street
Washington, D. C. 20006
Pat Watt
League of Women Voters of Fairfax
3911 King Arthur Road
Annandale, Virginia 22003
F.D. Wharton, Jr.
Continental Group
633 Third Ave.
New York, N.Y. 10017
Richard Wiechmann
American Paper Institute
1619 Mass. Ave.
Washington, D. C. 20006
Kristine Williams
Glass Packaging Institute
1800 K Street, N.W.
Washington, D. C. 20036
Tom Willson
American Iron & Steel Inst.
1000 16th Street
Washington, D. C. 20036
R.C. Wisor
ALcoa
1200 Ring Building
Washington, D. C.' 20015
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Hans Zuberruehler
Alcan Aluminum Ann Gordon
P.O. Box 6946 EAF
Cleveland, Ohio 44114 724 Dupont Circle Bldg.
Washington, D. C. 20036
Judy Zukerman
Neighborhool Recyclers Terry Grasso
1717 R Street, N.W. National Governors Assoc.
Washington, D. C. 20009 444 N. Capitol Street
Washington, D. C. 20001
Richard Wool
The Continental Group Ass. Ernest B. Glynn
633 Third Ave. Consulting Engineer
New York, New York 10017 Watergate Office Building
2600 Virginia Ave. N.W.
Mr. Gerrit W. Wood Washington, D. C. 20037
Ms. Wendy Lucah
Inland Beer Distributors Recycling
Center Bill Ross, Jr.
1715 Monarch Lane P.O. Box 2387
Davis, California 95616 Raleigh, N.C. 27602
Mr. Jeffrey M. Weingarten
Goldman Sacks & Co.
55 Broad Street
New York, New York 10004
SW-29p
Ms. Brenda Moore ua#1624
6503 Ridge Street Sh-654
McLean, Virginia 22101
Mrs. Patricia Watt
3911 King Arthur Road
Annandale, Virginia 22003
Mr. Glen T. Lashley
Society of American Travel Writers
1730 Pennsylvania Ave. N.W.
Washington, D. C. 20006
Karen T.V. Winterbottora
Distilled Spirits Council of U.S.
1300 Pennsylvania Ave., N.W.
Washington, D. C. 20004
C.E. Heyt
Amoco Chemical Corp.
200 E. Randolph Dr.
Chicago, Illinois 60601
Ashok Gupta
1332 15th Street, N.W.
Washington, D. C. 20005
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