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An environmental protection publication (SW-139)
in the solid waste management series
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Bcvo/ice
TH€ MGRMOhT
expeRience
by Michael Loube
The Vermont Law
An act to control the use of beverage
containers was signed into law in Vermont
on April 10, 1972. Provisions relating to
beverage container deposits were scheduled
to be effective on July 1, 1973, but certain
administrative rules and guidelines were not
finalized by that date, and the effective
date of the law was thus delayed until Sep-
tember 1,1973.
Mr. Loube is with the Resource Recovery Division, Office
of Solid Waste Management Programs, U.S. Environ-
mental Protection Agency.
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The Vermont legislation provides for:
(1) A minimum deposit of 5 cents for
all beer and soft drink containers.
(2) A handling charge of 20 percent of
the deposit to be paid by the manu-
facturer or distributor to the re-
tailer.
(3) A label on each container clearly
indicating the amount of the de-
posit and naming the State in which
the deposit is valid.
(4) The ability to establish (by any
person) a centralized deposit collec-
tion facility away from a retail
store. These facilities can be either
deposit exchange operations or
complete recycling centers.
(5) A penalty for violation of the law,
to be not more than $1,000 per
violation.
This report examines the impacts in
Vermont from this particular legislation. It
should be noted, however, that a new bev-
erage container law, amending and extend-
ing the authorities of the original act, was
passed by the Vermont Legislature, and
was signed by the Governor on April 30,
1975. The new legislation became effective
on July 1, 1975.
The new law contains the same provi-
sions as the first law, plus some significant
additional provisions. The Vermont Senate
passed this revised legislation by a vote of
29 to 1, The Vermont House passed the bill
on first reading by a vote of 110 to 31.
Final action in the House was by voice
vote.
The new provisions in the Vermont law
are:
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(1) Labels on beverage containers shall
clearly state the amount of the
deposit and carry the word "Ver-
mont" in not less than one-quarter-
inch type size. Labels on metal cans
must be on the top of the con-
tainer. Refillable containers are
exempted from the labeling require-
ments. This section became effec-
tive September 1, 1975.
(2) Nonrefillable glass containers are
banned, as are detachable parts of
metal cans (pull tabs) and contain-
ers connected to each other by
plastic rings or similar nonbiode-
gradable devices. This section be-
comes effective January 1, 1977.
(3) An educational program for the
public is established. Store redemp-
tion hours can be posted. These
provisions became effective July 1,
1975.
The provisions of the original 1972 act
remained in effect.
Impact on Litter
The Vermont State Highway Depart-
ment conducted a special litter survey start-
ing in June 1973 and continuing through
November 1973. After November, snow
removal work took the place of litter pick-
up. The litter survey resumed in June 1974
and continued through September 1974.
Since the law went into effect in Septem-
ber 1973, by comparing the survey data for
the months of June, July, and August 1973
with data for the same months in 1974, the
initial impact of the law on beverage con-
3
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tainer litter can be discerned. This compar-
ison reveals that the law had a definite
impact on beverage container litter in
Vermont (see table). In both years, the
June litter pickups removed waste dis-
carded throughout the winter.
For the 3 months before the law was
instituted in September 1973, beverage
container litter averaged 45 percent of the
total litter volume. For the same months,
in 1974, beverage container litter dropped
to 18 percent of the total litter volume.
The actual number of littered beverage
containers declined from a monthly average
of 12,721 before the law to 4,191 after the
law, a decrease of 67 percent or more than
8,500 containers per month. Of the bever-
age containers in litter since enactment of
the law, 26 percent were deposit contain-
ers. The remainder were nonreturnables,
presumably purchased outside the State or
before enactment.
Impact on Prices
Soft Drink Prices. Initially, soft drink
prices did not change. Price increases of 20
to 40 cents per case were later passed on to
consumers (one distributor increased prices
by 35 cents per case on February 21, 1974,
5 months after implementation of the act,
and others followed soon thereafter). The
increase is said to cover: (1) the 24-cents-
per-case handling charge that distributors
must allow, by law, to retailers (to pay for
their increased handling costs) and (2) an
additional 6 to 16 cents per case to cover
distributors' increased handling costs. Addi-
tional increases may also occur at the retail
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VERMONT LITTER DATA BEFORE AND AFTER MINIMUM DEPOSIT ACT*
Before enactment
Total beverage containers (number)
Beer containers
Cans
Bottles
Soft drink containers
Cans
Bottles
Total litter volume (barrels)
Beverage containers
Other litter
Beverage containers as % of total
June
1973
19,446
15,538
9,384
6,154
3,908
2,679
1,229
142.1
67.4
74.7
47.4
July
1973
8,525
6,058
3,694
2,364
2,467
1,636
831
74.1
29.1
45.0
39.3
August
1973
10,192
7,337
4,304
3,033
2,855
2,025
830
74.4
35.2
39.2
47.3
Average
12,721
9,644
5,794
3,850
3,077
2,113
963
96.9
43.9
53.0
45.3
June
1974
8,796
6,759
3,596
3,163
2,037
1,252
785
152.0
31.0
121.0
20.4
After enactment^
July
1974
1,648
1,191
778
413
457
353
104
47.2
5.5
4-1.7
11.7
August
1974
2,129
1,521
872
649
608
380
228
49.2
7.6
41.6
15.4
Average
4,191
3,157
1,749
1,408
1,034
662
372
82.8
14.7
68.1
17.8
Average
change
(%)
-67.1
-67.3
-69.8
-63.4
-66.4
-68.7
-61.4
-14.6
-66.5
+28.5
-60.7
*Source: Vermont State Highway Department Litter Survey. The survey covered 35 roadway sections of approximately 5 miles each, or a
total of 175 miles.
f After enactment approximately 74 percent of all beer and soft drink containers littered were out-of-state no-deposit containers. No data
<~r\ are available on percentages of deposit and non-deposit containers in 1973.
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level. However, given that during this
period the prices of sugar, containers, and
labor also increased, the price increase can-
not be attributed solely to the deposit law.
Beer Prices. Price increases occurred as
soon as the legislation became effective.
Wholesalers increased prices from 40 to 60
cents per case. This increase was said to
cover: (1) the 24-cents-per-case handling
charge paid to retailers and (2) an addi-
tional 16 to 36 cents per case for cost of
handling by the wholesaler. Retail stores
added up to 15 cents per case as a handling
charge (above the 24 cents per case re-
quired by the law from the wholesaler).
The State's attorney investigated the rea-
sons for these price increases; no charges
were filed in court.
As in the case of soft drink prices, vari-
ous costs were increasing during this time,
and therefore the price increase could not
be attributed to any single cause.
In summary, price increases occurred
both for beer and soft drinks; the prices of
soft drinks increased 20 to 40 cents per
case, while the price of beer per case
jumped almost immediately (September 1,
1973) by around 60 cents per case. This is
in addition to the 5-cents-per-bottle deposit
(or SI.20 per case) consumers must ini-
tially give.
For those consumers who switched
from one-way containers to returnable
containers, however, a portion of this gen-
eral price rise was eliminated. The potential
cost savings to the consumer is indicated,
for example, by the report from one major
soft drin'K distributor that his wholesale
cost of beverages in returnable bottles
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shipped from Maine was 50 cents less per
case than the wholesale cost of comparable
beverages in nonreturnable bottles shipped
to a distributor in New Hampshire from
Maine.
Impact on Sales
Only preliminary data are available
concerning the impact of the law on beer
and soft drink sales (beer sales figures for
September 1973 through June 1974 are
based on tax receipts; soft drink sales are
only estimated). There are at least two
major factors other than the law that might
have had an impact on sales. These are: (1)
a decline in tourism (summer season—May
through October—down 8 percent; winter
season—November through April—down 28
percent); (2) a change in New Hampshire's
legal drinking age (from 21 to 18 years old,
in September 1973) that allowed some
individuals to drink legally in that State
who previously might have driven across
the Vermont border to purchase beer. A
third factor is the overall health of the
economy. The State of Vermont has had
about a 10-percent decline in projected
overall tax receipts for fiscal year 1974.
Soft Drink Sales. Coca-Cola and Pepsi
Cola each has about one-third of the Ver-
mont market. All others (Cott, store
. brands, etc.) share the other one-third.
Springfield Sugar Company, Windsor
Locks, Connecticut, and some low-volume
brands have withdrawn from the Vermont
market.
Data on sales specifically since Septem-
ber 1973, when the law went into effect,
7
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were not generally available. An exception
was data from the Coca-Cola Bottling Com-
pany of Barre, which accounts for slightly
more than one-fourth of Coca-Cola sales in
Vermont or about one-twelfth of the total
soft drink market. Their sales for Septem-
ber through August, 1973-74, show a 3.1-
percent decline compared with sales for the
same months in 1972-73. For the year
1973, the company reported a 10.8-percent
sales increase. The Coca-Cola Bottling Com-
pany of Burlington, accounting for slightly
less than half of Coca-Cola sales, reported a
6-percent sales decline for the year 1973.
Beer Sales. Tax receipt data were used
to gauge the impact on beer sales. Three
year-to-year comparisons have been made.
In each case the comparison is between a
12-month period during 1972-73 and the
comparable period during 1973-74. Sales
for the period July 1973 to June 1974 (the
fiscal year) show a 9.7-percent reduction
compared with the previous fiscal year. The
period September 1973 to August 1974
(first year under the law) shows an 11.6-
percent reduction as compared with Sep-
tember 1972 to August 1973. The period
December 1973 to November 1974 (first
year after period of transition) shows an
8.3-percent reduction in sales as compared
with the same months in 1972-73. It is
obvious that beer sales in Vermont declined
about 10 percent in the first year of the
law. Sales have risen again, however, and as
of May 1975 were about 3 percent higher
for the fiscal year to date as compared to
the same period of the previous year.
On May 1, 1973, four brewers, repre-
senting eight brands, chose not to renew
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their certificates of approval for Vermont
sales. Some minor sales loss may have been
caused by their departure from the market.
Their total sales equaled 2.6 percent of the
market in 1972.
Liquor and Wine Sales. Although liquor
and wine containers were not included
under the deposit law, sales of liquor and
wine were also examined to assess whether
other factors may have caused sales de-
clines. Tax receipt data were used to esti-
mate the sales trends. Comparing fiscal year
1974 (which covers a period of 10 months
under the law) to fiscal year 1973, liquor
and wine sales showed a 3-percent decline.
This decline followed an 8-percent increase
in fiscal year 1973. (Beer sales had a 1-per-
cent increase in fiscal year 1973 followed
by a 9.7-percent decrease in fiscal year
1974.)
In summary, preliminary data on beer,
soft drinks, liquor and wine sales are avail-
able. Beer sales declined substantially, al-
though total sales may have been affected
by factors other than the deposit law.
Other beverage sales also declined some-
what. Distributors of both soft drinks and
beer agreed that case sales were affected
more than smaller volume sales at most
locations within the State.
One final comment is required concern-
ing the impact of the price increase on the
sales of beer. Even before the law, due to
Vermont taxes, beer was cheaper in the
adjacent States. The Vermont tax per case
was about 57 cents compared with about
10 cents for New York, 17 cents for Massa-
chusetts, and 27 cents for New Hampshire.
Vermont retailers by law cannot sell beer
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below their cost as a loss leader to bring
people into their stores. New Hampshire
retailers near the border can and do run
specials on beer. In fact, one survey (the
only one) showed a 47-percent decline in
Budweiser brand beer sales at Vermont
stores near the New Hampshire border dur-
ing the first 4 months the law was in effect
compared to the previous year.
Impact on the Distribution System
Because of the law there have been
additional costs for distribution and return
of beverage containers. The extent of these
costs and the ultimate net cost are not
*
known at this time. An efficient return and
reuse system, fewer types and sizes of con-
tainers, and improved truck delivery and
return routes are some factors that could
help restrain cost increases.
Return Ratios. The percentage of bev-
erage containers returned will have a signif-
icant impact on the distribution system.
The economics of a refillable bottle system
improve dramatically as the number of
refills per bottle increases. If a refillable
bottle is not returned, the distributors tend
to lose money; the bottle is worth more
than the deposit. If a nonrefillable con-
tainer is not returned, the distributor ac-
quires the deposit without incurring return
handling costs, hence a profit gain. If a
nonrefillable container is returned, the
container must either be disposed of or
recycled (most of these containers are cur-
rently landfilled in Vermont).
The return rates for three distributors
providing data (containers returned in
10
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month versus containers sold) averaged
above 90 percent for the first 4 months of
the law. This is true for both one-way con-
tainers and reusables and for both beer and
soft drink containers. In fact, several dis-
tributors reported that in January (the 5th
month) their return rates were 100 to 105
percent, i.e., their sales may have gone
down, but they seem to have received last
month's bottles. One distributor estimatec
that he was getting an average of SVz to 9
trips per bottle. This same individual indi-
cated that, because of substantial reduc-
tions in container costs with a refillable
system, if he gets 4V£ trips per bottle he can
break even on costs.
During June, July, and August of 1974,
some soft drink bottlers experienced a de-
cline in their return rates. This is con-
sidered normal since returns are usually
slow in the summer and some local bottlers
had only recently switched over to systems
relying entirely on refillables. In fact, re-
turn rates in late fall 1974 returned to their
presummer high rates of 90 percent and
above.
High return rates do not always trans-
late into a high number of trips per bottle,
since bottles may be chipped or otherwise
unusable even after a single use.
Container Mix. Soft drink distributors
switched to refillables more rapidly than
beer distributors. Before the law went into
effect, 2 percent of the containers distrib-
uted by Coca-Cola in Burlington were re-
fillables; by April 1, 1974, 80 percent were
refillables, and in July 1975, 100 percent
were refillables. Coca-Cola in Rutland prob-
ably will follow the Burlington pattern.
11
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Coca-Cola in Barre was switching to refill-
ables before enactment of the law and is
now using all refillables. Pepsi Cola in Bur-
lington, with over 60 percent of the Pepsi
Cola market in Vermont, rapidly switched
to refillable glass (from one-way glass) and
is now using almost 100 percent glass refill-
ables, although cans continue to be sold.
Cott Bottling Company is reported to be
switching to refillables. There has also been
some elimination of different sizes as most
stores did not wish to handle more than
two or three sizes of containers. Coca-Cola
in Barre reported shipping mostly 10-ounce
and 32-ounce bottles instead of a mix of
6V2-, 10-, 16-, 32-, and 48-ounce cans and
bottles as in the past.
Beer wholesalers generally stayed with
the pre-law container mix until mid-1974.
There seems to have been some shift out of
cans into nonreturnable glass. Carling,
Schaeffer, and Pabst began marketing a
refillable bottle statewide in late 1974.
They have been followed by other brewers,
including the Canadian imports Labatts and
Molsan. The extent of the switch is still
unclear, but it appears that a greater share
of the beer market will be packaged in re-
fillable bottles in the near future.
Retailers. Due to the high return rates,
all retailers have had storage space prob-
lems. This is very important in Vermont.
Independent stores (mostly small "mom
and pop" outlets) still account for about
53 percent of sales of typical retail food
merchandise while supermarkets account
for 47 percent. In the smaller stores, bever-
age sales account for 24 to 30 percent of
total sales, while only about 12 percent are
12
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beverage sales in larger stores. No informa-
tion was available on the additional dollar
costs experienced by retailers. Some stores
had substantial sales declines. All sources
agreed that the small stores had greater
problems with storage and handling of re-
turns than supermarkets. A court case by
some retailers challenging the law was de-
sided in favor of the State.
Initially there were numerous com-
plaints to the State government (about
2,000 phone calls and 1,600 letters) con-
cerning store requirements for returning
containers. Complaints included return
hours set at inconvenient times, children
being required to accept candy rather than
money for deposit refunds, children not
allowed to return beer containers, accept-
ance of case lots only, requirements to
bring back the same container carton, caps
must be on bottles, etc. One store placed
its own "label" on beverage containers and
would accept back only containers that
were so labeled. All complaints were turned
over to the State legal officers. Usually a
telephone call sufficed to correct the
situation.
Soft Drink Distributors. Two distribu-
tors (Coca-Cola Bottling Companies in
Barre and Burlington) provided data con-
cerning the impact of the law on employ-
ment and equipment. Discussion of that
data follows.
Case loads per truck were down 30 to
40 percent because of the space required to
load the returns and also because of some
shift from cans to glass—both refillable and
nonrefillable (glass bottles take up more
space per ounce than do cans). These dis-
13
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tributors have ordered a total of five new
trucks (one had six and ordered two new
trucks, the other had four and ordered
three new trucks). Each new truck will cost
approximately SI2.500.
Coca-Cola in Burlington initially added
two employees in the warehouse to sort
containers and crush nonrefillables to ship
to Orangeburg, New York. One additional
person is required to help load and unload
trucks, and three new drivers were hired.
With their recent shift to refillable contain-
ers, the crushing task has been discontin-
ued. However, six additional employees
have been hired to handle the returnable
bottle flow. Investment decisions, espe-
cially regarding warehouse needs and new
production equipment, have been acceler-
ated due to the impact of the law on the
mix of containers desired.
Coca-Cola in Barre estimated a need for
four additional employees: two in the
warehouse and two drivers. This distributor
also estimated a net savings of 54 cents per
case at a 90-percent return rate using re-
turnable glass bottles rather than cans.
They have shifted to all returnable glass
bottles. Some additional costs were identi-
fied in relation to vending machines. Costs
to switch from cans to bottles run approxi-
mately S30 per machine. A conversion to a
cup dispenser will run S2.000. No data
were available on the number of such con-
versions required.
Beer Wholesalers. There are 15 to 18
beer distributors serving Vermont. One
distributor (James B. Flanagan Co., Inc.)
provided data. He estimated that they
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would need six extra employees when they
switched to returnable bottles. They were
ordering three new trucks, but two are
replacements for obsolete equipment. The
representative of several other brewers esti-
mated increased handling costs and in-
creased gasoline usage of 15 to 30 percent,
although actual data were not available.
Container Manufacturers. No signifi-
cant impact has been felt by the container
manufacturers since the volume of sales in
Vermont is relatively small. Also the grad-
ual shift into refillables by different com-
panies at different times minimized even
this small change. A problem with the la-
beling requirement is that the Vermont vol-
ume may not justify container manufactur-
ing changes. New glass bottle molds cost
approximately $15,000, although stenciling
on paper labels can be used and is relatively
inexpensive.
Summary
As of this writing the Vermont bottle
bill has been in effect for over a year and a
half and the 1975 amendments a few
months. While complete data are not avail-
able, certain trends have emerged that al-
low an assessment of the effects of the law.
The following results can be noted at this
time:
• The beverage container portion of
highway litter decreased by about 67
percent between 1973 and 1974.
• Sales of beer have declined by about 10
percent, although factors other than
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the deposit law probably accounted for
an undetermined portion of that
decline.
Prices of beer and soft drinks have
risen, although increases in materials
(sugar, grain, containers) and labor
probably accounted for a portion of
that price rise.
There has been a significant shift to-
ward use of refillable bottles for soft
drinks. Some soft drink bottlers are
now using only refillable bottles. Con-
tainer usage for beer appears to be
shifting toward greater use of refillables.
During the transition to a soft drink
container system based largely on refill-
ables, the return rates for bottles have
been reasonable; bottlers are generally
obtaining 8 to 12 trips per bottle.
Increases in employment to handle and
transport returnable bottles were re-
ported by several soft drink distributors
and beer wholesalers. No significant
sales or employment impacts were ex-
perienced by container manufacturers
since the sales volume in Vermont is
relatively small. In more highly popu-
lated States both increases and de-
creases may be more significant.
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Mention of commercial products does not imply
endorsement by Ihe U.S. Government
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33E? u.s. ewiiRoriMeriTdL pROTecrion dcencv
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