ORGGOIT9
BOTTLG BILL:
TH€ HR9T 9IX MONTHS
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OR6GOIVS
BOTTLG BILL
THG HR9T SIX MONTHS
by Eileen Claussen
Since October 1, 1972, all beer and
soft drink containers sold in the
State of Oregon have been required to
carry refund values. Cans with pull-
tab openers have been banned out-
right. This is the first law of its
kind to be enacted by a State, and
it has caused a great deal of
interest in State legislatures
throughout the country. This paper
provides a brief analysis of the
Minimum Deposit Act and an assess-
ment of its impact since its date of
enactment.
Ms. Claussen is with the Resource Recovery Division.
Office of Solid Waste Management Programs,
U.S. Environmental Protection Agency.
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THE LAW
Oregon's "Bottle Bill," signed
into law in June 1971 by Governor
Tom McCall, went into effect October
1, 1972. The Act required a minimum
2-cent refund to purchasers on the
return of "certified" containers of
beer, malt beverages, and carbonated
soft drinks, and a 5-cent refund on
the return of all other beverage
containers. Certified containers are
defined as containers that are used
by, and that will be accepted for
reuse by, more than one manufacturer.
In addition, the law outlaws the sale
of the flip-top or pull-tab beverage
container.
Industry reaction to the measure
was predictably negative, and suit
was filed January 24, 1972, in the
Circuit Court of the State of Oregon
by various container manufacturers,
brewers, and soft drink manufacturers
who claimed that the Oregon law was
unconstitutional. The defendants were
the Oregon Liquor Control Commis-
sion and the Oregon State Department
of Agriculture. The plaintiffs argued:
(1) that the statute violates the
commerce clause of the U.S. Consti-
tution by imposing an excessive
burden on interstate commerce, and
by favoring local concerns at the
expense of distant interstate
operators; (2) that the statute
violates the equal protection clause
of the U.S. Constitution by differen-
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tiating between carbonated and non-
carbonated soft drinks and between
reusable and nonreusable containers;
(3) that the statute violates the
due process clause of the U.S.
Constitution by lacking a real and
substantial relationship to the
objectives sought by the law. The
decision of the Court, which was
rendered September 1, 1972, declared
the act constitutional. The September
1 ruling has been appealed to the
Oregon Court of Appeals by the
plaintiffs.
The major purpose of the bottle
bill is to control litter in the
State of Oregon. In a region with
a demonstrated concern for environ-
mental quality and an emphasis on
outdoor recreation, it was considered
essential that measures be taken to
avoid the widespread littering that
had become characteristic of the
region's beaches, highways, and
other public areas. A mandatory
deposit mechanism, designed to pro-
vide disincentives for throwing
away containers, was chosen as a
means of reducing the beverage con-
tainer portion of litter.
EFFECTIVENESS OF THE LAW
In a 1972 study by Research
Triangle Institute, beverage containers
were estimated to constitute 19.1
percent of roadside litter by item
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count.1 The breakdown by container
type was 73.1 percent cans, 1 7.0
percent nonrefillable bottles, and
9.9 percent refillable bottles. By
container content, beer represented
71.3 percent, soft drinks 25.7 percent,
and wine and liquor 3.0 percent of
all beverage containers in litter.
Beverage containers contributed a
far greater percentage of the volume
of roadside litter. A survey
conducted by the State of Oregon
indicated that beverage containers
formed approximately 62 percent of
the volume of litter. Analyses by
Midwest Research Institute revealed
that consumer perception of beverage
containers in litter seemed to be
based more on their volume than their
numerical frequency of occurrence.2
Shortly after the bottle bill was
passed in 1971, litter surveys were
made on a monthly basis by the
Oregon State Highway Department.
These surveys were continued after
enactment of the legislation so
that data could be obtained on the
Bingham, T. H., and P. F. Mulligan. The beverage
container problem; analysis and recommenda-
tions. U.S. Environmental Protection Agency,
Sept. 1972. 190 p. [Distributed by National Tech-
nical Information Service, Springfield,
Va.,asPB 213341.]
ft
Midwest Research Institute. The national impact
of a ban on nonrefillable beverage containers.
Kansas City, Missouri, 1971. 120 p.
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effectiveness of the law in reducing
the beverage container portion of
litter. Release of these data to the
public caused considerable controver-
sy. Some industry groups claimed that
the data collected prior to enactment
of the bottle bill were not comparabJe
with the data collected since October
1, 1972, because the early data includ-
ed beverage-related paper in the non-
returnable container total. This was
questioned by officials in the
Governor's office, and is as yet
unresolved. Even if one assumes that
this view is correct, there is little
change in the basic results of the
litter analysis. Beverage-related
items totaled less than 2 percent of
the total for the period since the
law went into effect. Other litter
studies, including the study for
Keep America Beautiful, Inc.,
by Research Triangle Institute,
showed beverage-related paper as
representing below 12 percent of
total litter. A deduction of either
amount to adjust the figures
before the bill's enactment produces
only a minor change in the results.
Preliminary comparisons between
the winter prior to enactment (1971-
1972) and the present winter (1972-
1973), for example, revealed that the
law had a significant and positive
impact on litter in Oregon (Table 1).
For these winter months for which
litter data were collected in 1971 and
1972, beverage containers averaged
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O)
A COMPARISON OF OREGON LITTER DATA BEFORE AND AFTER MINIMUM DEPOSIT ACT*
Before enactment
Oct. -Nov. Dec.
1971 1971
Total beverage containers
Returnable
Nonreturnable
Total other litter
Total all items
Beverage container
percentage of total
8,527
971
7,556
15,860
24,387
34.9
—
9,580
1,060
8,520
11,440
21,020
45.6
Feb.
1972
5,254
689
4,565
12,357
17,611
29.8
Winter
Winter average
average per mile
7,787
907
6,880
13,219
21,006
37.0
•= .'.-
269
32
267
456
728
37.0
Nov.
1972
1,705
316
1,389
7,052
8,757
20.7
After
Jan.
1973
^^_M«H^«dW»»
949
272
677
4,896
5,845
16.2
enactment
Feb.
1973
1,168
335
833
4,470
5,638
19.4
Winter
Winter average
average per mile
1,274
308
966
5,473
6,747
18.9
51
12
39
219
270
18.9
Winter
average
comparison
per mile
before/after
-81.0%
-62.5%
-85.4%
-51.9%
-£2.9%
-49.1%
* Source: Oregon State Highway Department Litter Survey
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7,787 per month based on 29 one-
mile surveys. This represented 269
items per mile per month. Data for the
winter after enactment of the legisla-
tion showed a definite drop. For the
three winter months of 1972 to 1973,
there were 1,274 containers lettered
per month based on 25 one-mile sur-
veys, for an average of 51 items per
mile. This was a decrease of 81 per-
cent, or 218 items per mile per month.
The proportion of beverage containers
in litter also dropped significantly,
from 37 percent before enactment to
18.9 percent after the law went into
effect.
It is also important to consider
that of the beverage containers in
litter since enactment of the law,
only 24.1 percent were returnable
bottles. The remainder were nonre-
turnables, presumably purchased be-
fore enactment of the law and still
uncollected. If these nonreturnable
containers are disregarded in order
to obtain a more realistic picture of
current littering in Oregon as
compared with littering before the
law was passed, beverage containers
in litter can be shown to have
declined by approximately 96 percent
(from 7,787 items to 308 items).
IMPACT ON INDUSTRY
Although the initial effects of
the law appear to indicate positive
litter reduction, the bottle bill
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has also been attended by some dis-
ruption in the beverage and beverage
container industries. The law
apparently affected container usage
and sales.
Container Usage
Prior to enactment of the bottle
bill, the Oregon National Soft Drink
Association reported that approxi-
mately 51 percent of all soft drinks
were sold in refillable bottles, 8 per-
cent in nonrefillable bottles, and 41
percent in cans. This mix of con-
tainers changed significantly after
October 1, 1972. In March 1973, no
nonrefillable soft drink bottles were
being sold in the State. Cans had
declined to less than 1 percent of
the total soft drink market. Only
Shasta Beverages, a warehouse brand
distributor, continued to sell soft
drinks in cans.
In December 1971, the Oregon
Liquor Control Commission reported
that approximately 35 percent of all
beer in Oregon was sold in cans.
During the first month of enactment
of the law, the percentage of cans
decreased to 4.3 percent. This
percentage declined still further,
and by December 1972, 99.5 percent
of all beer was being sold in
refillable bottles, with only 0.5
percent sold in cans. This shift
resulted in lower cost to the con-
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sumer, as beer in cans sold in March
1973 at six for $1.58 (including a
30-cent deposit), while certified
refillable bottles of beer sold at
six for S1.17 (including a 12-cent
deposit).
Prices and Sales
By March 1973, the Oregon market
had seen neither a decrease in sales
nor an increase in prices since the
law had gone into effect. In fact,
beer sales for the fourth quarter of
1972 showed an increase of 40,000
barrels over the fourth quarter of
1971, according to the Oregon Liquor
Control Commission. (This represent-
ed an increase in beer excise
taxes collected by the State of
Oregon of $52,000.) Sales of soft
drinks, while not indicating an
increase, did not indicate any
unseasonal decrease either.
As of March 1973, retailers in
the State indicated that no retail
prices had increased, and Oregon
consumers were purchasing beer and
soft drinks at lower prices on the
average than prior to the enactment
of the law. This is because
refillable bottles, which now account
for almost all of beer and soft
drink sales, are considerably cheaper
for the consumer to purchase than
nonrefillable bottles and cans.
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Container Industry
The metal container industry has
been adversely affected by the Oregon
bottle bill. National Can Corporation,
the largest metal can supplier to
the Oregon market prior to October 1,
1972, had to close one of its plants
in Yakiina, Washington. This, in
conjunction with minor shutdowns in
other plants serving the area,
resulted in a total layoff of 82
employees.
Glass container manufacturers,
while gaining in market share, have
had to change from nonrefillables to
refillable bottle production
exclusively. If trippage rates are
high (if each refillable bottle is
returned and reused many times), the
glass container industry could
experience a sales decline. No
estimates are yet available on the
impact of the law on this industry.
Contract Canners
The State of Oregon had only one
contract canner, Emerald Canning
Corporation, prior to October 1,
1972. Emerald Canning recently
announced that it could no longer
continue to can soft drinks. Approxi-
mately 60 employees were terminated
as a result. It is anticipated that
much of the volume once sold in
cans will be sold in refillable
bottles.
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Soft Drink Industry
Major soft drink bottlers have
said that the bill has not adversely
affected the soft drink bottling
industry in Oregon. Most bottlers
experienced a gain in market share,
although this required increased
investment in capital equipment
to wash, fill, and deliver refillable
bottles. No data were available
concerning employment impact on the
soft drink industry, although it
seemed likely that, assuming no sales
decline, employment decreases in
the canning sector would be at least
partially offset by employment
increases in bottling plants.
Brewing Industry
The effect of the Oregon legis-
lation on the brewing industry has
been mixed. Brewers operating in the
Pacific Northwest have been favored,
while shipping brewers (national-
brand beer producers who ship their
beer from outside the Pacific North-
west) have suffered adverse effects.
Approximately 88 percent of all
non-bulk beer sales in the State
since October 1 have been in
certified 2-cent deposit bottles.
Brewers within the States of
Oregon and Washington have tradition-
ally accounted for approximately
81 percent of the Oregon beer market.
These brewers, all of whom have sold
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beer in certified containers since
October 1, have been positively
affected by the bill. Because of
their efficient distribution systems,
and because the shipping distance
from the Oregon market to these
northwest breweries has been minimal,
the regional brewers have been able
to acquire as many 2-cent deposit
bottles as they can use. Since new
refillable bottles cost as much as
five times the deposit values, these
brewers have experienced a substantial
decrease in costs.
Shipping brewers, on the other
hand, have not been able to ship
refillable bottles to and from Oregon
economically. National Brewing
Company, located in Phoenix, Arizo-
na, for example, increased its ship-
ping costs into Oregon by 38 percent
(from 32 to 44 cents per case) due
to the weight and breakage factors
associated with refillable container
distribution. The cost of returning
the empty containers to Phoenix
would be an additional 28 cents. The
economics associated with selling
nonrefillable bottles or cans of
beer in Oregon were, however, worse
for the brewing industry, and all
brewers were using refillable
containers for their Oregon sales.
Most shipping brewers have also
experienced low return rates partly
because of the speed with which
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regional brewers have been purchasing
returned bottles. No data are yet
available, however, on the specific
costs and employment impacts associ-
ated with the brewing industry.
Retail Stores
Oregon food retailers have already
been inundated with empty beer and
soft drink containers. This has,
quite naturally, resulted in increased
costs to the retailer for handling the
returned bottles. Some additional
markup may be required to compen-
sate the store for these additional
costs, although no increases in price
were passed on to the consumer as of
March 1973.
Retailers have also had substantial
space problems due to the additional
quantities of returned containers.
Increased pickups and deliveries by
bottlers were expected to minimize
the space problem.
TRENDS
Oregon's bottle bill has now been
in effect for 6 months. Certain
trends have begun to emerge, and
data are becoming available to assess
the effectiveness and impacts of the
law. The following results can never-
theless be pointed to at this time:
• The beverage container portion
of litter decreased by at least
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49 percent between winter of 1971
to 1972 and winter of 1972 to
1973.
• Container usage has been
dramatically altered by the law.
Less than 1 percent of all
soft drinks and 0.5 percent of
all beer was being sold in cans
as of March 1973.
• The enactment of the law has
been attended by an initial loss
of 142 jobs. A sizeable number
of new jobs may be created in
the bottling industry to offset
these losses.
More data will doubtless be forth-
coming in the months ahead. To assist
in the accumulation and analysis of
these data, the U.S. Environmental
Protection Agency is providing the
State of Oregon with a grant to
evaluate the effectiveness and
impact of the law. It is anticipated
that this study will provide an
objective and definitive assessment
of all the costs and benefits
associated with the Oregon Minimum
Deposit Act.
ya83Q
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