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Wholesalers and suppliers deal with recycling demands.

Wholesalers and Suppliers Deal with Recycling Demands

Whether mandatory or voluntary, recycling efforts offer challenge to industry members.

Brewers and beer wholesalers find themselves in a particularly difficult position these days when it comes to packaging. On the one hand, beer consumers are demanding the availability of packaging variety. On the other hand, social and legal pressures prescribe that all beverage packaging be "environmentally friendly," namely, recyclable.

In nine states, the social and legislative pressures have prevailed with the enactment of mandatory beverage container deposits. In these states--which represent 27 percent of all beer sold in the U.S., according to the Beer Institute--retailers pay distributors and bottlers a deposit of five or 10 cents for each bottle or can delivered. The deposit fee is then passed on to the consumer. If the container is returned, the retailer refunds the deposit to the consumer. Then when the wholesaler picks up the empty containers, the retailer is reimbursed.

Deposit law supporters for years have been advocating a national bottle measure. Such legislation, the supporters say, will reduce litter, save energy and relieve overburdened landfills. A national container law, however, does not appear likely to pass, "at least not this year," one industry observer stated.

Bottle bill proponents note the reduced roadside litter and increase in aluminum and glass recycling in deposit states. The success of these measures, however, is debatable, industry members say, pointing to necessary labor and equipment costs. Other recycling efforts are needed, distributors and suppliers have stated, including programs which don't single out one type of waste material.

AB 20/20

California is one state which has opted for beverage container redemption rather than the standard refundable deposit. Passed in 1986, the California Recycling Act, or AB 20/20, provides a redemption value of at least one cent for every beer or soft drink container sold. When the redemption rate for any one type of beverage container falls below 65 percent, the law stipulates that that container will then have a redemption value of at least two cents.

The California measure established a general fund, into which distributors and bottlers contribute the redemption value. The fund is also the source for consumer redemption. This system, supporters said, reduces the possibility that wholesalers receive and redeem more bottles and cans than they originally sold, a situation often cited in New York City.

According to the New York State Beer Wholesalers Association, New York's six-year-old bottle law is successful everywhere but in the New York City metropolitan area. There, the NYSBWA said, the return of containers has been stymied by over-redemptions as some wholesalers get back substantially more containers than they sell. State officials, however, have challenged this claim, charging that the beverage wholesale industry has discovered a windfall in unclaimed container deposits.

Earlier this year the trade association disclosed a plan whereby New York's bottle law would be phased out by 1992 and replaced with a more comprehensive overall waste reduction program. Under the beverage industry proposal, a waste disposal fee of one-tenth of one percent on gross retail receipts would raise $1 billion over a 10-year period, a sum that would be matched by municipalities. The money, NYSBWA says, would then be allocated to close landfills and establish collection, processing and recycling systems.

The plan also calls for resident separation of recyclable material into three categories: packaging, paper products and yard waste. The sorted material would be picked up curbside in cities and dense population areas. Mobile depots would service low-density areas.

Curbside pick up

This type of collection, or curbside recycling, is a program being adopted in more and more communities. Three states, New Jersey, Rhode Island and Pennsylvania, require their municipalities to institute curbside recycling programs. Legislatures in at least nine other states are considering recycling mandates, the Glass Packaging Institute, a trade association representing glass container manufacturers, reported.

"Comprehensive curbside recycling, or multi-material source separation, is the most effective method for recovering recyclable materials," GPI stated. According to formal research sponsored by the group, curbside recycling is the favored method of recycling. And a recent Media General/Associated Press poll found that 87 percent of the adult population would support mandatory waste separation.

"Citizen involvement is the linchpin" to successful recycling programs, Lewis D. Andrews, GPI president, said. "Comprehensive curbside recycling programs are diverting as much as 35 percent of municipal solid waste from landfills and saving taxpayers thousands of dollars in tipping fees." These programs, he added, "are the best way to reclaim not just the glass, but also the recyclable aluminum and paper, from the waste stream."

Glass vs. aluminum

Another packaging trade group, the Can Manufacturers Institute, however, believes that solid waste management is best achieved through "an integrated program" that emphasizes recycling and source separation. "CMI favors the broadest possible free-market recycling," Dave Karmol, association general counsel, said.

"Curbside recycling has a place" in waste management, Karmol continued, "but it is not a panacea." According to the attorney, CMI has found the nation's highest recycling success rate in communities, such as San Jose, CA, which combine curbside pick up with voluntary drop-off.

While such an assertion appears to be a contradiction, Karmol assures that the combination of mandatory and voluntary recycling does work as forced pick up encourages residents to separate waste. Once consumers realize the value of recyclable materials, he continued, they often opt for their own drop-off. This situation, Karmol reported, results in "greater return" of recyclables.

Can manufacturers are not opposed to curbside recycling, the CMI spokesman said, admitting, however, that unlike the GPI, his group has taken a "cautious approach" on the issue. The discrepancy in the two associations' positions, Karmol stated, "comes down to the economics of recycling and the intrinsic value of the materials." As a recyclable commodity, aluminum is more valuable than glass.

Additionally, according to CMI, many small businessmen "have made a business of recycling cans," while very few glass-only recycling operations exist.

"We have been highly successful with voluntary recycling," Karmol noted, citing a 54-percent return rate on aluminum cans. "We don't want to destroy voluntary programs."

One such program, the Great Aluminum Can Roundup, is sponsored by CMI. Now in its third year, the localized recycling program involves scouting groups in 13 cities throughout the country who collect aluminum cans from neighborhood homes and businesses. The cans are then redeemed for cash at local participating scrap dealers and recycling centers.

The majority of aluminum cans which are recycled come from states with voluntary, as opposed to mandatory, recycling requirements, according to Irene Schmidt, vice president, recycling, Aluminum Co. of America. In a recent address Schmidt attributed that success rate to the incentive of "benefitting from scrap value" in voluntary states, as compared to complying with the law in mandatory recycling states.

Wholesaler involvement

Whether mandatory or not, however, recycling directly impacts beer wholesalers and their businesses. "Recycling has become part and parcel of my distributorship business," Sam McQuade, Jr., president, McQuade Distributors, Bismarck, ND, said. "It helps us interact with the community in a way that complements our sponsorships and the other ways wholesalers normally get involved locally."

McQuade, an Anheuser-Busch, Inc. wholesaler, participates in the recycling arena through Container Recovery Corp. The recycling subsidiary of A-B Cos., CRC supports over 500 community recycling centers across the country by providing equipment and support to centers operated or sponsored by its wholesalers.

According to A-B, CRC, through its network of wholesalers, paid out more than $135 million to recyclers in 1988 as more than 300 million pounds of aluminum, or over 7.8 billion cans, were recycled through the program.

At the recycling centers, aluminum cans are purchased from the public, sorted, flattened and loaded onto a 40-foot trailer for eventual shipment to four CRC processing plants. CRC provides a flattener/separator, scale, trailer and an equipment maintenance program to A-B wholesalers or third-party operators they sponsor. Typical third-party operators include sheltered workships, civic clubs or local charities.

The third party usually receives the operating proceeds from its recycling, A-B said, while the wholesaler provides advertising and promotional support, as well as the shipment of aluminum to processing centers. In turn, CRC aids the wholesaler through cooperative advertising and promotional programs.

PHOTO : Recycled aluminum cans are shredded into chips for use in new beverage containers.

PHOTO : Glass beverage containers, while not as valuable as aluminum cans, are welcome at

PHOTO : recycling centers.

PHOTO : These Budweiser cans will be reincarnated into new beer cans by Anheuser-Busch's

PHOTO : Container Recovery Corp. division.
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Title Annotation:beer industry
Author:Finnegan, Terri
Publication:Modern Brewery Age
Date:Jul 10, 1989
Words:1418
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