Introduction

The beverage container industry has shifted over the last several years from a deposit-and-return system to the "throwaway" metal or glass container. Legislation has been introduced in Congress which would require a deposit on all containers of beer and soft drinks, and thus have the effect of causing a widespread return to "returnable" containers. Laws which have this objective have been enacted in three states and several communities, and have been presented to the governing bodies of numerous other communities and states.

Change in this area, however, is coming about slowly. The American consumer appears to prefer the "no-deposit, no-return" system. A trip along a few miles of a country road or a walk on a city street will attest to the convenience of having a container that can be discarded as soon as its contents have been consumed. The system is not only convenient for the consumer; it also is not burdensome to the retailer or the manufacturer.

Why, then, has there been growing support for the "returnable"? For many people, the most prominent reason is the obviously "environmental" one. Adoption of a "returnable" system means less litter and thus less eyesores on the highways. It also means a substantial reduction in solid waste that must be collected and processed.

The "energy crisis" and the knowledge that natural resources are being depleted and cannot be renewed are causing many people to examine the current system in which the "throwaway" predominates, and to question its efficiency and use of materials. There is increasing recognition that use of one-way containers entails a high and unacceptable cost in natural resources and energy. It is for these reasons that the Environmental Protection Agency has advocated a deposit system for beverage containers, which should lead to a significant reduction in the numbers of "throwaways."¹

Reductions can, theoretically, be achieved in several ways and under a variety of auspices: by consumer pressure and the actions of the free market; by voluntary actions on the part of the beverage industry; or by government regulation. The Environmental Protection Agency and others believe that voluntary action alone cannot bring about a reversal of current practice — there must be some form of regulation; and that while regulation at the state and local levels can play an important part, equity demands that there be a national program.

The Scope of the Problem

Between 1959 and 1972, the quantity of beer and soft drinks consumed in the United States increased by 33 percent per capita. During the same period, the number of beer and soft drink containers produced annually rose almost seven times as much — 221 percent.² This dramatic increase in the number of containers is almost entirely attributable to the increase in the number of nonrefillable containers. For example, in 1963, Americans bought 92 percent of their soft drinks and 46 percent of their beer in refillable containers.³ In 1972, however, these figures had changed to 39 and 18 percent, respectively.⁴

Over eight million tons of beer and soft drink containers were produced and discarded in the United States in 1972. This figure represents 21 percent of all packaging wastes and approximately eight percent of the total product wastes generated by business and commercial establishments, households, and institutions. Beverage containers are the most rapidly growing component of all municipal waste, increasing at a rate of approximately eight percent per year.⁵

Many of the discarded containers wind up as litter rather than in municipal trash. A survey made in 1969 estimated that beverage containers comprised 19.7 percent of highway litter by item. Volume figures of between 54 and 70 percent were reported by the Oregon State Highway Department.⁶ There is thus ample incentive, from the standpoint of litter alone, to reduce the rising number of discarded beverage containers.

[5 ELR 50024]

A return to refillable containers — and thus a reduction not only in the amount of containers improperly discarded but in the number of containers manufactured — would have undeniable energy and materials benefits as well.

Beverage container production results in the use of approximately one to two percent of energy used by all United States industries.⁷ Studies made for the Environmental Protection Agency show that, when the energy demands of both the manufacturing process and the refilling process are taken into account, a refillable bottle which makes ten trips uses forty to seventy-five percent less energy than that required to deliver an equivalent amount of beverage in a "throwaway" container.⁸ This saving is even more significant when we realize that most returnable bottles make more than ten trips; indeed, 25 to 30 trips per bottle are not uncommon.

In 1972, consumption of beverage containers resulted in the use of 6 million tons of glass, 1.6 million tons of steel, and 0.4 million tons of aluminum. EPA has estimated that as much as 3.8 million tons of glass, 1.2 million tons of steel, and 0.2 million tons of aluminum could be saved if there were a uniform national return to refillable bottles.⁹

Use of nonrefillable containers — and thus of energy and material resources — is likely to continue at an ever-accelerating pace over the next decade unless action is taken to slow down the momentum or reverse the trend.

Proposed Solutions

The Environmental Protection Agency has been studying the recovery of resources from solid waste and the reduction of solid waste at the source, under the authority of Section 205 of the Solid Waste Disposal Act.¹⁰ A report transmitted to Congress in March 1974, entitled Resource Recovery and Source Reduction, discusses the "throwaway" container problem and outlines three major approaches that have been taken to reverse the trend toward nonrefillable containers or reduce the beverage container portion of litter.¹¹

The first possible solution is a litter tax — a minimal fee, perhaps half a cent per container, that would be paid on the sale of each container of beer or carbonated soft drink. The tax could be imposed at the point of purchase of the container by the beverage industry. Litter taxes could be collected by either state or local government.

Although local effects might vary, such a tax would not be likely to affect the trend toward throwaways, and might have no effect on the rate of littering. The minimal size of the tax would not discourage consumption of beverages or of containers; the fact that it would be applied to all sorts of containers and provide no incentive to return the container would mean that neither the mix of containers nor disposal habits would change. The tax, would, however, raise revenue to be used for collection of litter. The State of Washington has taken this approach.¹²

A second method that can be used is the outright ban on non-refillable containers. Bottlers of beer and soft drinks would probably place deposits on their refillable beverage containers to retrieve them for reuse. Such a ban would completely eliminate the beverage can manufacturing industry and the contract canning industry, and halt the use of steel an aluminum for beverage cans.

A partial ban would be accomplished by a law which goes into effect in South Dakota in 1976, prohibiting the sale of beverage containers which are not reusable or biodegradable.¹³

Finally, the problem can be addressed by requiring deposits. Vermont, Oregon, and several communities or counties have taken this approach, which was also contained in a bill (S. 2062) introduced by Senator Hatfield in the 93d Congress.¹⁴ The retailer would be required to [5 ELR 50025] pay from two to ten cents for every empty container of beer or soft drinks that was returned to him, and to accept from the consumer any empty container of a kind, size, and brand sold by that retail outlet. Retailers could, in turn, return empties to distributors, who would also be required to pay the stipulated refunds.

A system of mandatory deposits has several advantages. There would be a substantial impact on the litter problem. A study by the Midwest Research Institute indicates that mandatory deposit legislation is likely to result in decreases of from 60 to 95 percent in the number of beverage containers discarded as litter.¹⁵ Data from Oregon indicate that there have been reductions in the beverage-container portion of litter of over 65 percent.¹⁶ A nationwide system of mandatory deposits could result in a decrease of from five to six million tons of solid waste annually.¹⁷

A mandatory deposit regime would have a considerable impact on the use of raw materials and energy. For example, if there were a 90 percent refillable market in which each container made ten trips, the energy required to manufacture and fill beverage containers could be reduced by approximately 194 billion BTU's, the equivalent of 92,000 barrels of oil a day.¹⁸ (This is a net figure, which takes into account the energy needed to prepare containers for reuse.) The use of steel and aluminum for beverage containers would be drastically reduced. The requirement for manufacture of new glass bottles would be significantly lowered; the reduction would depend on rates of consumption, returns, and breakage of or damage to bottles.

The most codntroversial aspect of a returnable-bottle system is the economic impact that a shift would have, both on the market and on the industry itself. The effects on the prices of soft drinks and beer, and thus on the demand, are uncertain. Predictions range from no decline in sales to a loss of eight percent.¹⁹ The most recent data from Oregon show no sales decline for either beer or soft drinks in the year following enactment of the deposit law.²⁰

Preliminary data from Vermont show a decline in beer sales of about 16 percent; very sketchy soft-drink data, available only for Coca-Cola, show a six-percent decline for 1973 (the law did not go into effect until August).²¹ It should be noted, however, that the new law may have been only one of several factors contributing to sales declines: others are a decline in tourism, the State's overall economic situation, the lowering of the drinking age in adjacent New Hampshire, and the availability of nonreturnables and lower-priced beer in nearby states.

There is a possibility of considerable, though temporary, disruption in the beverage container manufacturing industry and distribution system. The Research Triangle Institute study estimated that introduction of a national deposit measure in 1969 would have caused the loss of approximately 60,500 jobs, primarily in the container manufacturing industries, and a gain of 60,800 jobs, primarily in the retail and product distribution sections.²² This would have meant a net increase in total jobs, but the jobs gained would have paid less than those lost, resulting in a net decrease in labor income. Oregon data on the number of jobs affected show that this pattern is being followed.

The effect of this approach would be less than that of a ban on nonrefillable containers, because throwaways could continue to be manufactured. They would doubtless form a diminishing share of the market, but their manufacture could be phased out slowly.

Mandatory deposit legislation may also result in a decline in tax revenues during the transition period. This would occur because a majority of beverage cans would become obsolete, as would a large percentage of container handling equipment, and because there might be a drop in beer sales. Estimates of losses in revenue from beer excise taxes and corporate write-offs for obsolete equipment in the first year of transition range from $271 million or less to $803 million nationally.²³ These figures would probably decrease if beer sales did not decline, and if the sale of beverage cans continued. Tax receipts in Vermont declined substantially, but the decline may have been partially attributable to the factors cited above, as well as to the fact that for several weeks before the law went into effect, large "stock-up" [5 ELR 50026] purchases were made. There was no reduction in excise tax receipts in the first year of a deposit system in Oregon.²⁴

Mandatory deposit legislation would also affect the consuming public, as increased handing costs and costs related to equipment changes in the brewing and soft drink industries are likely to be passed on to the consumer. Nevertheless, the consumer could pay slightly less, on the average, for beer and soft drinks under a mandatory deposit system, because he would have an alternative to the higher-priced "throwaways."²⁵ (In this regard, it is interesting to note that the price of soft drinks in the State of Washington, where no mandatory deposit law was in effect, rose by 12 percent in 1973.²⁶ In Oregon, there was a decline in the wholesale price; data on retail sales prices are not available.²⁷)

Mandatory deposit legislation may result in limitations on brands and sizes of beverage containers available to the consumer. In Oregon, for example, many imported beers and some brands of soft drinks cannot be obtained in the same sizes in which they were available before the law went into effect.²⁸ A few low-volume brands of soft drinks, and eight brands of beer, are no longer sold in Vermont. In the case of the beer particularly, however, it is not possible to tell whether the withdrawal from the market occurred because of the new law or for other reasons.²⁹

Additional, microeconomic factors must be evaluated. They include shifts from regional to local beverage distribution systems, and other types of inter-firm and inter-product effects.

Recovery and recycling of containers has been suggested as an alternative to returnable bottles.³⁰ Such a system would have definite advantages over present practice — it could reduce litter and the amount of solid waste that would have to be disposed of in landfills or by other means; it would reduce the amount of energy required to manufacture containers because less is needed to produce a container from recycled material; and less material resources could be required.

Though recycling is a valuable adjunct to a "returnables" system, it is not a substitute. There would be no reduction in the number of containers manufactured, and the decrease in litter and waste could be quite small. The savings in energy and material would not be comparable to those to be gained from using refillable containers. In addition, costs would be associated with recycling just as with a deposit system: for example, the containers would have to be gathered at a recycling center or reclaimed from waste, transported to the plant where new containers were to be made, prepared for recycling, and fabricated.

The Need for a Federal Solution

Considerations like those discussed above have led EPA to conclude that a phased-in system of returnable bottles should be instituted. This should be done on a national scale. The litter problem and its costs in hours and dollars are sufficiently widespread to be called national. The impact of the "no-deposit, no-return system" on consumption of materials and energy is national in scope, and significant inroads on this consumption can only be made nationally. Local regulation can have a substantial impact on the problems, but its effect is by definition narrow. The difficulty that a single jurisdiction faces when it attempts to deal with this problem is illustrated by the action of the Washington, D.C. City Council in refusing to implement a deposit measure unless all of the surrounding Virginia and Maryland counties and nearby cities did so.³¹ Nearly all town or county measures that attempt to cope with the problem are held up in court at present.

Piecemeal imposition (either within a state or between states) of a "returnables" system can bring inequities. The nature of the manufacturing and distribution system for beer and soft drinks might keep a bottler who wishes to retain his market from removing his operation to a site several hundred miles distant (though major bottlers might have some flexibility in relocating). A proliferation of local regulations, however, would be especially hard on those who sold regional or local brands, and whose sales were small.

Although the Oregon and Vermont laws appear to be working well, the likelihood that a significant number of states will follow their example seems small. The beverage container industry has little or no incentive to abandon voluntarily a system which it finds advantageous. This system is heavily subsidized — by the tax laws, by utility rates which permit bulk users to pay less, and even by refuse collection. Though high prices of energy and materials could bring about some shifts, it is unrealistic to expect that the system will be changed markedly in the future without strong impetus from government. Under pressure from the public and the threat of enactment of local ordinances, the beverage industry — can manufacturers, in particular — has begun to sponsor recycling programs. These programs are presented as an alternative to a deposit system, whereas they are at best only supplements to it.

Similarly, although higher prices for beer and soft drinks in one-way containers may cause some consumers to turn to "returnables," and irritation at litter [5 ELR 50027] may cause others to pressure distributors to stock more refillable bottles, neither of these factors is likely to cause a short-term, uniform, or significant change in current practices.

Conclusion

It would be hard to find a more conspicuous example of deliberate and reversible waste in our society than disposable beverage containers. The one-way container is symbolic of all of the sorts of waste that we practice. The "throwaway" container also provides a perfect example of the meshing of energy, economic, and environmental concerns. A step taken to save any one of the three will save the others also.

Like any other serious attempt to ameliorate our economic, energy, or environmental problems, solving the container problem will require that people change their habits, think a little more about what they are doing, and (in the case of the industry) invest some money. The objective is surely worth this price.

1. Statement of the Honorable John R. Quarles, Jr., before the Subcommittee on the Environment, Committee on Commerce, United States Senate, May 7, 1974.

2. U.S. Environmental Protection Agency, Second Report to Congress: Resource Recovery and Source Reduction, U.S. Government Printing Office 82-83 (1974), and unpublished material, Office of Solid Waste Management Programs (OSWMP), U.S.E.P.A.

3. Figures from table in T. Bingham & P. Mulligan. The Beverage Container Problem: Analysis and Recommendations, Research Triangle Institute; U.S. Government Printing Office (1972) (Hereinafter RTI Report). Cited in Second Report to Congress, p. 83.

4. RTI Report, p. 55.

5. RTI Report, p. 33.

6. RTI Report, p. 29.

7. RTI Report, p. 14.

8. RTI Report, pp. 5, 14.

9. Unpublished material in files of OSWMP, U.S.E.P.A.

10. 42 USC § 3251 et seq, ELR 41901.

11. Supra, n. 2.

12. Model Litter Control Act, Sec. 70.93.010 et seq., 1972; Rules and Regulations, Wash. Admin. Code 173-310-010 et seq., 1972.

13. An Act Prohibiting the Sale of Nonreusable or nonbiodegradable Beverage Containers, Revising Litter Laws, Providing Penalties for the Violation Thereof, and Making an Appropriation Therefor, and Declaring an Emergency, 34 S.D. Comp. Laws § 16C 1967 (1974 Supp.).

14. Oregon Minimum Deposit Act, Ore. Rev. Stat. 1971, Ch. 459, §§ 459.810-459.890; Litter Levy; Aid to Municipalities; Landfills and Recycling Centers, Title 10, Vt. Stat. Ann, Ch. 36, Sec. 1171, 1972. Ordinances requiring deposits have been enacted in, inter alia, Bowie, Maryland; Ann Arbor, Michigan; and Loudoun County, Virginia. The Ann Arbor measure was struck down by a court; the others are in litigation. Thus, the effectiveness of local measures has yet to be tested.

The Oregon Minimum Deposit Act, or "bottle bill" (ELR 43007), combines a ban on metal tab top cans with a mandatory refund system, under which retailers and distributors are required to accept empty bottles and pay consumers and dealers a specific statutory "refund value" for each such container returned.

In the most definitive judicial ruling thus far on the legality of state legislation concerning non-returnables, the Oregon law was upheld by the Oregon Court of Appeals on December 17, 1973 (American Can Company v. Oregon Liquor Control Commission, 4 ELR 20218). In response to the container manufacturers' most serious challenge, the court held that the statute "is a legitimate exercise of the police power, consistent with federal policy legislation, which does not impede the flow of interstate commerce and which does not discriminate against non-Oregon interests," and thus "is valid legislation under the Commerce Clause." The court also ruled that the statute does not violate plaintiffs' due process and equal protection rights. According to the court, the law represents a valid legislative judgment that the benefits to the state in reduced litter and solid waste disposal problems of legitimate state concern.

The purpose of the Hatfield bill is "to prohibit the introduction into interstate commerce of nonreturnable beverage containers." It would impose a mandatory two-cent deposit on containers which could be reused interchangeably by beverage manufacturers and bottlers, and a five-cent deposit on all other beverage containers.The bill would also prohibit metal beverage containers with detachable tab tops.

15. For example, Midwest Research Institute, The National Economic Impact of a Ban on Nonrefillable Beverage Containers, 55 (1971); cited in Second Report to Congress, p. 23.

16. Applied Decision Systems, A Study of the Effectiveness and Impact of the Oregon Minimum Deposit Law, Wellesley Hills, Massachusetts: draft report, September 1974.

17. RTI Report, pp. 153-155; cited in Second Report to Congress, p. 64.

18. Environmental Protection Agency estimated, based on material in MRI Report, supra, n. 15.

19. MRI Report, p. 55, cited in Second Report to Congress, p. 84.

20. ADS Report, supra n. 15, pp. II-2 and II-66.

21. Unpublished information, OSWMP, U.S.E.P.A.

22. RTI Report, pp. 58-59.

23. RTI Report, pp. 61-62.

24. ADS Report, pp. II-66-67.

25. Second Report to Congress, p. 85.

26. Gudger & J. Bailes. Economic Impact of Oregon Bottle Bill, Oregon State University Press 17 (1974).

27. ADS Report, pp. II-4 and II-67.

28. Second Report to Congresss, p. 84.

29. Unpublished information, OSWMP, U.S.E.P.A.

30. MRI Report; cited in Second Report to Congress, p. 85.

31. Washington Post, December 10, 1974, p. 1.

5 ELR 50023 | Environmental Law Reporter | copyright © 1975 | All rights reserved