Proposed deposits on bottles, cans in Minnesota worries businesses
MOORHEAD, Minn. - A proposed 10-cent deposit on bottles, cans and other beverage containers sold in Minnesota has area retailers worried that the push to increase recycling could cost them business.
Matt Leiseth, president of Hornbacher's grocery stores in Fargo-Moorhead, said he hasn't formed a definite opinion on the issue, which is expected to be taken up by the Legislature this year. But Leiseth doesn't want to see Minnesota stores put at a disadvantage.
"The playing field isn't level when Minnesota and North Dakota have two different sets of rules," Leiseth said Wednesday.
"When the taxes went up for cigarettes in Minnesota, cigarette sales in border towns decreased. Where did they go buy their cigarettes? Fargo," Leiseth said.
The Minnesota Pollution Control Agency last week released its study on the costs and benefits of a 10-cent per container recycling deposit on bottles, cans and other containers.
The MPCA report estimates the deposit could attract another 107,000 tons of containers a year for recycling, or 1.9 billion containers.
It estimates that would raise the state's recycling rate from 45 percent to 84 percent. About 77 percent of containers would be collected at planned redemption centers (and from bars, restaurants and schools). Another 7 percent of the available containers would be collected by private recyclers, nonprofits and materials recovery facilities, the study said.
Beverage deposits and the sale of processed materials are expected to bring in $545 million a year, while costs include $395 million in refunded deposits and $179 million to run recycling redemption centers around the state.
The redemption centers would be run by nonprofit organizations created by the Legislature. They would be funded by $76 million in sales of recycled materials, $74 million in deposits not collected by consumers, with the remaining $29 million charged to beverage producers.
California, Connecticut, Hawaii, Iowa, Maine, Massachusetts, Michigan, New York, Oregon, Vermont and the Pacific island territory of Guam have "bottle bill" laws on the books. Most of the deposits are 5 cents. Michigan has a 10-cent deposit, and California's deposit is 10 cents for containers over 24 ounces. In Maine and Vermont, the deposit on liquor containers is 15 cents.
Minnesota's deposit proposal has drawn opposition from Recycle Smart Minnesota, a coalition of retailers, food and beverage businesses, farm groups, grocers, restaurants and distributors.
Recycle Smart says the state's plan will hurt consumers because it doesn't take into account the cost of transporting containers to the recycling centers, which it pegs at $40 million.
The group also says the MPCA study understates the amount of material now being recycled, and doesn't adequately address the prospects of refund fraud, as people or firms from bordering states may try to cash in containers on which they didn't pay Minnesota's deposit.
"Minnesota is vulnerable to fraud with a 10-cent deposit scheme, since it has neighboring states on all sides," said Jamie Pfuhl, president of the Minnesota Grocers Association.
The MPCA proposal calls for each county to have at least one redemption center, with one additional center per every 15,000 people.
The MPCA says retailers can volunteer to act as deposit-return locations and be compensated. In addition, the program may include reverse vending machines capable of reading bar codes to determine if containers are eligible for a deposit refund.
At the Zip Trip convenience store in Hawley, general manager Glenda said collecting a deposit can be "a pain in the butt."
She's worked in Iowa stores, which collect deposits of 5 cents per container.
"My personal opinion is I think it would be a really big pain," said Glenda, who wouldn't give her last name. "Being so close to Fargo, I'm already losing a lot of business" because of the cigarette tax hike.
Nathan Graves, owner of Jubilee Foods in Breckenridge, said he'd rather the recyclables are collected at centralized sites.
"It's kind of a pain in the store. All of the pop cans come in and they're half full of pop or cigarette butts," Graves said.
"Overall, it would be a good thing," Graves said, as long as it doesn't become a burden on stores.
"If they did that, they'd get a lot less push back from the stores," Graves said.
Paul Cote, who works at Bridgeview Liquors in Moorhead, likes the idea of more recycling, but he worries the cost of the deposit - and having to take empties back to recoup that cash - will push customers to Fargo.
"Obviously, we'd lose business because you could just cross the river," Cote said.
The MPCA report says there may be jobs lost, mainly at supermarkets (perhaps 214 positions shifting to neighboring states), but that there could be a net gain of 1,064 jobs statewide from the initiative.
The MPCA will send the report and results of a public hearing to the Legislature in February.