Re-profitizing on the Backs of Hawaii's Residents

Representative Hermina M. Morita
Chair, House Committee on Energy & Environmental Protection
State Representative, District 12 (East/North Kauai & East Maui)

I had hoped that the bottle bill would provide for an intelligent discussion on how to solve a growing solid waste problem. However, with the recent publication of an ad by Hawaii Citizens for Comprehensive Recycling, a group comprised of Pepsi-Cola, Coca-Cola, Anheuser Busch, Inc. and other members of the Hawaii Food Industry Association, the debate, unfortunately, will be reduced to combating that group's half truths in a highly politicized arena.

Simply put, this whole issue is much like the Chevron's gasoline overpricing scheme. How much wool can be pulled over the consumer's eyes before we all say enough is enough? No one objects to business making a profit. We just object when business decisions and resulting profits are gained through actions that place unwarranted costs and burdens on our communities. Where is corporate morality as members of this community?

First of all, at the end of 2001 Legislative session, a challenge was given to the beverage industry to devise a workable, cost-effective program that could be implemented statewide. The industry returned in January to propose curbside recycling funded by increasing fees for garbage and tipping charges, and implementation of a pay as you throw system for rural areas that do not have residential curbside service and where residents must take their garbage to a transfer station.

I find it disingenuous for the beverage industry to label the bottle bill as a tax when its own proposal increased fees and taxes. Furthermore, the industry's proposal did not address litter, will not have statewide application, and will probably result in more illegal dumping. And, the industry proposal did not address the trend of beverages consumed away from the home that, more than likely, will not end up in a residential curbside collection bin.

The beverage industry has the option of making 2-cents less profit on a beverage by absorbing the handling fee. However, they have framed the bottle bill as a "tax" by passing off the handling fee to the retailer and consumer. But more importantly, whether the bottle bill passes or not Hawaii's consumer must still pay for the disposal of beverage containers. We will pay either the handling fee that the beverage industry will not absorb and take as profit or through increased garbage collection fees or property taxes or other mechanisms that fund our solid waste programs should we choose to do nothing.

What the bottle bill attempts to do is address disturbing trends in the beverage industry. We are seeing an evolution of drink packaging from glass bottles to cans and now to plastic. We are experiencing a growing market for individual size, to be consumed-on-the-go beverages from soft drinks, ice teas, water, sports drinks and juices as well as beer and other mixed alcohol drinks.

According to a September, 1996 Beverage World article, bottlers and retailers reap larger profits through changes made in packaging. [1] This change has aggravated into a solid waste nightmare. Still, the industry refuses to take responsibility for its choice of containers that have little or no recycled material content and are very difficult to dispose of. Where is corporate accountability in this issue?

The article begins, "Let's talk about money! If you know a bottler in this country who isn't making record profits right now, then something is dramatically wrong with his operation. Volume with profit is the current norm. . . something's going on to raise profitability, and the answer is packaging."

The article continues, "We must give significant credit to packaging for re-profitizing the entire industry." The packaging discussed is the move from the larger aluminum can to a 20-ounce, no return plastic bottle and a one-liter plastic bottle. The article reveals that one must sell 26 cases of cans for every single case of 20-ounce, no return one delivers to make the same dollar profit.

This article exposes a root cause of Hawaii's growing solid waste problem and why many other areas of the country are cutting back curbside recycling programs. From 1994 to 1999 the number of plastic beverage bottles sold in the United States increased by 79 per cent, from 23 billion to 41 billion. The number of aluminum beverage cans sold nationally decreased during that same period. With the exponential sales of single size beverage and the increased use of plastic, these containers end up in our landfills. High value aluminum cans that subsidize recycling programs are being taken over by low or no value plastic containers.

Yes, call the contact number of the Hawaii Citizens for Comprehensive Recycling but only if you want the "canned" propaganda of the National Soft Drink Association on killing bottle bills. The recording is just a "recycled" message from the $14 million in campaign contributions aimed at defeating the National Bottle Bill between 1989 and 1994 and the $3.2 million to defeat expansion of the Oregon bottle law in 1996, just to name a few of the anti-bottle bill campaigns funded by the industry.

Don't be fooled. If you want a real solution to our solid waste and litter problems urge your Senator or Representative to support the bottle bill.

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[1]"These two packages, which in the composite controlled a combined 9.8 share in 1994, currently account for 13.7 percent of store volume, with continued growth foreseen. With a profit per case for the bottler of $5.34 on 20-ounce NR and $4.15 on 1-liter, the share growth is warmly welcome. Your customer welcomes the growth too since retailers' average profits per case are $8.86 and $4.98 respectively. These two high-profit packages are charting a 35-percent annual growth rate. If you look at your internal numbers and see you aren't realizing a combined increase of some 25 to 40 percent over last year, then you are off track and probably performing at below national standards,"

page 83, Kent Phillips, Beverage World, September 1996