Beverage distributors push for portion of the money in Michigan's bottle deposit law

Posted at 7:35 PM, Aug 14, 2020

Do you ever wonder what happens to the bottles and cans that you don't take to the grocery store for a dime refund?

Most of the money, 75 percent, goes into the state's Cleanup and Redevelopment Trust Fund for environmental remediation, which EGLE uses to clean-up contaminated sites around Michigan; the other 25 percent goes to retailers.

A new package of bills aim to change that breakdown, once again giving beverage distributors a piece of the pie. The original law went on the books in 1976. When it did, president of the Michigan Beer & Wine Wholesalers Association Spencer Nevins said distributors received a portion of the money to build necessary infrastructure to sort the returnables.

“You’ve got to sort green glass from clear glass, glass from aluminum. So there was a huge infrastructure cost. So the way the bottle bill first passed, all those unclaimed deposits were left with the distributors to pay for it, and they did," he said.

Nevins said the equipment hasn't been updated in decades, and adjustments in the law over the years he said, cut distributors out.

Under the proposed changes, including a bill co-sponsored by State Rep. John Chirkun from Roseville, the breakdown would be as follows:

  • 50 percent to EGLE
  • 25 percent to retailers
  • 20 percent to distributors
  • Five percent to law enforcement for the purpose of combating bottle deposit fraud

“We’re losing out on millions of dollars in revenue," said Rep. Chirkun. "People are going out of state to buy their pop and their beer and they’re bringing it back here, selling it where they don’t pay the deposit on it.”

He said the five percent allocated to police would give the law some teeth, and hopefully he said, deter illegal deposits.

COVID-`19 closed bottle return facilities throughout the state for a few months, larger grocery stores are now once against accepting deposits. Chirkun said there's more than $80 million worth of returnables accumulated during that time.

“It’s estimated that it’s going to take six months for retailers or distributors to clear the massive backlog of bottles and cans," he said.

“This aging equipment is starting to fall apart and it needs to happen," Nevins told 7 Action News of the proposed change.

EGLE is against the measure. Spokesperson Jill Greenberg said in part that it "..would take unclaimed bottle deposit money away from contaminated site cleanup and redevelopment in Michigan communities."

You can read the full statement below:

The Michigan Department of Environment, Great Lakes, and Energy (EGLE) appreciates the efforts of our industry partners to combat bottle return fraud and administer the bottle return law. However, the agency opposes this proposal that would take unclaimed bottle deposit money away from contaminated site cleanup and redevelopment in Michigan communities.

Currently, EGLE receives roughly $25 million annually from the unclaimed deposits, all of which goes to assessment, cleanup and redevelopment of contaminated sites in Michigan as well as pollution prevention efforts. In the current year the funding supports 130 staff who are responsible for working on more than 100 sites across the state. The money also helps leverage federal funding that requires matching dollars.

Examples of contaminated sites EGLE is working on include the EPS site in Madison Heights where hexavalent chromium was found leaking onto I-696 in December, the Allied Paper site in Kalamazoo where 80 miles of river are contaminated with PCBs, and contamination from activities at the Camp Grayling National Guard training facility in Grayling.

Michigan has approximately 24,000 contaminated sites, and resources to only fully address a small percentage of them. The loss of unclaimed deposit dollars will further diminish the state’s ability to protect the environment and keep Michiganders healthy.

Uncertainty over revenue impacts in the wake of COVID-19 make for a challenging time to revisit this law and the allocations of unclaimed deposit money – both of which were initiated and approved by Michigan voters. EGLE looks forward to continued discussions on the matter.