Thursday, July 16, 2009

Are Beverage Distributors Hurt by the Bottle Bill?

Yesterday's bottle bill story in the News Journal included these revealing comments from one beverage executive:
Chris Tigani, president of World Class Wholesale and former head of NKS Distributors, disputes the windfall notion, but supports repealing the deposit.
He said the deposit isn't a profit source for liquor distributors. If half of the bottles are returned, the administrative costs of collecting and recycling them offset any profit from keeping the deposits on the other half.
"Because of this economy that we are in, redemption rates have gone up and we expect them to go up even further," Tigani said. If the rates keep increasing, eventually it's going to be a cost for the distributors to collect and recycle them.
So redemption rates are up? Maybe the nickel deposit is working.
He also let us know that, if redemption rates keep increasing, then it will be a cost for distributors, which suggests that for now they are coming out ahead. But whether distributors are making money on the deposit or not is another issue. I'm interested in increasing recycling rates.

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