IBWA Testimony on Expansion

of the Massachusetts Bottle Deposit Law

Joint Committee on Energy

Tuesday, June 24, 2003

Boston, Massachusetts

Chairman Binienda and members of the Joint Energy Committee, my name is Troy Flanagan and I am the Director of Government Relations for the International Bottled Water Association (IBWA).

IBWA is the trade association representing all segments of the bottled water industry. Founded in 1958, IBWA member companies include U.S. and international bottlers, distributors and suppliers. IBWA works closely with the U.S. Food and Drug Administration (FDA), which regulates bottled water as a packaged food product, and with state governments to set stringent standards for safe, high quality bottled water products. IBWA also has a Model Code that sets strict standards for bottled water. As a condition of membership, IBWA bottlers must submit to an annual, unannounced inspection for compliance with the Model Code by an independent third party.

Open Distribution System for Bottled Water

For manufacturers, distributors and retailers of bottled water, bottle bills create a financial and logistical nightmare by placing an undue strain on their operations and adding substantial costs to the products. Bottled water has an open system of distribution through a wide variety of outlets that sell and distribute the product. Unlike the beverages currently covered by Massachusett’s bottle deposit law, bottled water manufacturers do not have direct delivery to retail outlets or franchise territories like beer distributors or soft drink bottlers. Bottled water manufacturers sell to food wholesalers, to drug wholesalers, directly to chain retail stores, to distributors of other products and services, to consumers directly, to name just a few. Geographic areas or brands of products do not necessarily define these distribution channels. One distributor may carry only a few different brands of bottled water and service a variety of retailers.

Because of this distribution system, the inequities of the current system among retailers, particularly, and distributors will only be exacerbated. With a geography and population as diverse as Massachusetts’, the redemption of beverage containers will add substantial costs to bottled water. As an example, a distributor in Quincy, MA, may service grocers in Cambridge, MA; Naushua, NH; Woonsocket, RI; and Exeter, NH. This distributor may carry Monadnock brand of bottled water, but his customers have redeemed Vermont Pure’s and Castle Springs’ brands of bottled water. How will the costs and the return of the bottled water bottles be handled? Obviously neither the distributor nor the retailer has a relationship with Vermont Pure or Castle Springs who are located in Vermont and New Hampshire respectively.

As a corollary, in times of disaster, the bottled water industry provides an emergency source of water for those in need. The industry has a long history of assistance and they have gladly donated bottled water to people and communities when they have been struck by disasters. By imposing a bottle deposit on containers of bottled water how would the accounting for donations to the Federal Emergency Management Agency, Salvation Army, or the Red Cross, such has happened 18 months ago, be handled? Will it just be a cost expected to be paid by the bottler? How will the returned bottles be integrated into the distribution channels? Will retailers be expected to pay deposits to consumers for those bottles?

Conclusion

Any attempt to increase recycling rates or reduce litter has to be evaluated to determine whether the means is worth the ends. Implementing a vast bureaucracy and creating logistical and financial hardships for all parties involved to capture a small amount of the total municipal solid waste stream may not be the best solution.

Rather than modifying the bottle deposit system, IBWA urges the Committee to study all the potential options for improving recycling and reducing litter. A long-term solution needs to be developed to assist consumers, business, and government in establishing a workable, efficient system for recycling and litter reduction. A shared responsibility between all producers and users of packaging must comprise any successful solid waste and/or litter reduction program.

Thank you for the opportunity to testify.

M. Troy Flanagan

Director of Government Relations

International Bottled Water Association

1700 Diagonal Road, Suite 650

Alexandria, Virginia 22314

Tel: (703) 683-5213 ext. 120

Fax: (703) 683-4074

flanagan@bottledwater.org

www.bottledwater.org