Testimony of

William C. Rennie, Vice President
Retailers Association of Massachusetts

Before the Joint Committee on Telecommunications, Utilities and Energy
October 7, 2009

Re: Bottle Bill legislation
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The Retailers Association of Massachusetts (RAM), established in 1918, is a statewide trade association of over 3,100 member companies.  Our membership ranges from independent, “mom and pop” owned stores to larger, national chains operating in the general retail, restaurant and service sectors of the retail industry.  The industry’s contributions to the Commonwealth include over $112 billion in annual sales; over $5.7 billion in annual sales and use taxes collected; 17% of all Massachusetts jobs; and operations in over 38,000 locations across the state.

On behalf of RAM, I would like to express our strong opposition to any legislative effort that seeks an expansion of the existing bottle bill.  It is the position of the Association that the current redemption system is deeply flawed and that the bottle bill should be repealed.  Any expansion of the law will do far more harm than good.  In the wake the recent 25% increase in the sales tax, the elimination of the sales tax exemption on alcohol sold in stores, and the loss of the Sales Tax Holiday, retailers across the Commonwealth are struggling with a dramatic decrease in overall sales and in customer traffic.  The cost of an expanded bottle bill and the creation of an entirely new collection system for containers not now covered would further burden tremendously, the already overburdened retailer.  It is certainly not the time to look to add to the high cost of doing business here in the Commonwealth.

There are numerous problems with the current redemption system, one being that the system is plagued by fraudulent returns.  Not all states bordering the Commonwealth have expanded bottle laws.  Both New Hampshire and Rhode Island do not have any form of bottle law.  To many individuals it is now a common practice to buy beverages or collect beverage containers in nearby out-of-state communities that do not impose a deposit and then redeem them in Massachusetts.  This practice comes with a high price tag for Massachusetts businesses and consumers.

In addition to fraudulent redemption, an increase in required bottle deposits in Massachusetts will lead to increased out-of-state purchasing of beverages.  Again, Massachusetts is bordered by multiple states that do not share our bottle redemption laws.  Our local businesses in border communities and neighboring cities and towns already on a daily basis deal with the loss of business to less expensive, less taxed border states.  With the new 25% sales tax increase and the removal of the sales tax exemption on alcohol sold in stores, the incentive was just recently made that much greater.  Expansion of the bottle bill will further exacerbate this problem.   

While the issue of competitiveness with retailers in border states is an important one, the ability to compete here in our own state is just as significant.  Smaller retailers, “mom and pop” family stores, face considerable challenges due to a lack of space and struggle to provide room for redemption collection areas.  The smaller retailer is already at a size disadvantage and that disparity grows as they are forced to devote valuable store footage to collection areas.  Small restaurants, package stores and local markets won’t have the room to safely store the copious amounts of beverage containers required for redemption under expansion proposals. 

While the bottle bill may have served to raise awareness of recycling many years ago, over the years, the tide has turned.  Consumers and citizens are now well educated on a variety of recycling programs and are environmentally conscious.  Curbside recycling has become the preferred method and we should focus our efforts on further promotion of those programs.  Massachusetts communities have recycling infrastructure in place, providing curbside and/or drop-off recycling programs, making a bottle bill obsolete and inefficient.  Also, in an era of rising fuel prices, separate, individual car trips to the local redemption center to return one’s beverage containers is by far, less efficient than utilizing curbside pickup programs.

On behalf of RAM and our more than 3,100 retail members, I urge you to reject any proposed expansion of the bottle bill and to repeal this regressive consumer tax. 

I thank you for the opportunity to comment on this important matter and please do not hesitate to contact me if I can be of any assistance to you in your deliberations.