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The recently passed state budget includes an expanded bill that has the beverage industry in a race to repeal what it calls a flaw that would cost the companies millions and result in sticker shock for the consumer.
The expanded bottle bill legislation, with a current effective date of June 1, will require a unique Universal Product Code (UPC) for all bottles and cans sold in the state. The state anticipates generating $115 million from this because it would make it impossible for cans and bottles to be redeemed for five cents in any state but New York.
“The state-specific UPC code only adds to the significant cost pressures already faced by businesses in New York,” said Marsha Gordon, president and CEO of The Business Council of Westchester. “Not only will this requirement increase manufacturing and distribution costs that will be passed on to the consumer, but it sends the wrong signal to companies looking to relocate here.”
The Business Council hosted a roundtable discussion April 23. Heineken USA, Krasdale Foods and Danone Waters of America Inc. were represented.
Mitch Klein, vice president of government relations for Krasdale Foods, said the UPC change will cost the company millions of dollars in addition to “double slotting,” or requiring the company to have a separate warehouse for all product shipped to New York.
“It”™s a bad idea; it”™s a bad concept and it should be eliminated from state law,” said T. Daniel Tearno, senior vice president and chief corporate relations officer for Heineken USA.
The bill would see water bottles and other currently nondeposit bottles bear a deposit.
Bottlers are looking for an amendment to the budget law to correct what the beverage industry calls “mistakes.”
“The current Returnable Container Act is unworkable and as it now stands will have several unintended consequences, which may include a total reduction of revenue for New York state”™s budget from revenue derived from bottled water because the RCA, unless mitigated, will make it extremely difficult for more than two-dozen companies to sell their products in New York, thereby removing revenue from the state budget,” said Michael Neuwirth, senior director of public relations for Danone Waters of America Inc.
“This labeling requirement demands a significant financial investment and a tremendous amount of work and modification to our brewery in Holland,” said T. Daniel Tearno, senior vice president and chief corporate relations officer for Heineken USA. “It is not feasible or realistic to have updated product packaging on New York state store shelves by the June 1 implementation date.”
Tearno said a herculean effort would make Jan. 1, 2010, a possibility for accommodating the new law.
If enacted, one domino is already poised to fall: Pennsylvania”™s Yuengling Brewery has said it will stop selling in New York.