Issue Backgrounder
Mandatory Deposit Law
Commonly known as
“The Bottle Bill”
Overview
Maine's Returnable Beverage Container Law (a/k/a the “Bottle Bill”) which is in essence a mandatory
deposit law, was intended to reduce litter and reduce the amount of glass, plastic and aluminum solid waste
being land filled. The law encourages bottle/can recycling by providing a financial incentive for consumers
to return their empty beverage containers to designated centers throughout the state where they reclaim a
deposit (15¢ for wine and liquor, 5¢ for all others) that was paid initially by the customer when the beverage
was purchased.
History
The Bottle Bill was established in Maine by a referendum in 1976 and became effective in 1978 and has
since been amended several times.
Amendments to the law in 1995 and 1999 established a fee and registration system that would allow for
regulatory oversight. The Maine Department of Agriculture (DOA) administers this law, and Maine
Revenue Services (MRS) is responsible for tracking the taxes and fees associated with the sale and
reclamation of bottles in the deposit system.
These amendments in the late 90's also expanded the number of beverages eligible to participate in the
deposit system (all beverages, except dairy and unprocessed cider), increased handling fees and attempted to
address unclaimed bottle deposits, which still exist today.
In 2004, another amendment increased handling fees again, and stated that unclaimed deposits become
property of the state. The provision also allowed industry competitors to “commingle” their empties
together, reducing sorting labor costs and time for redemption centers.
Effective in March of 2010, the handling fee was increased again to 4¢ per container. This change has placed
an additional financial burden on the distributors, already tasked with managing an increasingly complex
redemption process.
Among U.S. states, Maine currently has the highest handling fee and is the only state that requires a variety
of non-carbonated, non-alcoholic beverages to participate in the bottle deposit system.
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The Distributors' Role
How the Bottle Bill Works in Maine
1. When Maine beer and wine distributors sell beverages to retailers, they are required by Maine law to
charge a deposit fee (5 cents for beer and 15 cents for wine) to the retailer on each beverage container
sold.
2. The retailer then passes the container deposit fee along to the customer when the beverages are
purchased.
3. After the beverages are consumed, the customer returns their empty Maine bottles and cans to a
redemption center for a refund of the deposit fees the consumer paid at the time of purchase.
4. The redemption center sorts the containers by material type and by the company responsible for
picking up the containers.
5. Distributors send trucks to redemption centers to pick up their empties. Distributors pay for the
refunded deposits, and also pay the handling fee (4¢ per bottle/can) to the redemption center for
collecting and sorting the containers.
6. In the end, the distributors manage the process of recycling the containers, sending them out for
processing and reuse, or ensuring they are disposed of in an eco-friendly manner.
The current system:
Maine’s beer and wine distributors operate in a closed loop system that provides accountability to the
beverage deposit system. Beer and wine products that are sold to Maine’s retailers originate from local
Maine distributors providing a deposit tracking system for the purpose of monitoring returns.
Introduction of commingling: In 2004, the members of the Maine Beer and Wine Distributors
Association formed the Maine Beer and Wine Commingling Group. This group allows redemption centers
to combine thousands of items of beer and wine empties. As a result, redemption centers have seen their
sorting requirements significantly reduced saving them time and money.
Challenges with the system:
Fraud: Maine’s distributors are burdened with protecting against fraudulent bottles and cans coming into
the state from outside sources.
1. Since New Hampshire is not a bottle bill state, all containers that are purchased in NH without
deposits and returned and redeemed in Maine, as well as any empties that cross state lines
dramatically impact the economics of the bottle bill. This results in a financial burden on Maine
businesses by leaving them the responsibility for the deposits, handling fees, labor, and recycling costs,
for these immeasurable fraudulently returned containers.
2. Another economic challenge to the system is inaccurately filled bags and non-deposit (foreign)
containers. Short-filled bags and beverage containers that the distributors did not sell result in
significant economic losses to these businesses.
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Handling Fees: Maine’s distributors pay handling fees to retailers and redemption centers which are the
source of revenue for accepting and sorting containers. These fees have steadily increased since the inception
of the bottle bill, further increasing the costs of beverages to the Maine consumer.
In March of 2010, the handling fee was raised to 4¢ per container. This change places an additional financial
burden on the distributors already tasked with managing an increasingly complex redemption process. In
comparison to other states, Maine has the highest handling fee, while states such as Michigan and Oregon
have no handling fee at all.
Most Maine beverage consumers do not understand the complexity of the bottle bill and specifically the
hidden costs of handling fees. These fees significantly raise the costs of beverages to Maine consumers.
A new trend has evolved recently in the industry with many redemption centers offering premiums or
bonuses to consumers for redeeming their empties, some even providing 6¢ instead of 5¢. Consumers may
believe it is a great deal to receive an “extra penny” back for their 5¢ deposit, this "extra money" has to come
from somewhere. Due to this marketing technique, redemption centers continually appeal to the State
legislature for increases to their handling fees paid by distributors – despite the fact that many take this
money and give it back to consumers to encourage them to visit their facility to redeem beverages. Beverage
distributors pay over $30,000,000 in handling fees annually.
Redemption Centers: Initially, only retailers could operate as locations for consumers to redeem their
empty containers. This allowed distributors and retailers to track what beverages were sold and only redeem
those containers sold as part of the distribution agreements between the producers, distributors and retail
outlets. This limited the number of locations distributors needed to visit to retrieve empties, and these were
on the same routes as their deliveries.
To accommodate those retailers who either lacked space to store empty containers, or who simply did not
wish to redeem them. This resulted in numerous redemption centers being established, as a result of the
growth in redemption centers distributors incurred additional transportation costs.
Redemption centers continually appear before the Legislature for increases to their handling fees. Some
redemption centers appear to operate quite successfully on current handling fees. Other redemption centers
are not successful, and plead for increases to keep their businesses afloat. When a handling fee increase is
approved, it is also common for the number of redemption centers to increase in number. New businesses
are created and end up competing for a fairly stable amount of beverage containers. Redemption centers
need more volume of beverage containers to be financially viable. This is why some offer an extra penny
above the 5 cent deposit fee.
Reverse Vending Machines (RVMs): RVMS are devices used where consumers manually feed their
empties into a system that reads the barcode, pays the consumer, and sends a bill to the appropriate
distributor. Distributors are still responsible for picking up the material and paying deposits and handling
fees.
Regulation and Enforcement: There are two key concerns with the effectiveness of the bottle deposit
law:
1. The natural complications that arise when more than one state agency is involved in business regulation.
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The DOA and MRS manage different portions of the deposit system and, it is difficult to track the
effectiveness of the bottle deposit system from start to finish across multiple agencies.
2. It is difficult to regulate out-of-state producers that do not have to comply with the same state-based
regulatory system that beer and wine producers do across the county.
Juice and other non-carbonated, non-alcoholic drink containers carry a deposit in Maine only. There is no
way to indentify containers sold in the state vs. out of state. There is little oversight in how these products
enter the Maine market, but redemption fees must be paid out to consumers when they redeem the
containers.
In 2009, the Maine legislature passed a bill to allow limited quantities of wine to be sold to consumers by mail
directly from producers. The out of state wineries are exempted from the bottle bill, and these bottles still
end up at redemption centers, and are returned to local Maine distributors who did not participate in the
sale. This is an unfair playing field for in-state distributors who are required to participate in Maine’s deposit
law.
Rising Costs: Beverage distributors play a pivotal role in ensuring the deposit law works – but also bear a
substantial cost to do so. Investments in labor, transportation and warehouse space to collect and store and
sort empties from a growing number of redemption centers; the added staff necessary to sort and process an
increasing number of containers and increasing diversity of products at warehouse facilities and the costs
associated with fraudulent redemptions continue to rise.
Environment: The original intentions of the bottle bill were worthy to reduce litter and to increase
recycling. The bottle bill only captures 4% of the waste stream but is very expensive and cumbersome to
operate especially when you consider total miles driven by both consumers and distributors vehicles to
redeem and collect empty containers. This increased carbon footprint is doing even more harm to the
environment. Environmental goals have changed to include a more comprehensive approach.
Are there greener alternatives available today for the collection and recycling of beverage containers?
Consumers concern and awareness of the environment is far greater than when the bottle bill was
adopted.
Perhaps municipal curb-side recycling is a better approach?
Is single-stream recycling the way of the future? To protect the environment, distributors continue to
forge new efforts to increase recycling and make the redemption even more efficient and
environmentally friendly.
Conclusion
Maine's Beer and Wine Distributors will continue to play a critical role in ensuring that the empty beverage
containers that we sell are collected and processed consistent with current environmentally friendly methods.
It is important to evaluate the original mandate of the bottle bill in light of current environmental goals for
comprehensive recycling.
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