On September 27, 2021, aluminum cans pile up in hoppers at the Schupan & Sons Inc recyclable container processing facility in Wixom, Michigan. Lori Chapman | Live

Since the 1970s, Michigan’s bottle deposit law has been a part of the lives of consumers, retailers, and beverage distributors.

It set the highest bottle deposit law in the country with Oregon at a price of 10 cents a bottle-it promotes recycling. In 2019, before the COVID-19 disruption, Michiganans brought back approximately 89% of returnable containers. Although Michigan’s rate of return has declined slightly, it is still higher than the other nine states with deposit laws.

Proponents of Michigan's bottle deposit policy point out that the high recycling rate is successful, especially when compared to consumer recycling rates for other products, and hope to see it expand. But in general, retailers believe that this process is unsanitary and costly, and that expansion will make it more difficult.

MLive’s latest documentary "Michigan’s Bottle Bill: Sorting in Tricky Situations" introduces all the active parts of the Michigan’s bottle deposit system, its progress, and what some believe needs to be improved.

If the YouTube video does not appear above, just click this link to watch it immediately.

How the deposit law works

According to current Michigan law, distributors must charge a deposit of 10 cents for each returnable container when selling products to retailers. The retailer then passes the cost on to the customer and refunds it when returning the container. When the distributor removes the empty bottle, the retailer will get a refund, and any remaining unclaimed deposit will be distributed to the retailer and the environmental cleanup department at a ratio of 25-75%.

In 2019, the total amount of unclaimed deposits was US$43 million. In 2020, months after the COVID-19 pandemic caused bottle deposit services to be disrupted, this number surged to US$108 million.

James Clift, deputy director of the Michigan Department of Environment, Great Lakes and Energy, said that a big unknown is whether the exchange rate of bottles and cans will be higher in 2021. The department is still weighing how to allocate approximately $81 million to collect. He said that while considering environmental clean-up, the fund may be significantly reduced next year.

A customer uses a reverse vending machine to return glass bottles at a grocery store in Michigan. Jeremy Marble | Live

The beverage distributor is ultimately responsible for recycling the recyclable containers. For large retail stores in the Lower Peninsula (approximately 60% of the state's recyclables), the distributor signs a contract with a company called UBCR to ship all the waste to Schupan Recycling. Schupan has factories in Wixom, Grand Rapids, and Kalamazoo, handling most of Michigan's recyclable cargo.

On September 27, 2021, outside the Schupan & Sons Inc returnable container processing facility in Wixom, Michigan, a front-end loader moves broken glass from recycled bottles into a trailer. Lori Chapman | Live

What is one factor that significantly complicates any major changes to Michigan’s current bottled deposit laws? Because it is approved by voters through a voting initiative, any change to the policy requires a 3/4 majority vote in both houses of the legislature to take effect. This means that any update requires the support of both parties.

This has not stopped legislators and others involved in the system from suggesting updates.

Many proponents of the law have cited high bottling and return rates as indicators of effective incentives, and have recommended that other beverage containers be included in the product portfolio that consumers can take back.

Senator Sean McCann of D-Kalamazoo has been calling for expansion of the state's bottling laws for years. His current legislative Senate Bill No. 167 will expand the state’s 10-cent deposit to include all non-carbonated beverages except milk containers.

"It's been a long time since 1976," McCann said. "The participation rate of returnable items is much higher than that of non-deposit items... it is not very effective."

Representative Christine Morse of D-Portage introduced the same legislation in the House of Representatives, House Bill 4331.

The legislation has not yet exceeded the committee level, although environmental groups support the idea on the grounds that this change will be a consumer-friendly way to increase the amount of recycling and keep the environment clean.

The empty cans on the truck were sent back to West Side Beer Distributing in Romulus, Michigan. Jeremy Marble | Live

"When the bottling bill was first enacted, people couldn't imagine the number or types of disposable beverage containers we consumed every day," said Sean Hammond, policy director of the Michigan Environmental Commission, when the bill was introduced. The legislation will be "a consumer-friendly change that will not only keep our environment clean, but also allow Michiganans to return to bottles and jars more easily."

Retailers and distributors are concerned that adding additional containers to the mix without additional support may make the current system unable to handle it.

Related: Michigan Democrats propose to expand bottled deposits to all beverages except milk

Some people prefer to see the bottle deposit system abolished altogether.

Retailers in Michigan have historically been frustrated with the bottle deposit program, believing that the current setting places an unfair burden on grocery stores and prevents the state from developing a comprehensive recycling policy.

"In an ideal world, we would like the bottle deposit law to be repealed," said Amy Drum of the Michigan Retailers Association. "We thought it was old and inefficient, but we knew we needed a recycling solution."

Part of the concern is the cost of staffing bottle storage facilities, although another issue is cleanliness-retailers say that the items returned to them are usually dirty, which means that additional resources are needed to keep the retail area clean.

At the end of 2018, Congressman Joe Bellino (R-Monroe) proposed to completely abolish the bottle deposit law during the Lame Duck meeting of the legislature, arguing that these materials should be processed by the community recycling program.

His proposal never exceeded the committee level.

Fighting the border bottle

One policy change that many Republican and Democratic lawmakers would like to see is to impose additional penalties on those who may use the bottle deposit law by crossing the border.

The state adjacent to Michigan does not currently have a bottle deposit law. As long as the product is also sold at a Michigan retailer, bottles and cans from outside the state can enter the system.

This is actually the plot of the famous plot of "The Story of Seinfeld", when Kramer and Newman made a plan to profit from a 10-cent deposit in Michigan, while a deposit in New York was only 5 cents.

"It may not be cost-effective to be from New York, but it is definitely cost-effective to be from Ohio, Indiana and Wisconsin," said Spencer Nevins, chairman of the Michigan Beer and Wine Wholesalers Association.

Michigan's 10-cent deposit is tied with Oregon for the highest deposit in the country. Jeremy Marble | Live

The main concern of industry officials is that distributors may bring in applicable beverages from outside the state without paying a 10 cent deposit, which will result in losses for Michigan companies and the state’s unclaimed bottled deposit fund.

In June, the Michigan House of Representatives passed four bills-House Bill 4780-4783-which would strengthen deposit reporting requirements for distributors and increase penalties for failure to do so. In October, the Senate Regulatory Reform Committee reported on these bills.

Currently, Michigan retailers only accept bottles and cans from suppliers sold in their stores. One concept proposed is to allow universal redemption, or to allow consumers to bring eligible empty wine back to any store, no matter where they originally purchased it.

Nevins stated that universal redemption "will be amazing for consumers" and will ultimately help to recycle more empty containers.

But he said that ensuring that stores and suppliers can handle the influx of containers will require significant investment.

"Can it be done? Absolutely," he said. "It must be done in the right way... I think there is a lot of positive discussion about all these things, and we hope that soon we will find a truly effective solution for consumers."

The legislation proposed by McCann and Morse includes provisions for universal redemption at large retailers.

In other states, stores are not the only point of contact for residents who retrieve cans—you can also choose to take them to a regional exchange center.

People returned the containers to the BottleDrop Redemption Center near North Portland Delta Park on Wednesday, April 1, 2020. The center has developed social distancing measures to help prevent the spread of the coronavirus during the pandemic. Dave Killen | Oregonian Dave Killen

Although Michigan law permits this, the high upfront cost of establishing independent redemption centers and maintaining their maintenance means that there is not much incentive to set up them.

"Theoretically, the law allows the establishment of these exchange centers, and anyone can set up these exchange centers, but now there is really no incentives, because you can set up exchange centers, but retailers still have to accept those bottles and cans in the store," De Ram said.

Drumm said that if we work together to encourage the community to establish regional exchange centers and find ways to improve process efficiency, these centers may bear the pressure of some grocery stores to handle large returns.

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