Michiganders hold $50M in unredeemed bottle, can deposits

DETROIT (AP) - Fifty million dollars is a whole lot of dimes.

That’s how much Michigan residents hold in beer, pop, and other bottles and cans with 10-cent deposits accumulated since late March, when an emergency order by Gov. Gretchen Whitmer stopped redemption at supermarkets and other stores because of the coronavirus pandemic.

That number grows by 70 million unredeemed cans and bottles a week, Tom Emmerich, chief operating officer of Schupan & Sons Recycling told the Detroit Free Press. The company, with processing facilities in Wixom and Wyoming, processes aluminum cans and plastic and glass bottles from Michigan’s beer and pop distributors, who in turn pick them up from the supermarkets, party stores, gas stations and other places where people redeem their 10-cent deposits.

“Consumers are not putting these containers at curbside, they’re not throwing them away - yet,” he said.

“We also know there are a tremendous number of charities who are working with different communities to collect deposit containers until the stores start taking them back.”

Schupan and Sons typically processes about 160 million cans, 100 million plastic bottles and 100 million glass bottles per month, Emmerich said. That has ground to a halt under Whitmer’s COVID-19 order. It has left the industries reliant on Michigan’s recycled containers - especially can and bottle-makers - scrambling to find other supplies, including more expensive, non-recycled material, or glass that takes more energy to produce a first time than it does a second or subsequent time.

No one has a bigger stake in when bottle and can deposit redemption can resume than Marc Schupan. The CEO of Schupan & Sons is also a principal in UBCR LLC, the company that collects, transports, and processes empty beverage containers for Michigan’s largest retailers, and TOMRA, the company providing reverse vending machines to take back bottles and cans at larger stores.

“I understand the governor is trying to protect us,” he said.

But bottle and can returns “absolutely can be done safely. And we’re the only state right now that isn’t redeeming.”

Those bottles and cans piling up in people’s closets, garages and sheds aren’t going away. They will ultimately have to be processed, and that can’t happen all at once, Emmerich said.

“We’re probably looking at 20 to 25 weeks to dig ourselves out of this issue,” he said.

Messages left with Whitmer’s office by the Free Press were not returned.

Whitmer’s “Stay Home, Stay Safe” executive order March 23 declared that while grocery and convenience stores would remain open, bottle return services within them were not considered critical infrastructure. Large store chains and retailers associations had appealed to stop bottle and can redemption to help protect their employees from COVID-19.

According to the U.S. Centers for Disease Control and Prevention, the coronavirus is spread from person to person in close contact via inhaled respiratory droplets. While “transmission of novel coronavirus to persons from surfaces contaminated with the virus has not been documented,” recent studies indicate the virus can live on surfaces for hours or even days.

Ten U.S. states have bottle and can deposit programs: Michigan, California, Connecticut, Hawaii, Iowa, Maine, Massachusetts, New York, Oregon, and Vermont. Amid COVID-19, every state has allowed retailers or collection facilities the right to limit or stop bottle and can returns without penalty, and some states reduced the number of collection sites.

“Michigan is kind of unique in shutting down its entire redemption system,” said Scott Breen, vice president of sustainability for the Can Manufacturers Institute, a trade organization for companies making aluminum beverage and steel food cans, big users of recycled aluminum.

An aluminum beer or pop can is made of 73% recycled content, with 43% of that coming from recycled beverage cans, Breen said.

“We rely on getting those used beverage cans back, so we can keep that high recycled content,” he said. “Forty percent of the cans we recycle nationally, we get from those 10 states (with deposits).”

The more a company reliant on recycled aluminum has to use new metal, “it just raises the cost … it just gets passed on to the public,” Schupan said.

It’s a similar story for glass bottle and jar manufacturers.

“From our perspective, Michigan is a key supply state” of recycled bottles, said Scott DeFife, president of the Glass Packaging Institute, a trade association representing glass container manufacturers in North America.

“The quality of the material is high - it’s needed for production. Now that we’ve had time to adjust to a new normal, it’s clear that the material itself is not the risk here. Just like any other commercial enterprise, it’s practicing the social distancing, adhering to the public health guidelines, pacing, spacing.”

Michigan is typically a bottle and can recycling star, ranking third behind only much more populous California and New York. That’s attributable to two key aspects of the state’s program: its 10 cents per bottle or can deposit, much higher than most states’ nickel or pennies in redemption value, and one of the most simple return systems in the country for consumers, allowing people to take their returnables not to a recycling site but to the store where they purchased them.

Michigan returned more than 90% of its deposit bottles and cans for recycling every year until 2018, when the number dipped to 89%. Total refunds in Michigan have ranged from $346 million to $425 million per year since 2000, according to the Michigan Department of Treasury.

The state Treasury Department collects unclaimed deposits, known as escheat, with 75% of the money going to the state’s Cleanup and Redevelopment Trust Fund and the other 25% returned to retailers. Michigan had a record $42.8 million in escheat in 2018 - and that number could soar this year if people running out of space to store bottles and cans during the coronavirus redemption ban give up and begin disposing of them in the trash or curbside recycling.

“The deposit money building up in Michigan could be used to modernize Michigan’s deposit system with no-touch options in the form of RVMs (reverse vending machines),” which are safer for those taking the returnables, said Liza Tucker, a consumer advocate who has researched bottle and can deposit programs for the nonprofit ConsumerWatchdog.org, based in Santa Monica, California.

“This would be a positive use of consumer money at a time when deposits have literally become a de facto tax.”

Reverse vending machines are often found in chain stores such as Walmart, Kroger and Meijer. A customer inserts bottles and cans into a machine, which scans their bar code to ensure they are eligible for the Michigan 10-cent deposit refund. The cans and bottles then fall into bins, and the customer receives a printed receipt redeemable in the store. When a wheeled bin is full, a store employee moves it out of the machine to a holding area. When enough bins are ready for collection, a semi-trailer truck hauls them away, Schupan said.

“As far as coronavirus goes, it’s a lot more dangerous for a store employee to stock shelves than to deal with RVM machines,” he said.

Schupan’s companies, along with the Michigan Beer and Wine Wholesalers Association and Michigan Soft Drink Association, have proposed to the governor’s office a phased-in resumption of bottle and can redemption that would start at the largest chain stores with reverse vending machines.

“Retailers, particularly in this first phase, have to be allowed to mitigate the flow of containers through their store in a safe, orderly fashion,” Emmerich said. “They have to be able to set limited hours, enforce social distancing requirements, have the ability to limit the number of containers anyone can redeem at one time.”

Redemption could be further opened up to smaller stores with less automated systems over time, until when coronavirus concerns are lessened and the recycling system is caught up and “everything goes back to normal,” he said.

Some discussion has occurred with representatives in the governor’s office since the group’s restart plan was submitted in April, but no plans have yet been worked out, Emmerich said.

State Rep. Joe Bellino, R-Monroe, has a unique perspective on can and bottle returns. He grew up in his family’s beer and wine distributorship business, and he presently owns a party store in Monroe.

“If we’re going to shut businesses down, and we’re going to hurt the economy because we don’t want people to die, this” stoppage of bottle and can returns at stores “has to be included,” he said. “But people are getting antsy - they want to know when they can bring them back.”

Bellino is not a fan of Michigan’s deposit law. He introduced a bill last fall to do away with the program, that didn’t gain traction.

“We suck at recycling as a whole, yet everybody thinks they are God’s gift to recycling because they take their bottles and cans back to the store,” he said.

Michigan’s overall recycling rate is 15%, half of the national average.

Bellino noted that aluminum is by far the most valuable item found in recycled materials - “there’s no money in the glass, the paper and the cardboard.” In states without bottle laws, cans are in the mix of recycled materials, and help generate funds to expand recycling programs overall. In Michigan, they stay in the the deposit redemption loop.

“If you want to be good at recycling in Michigan, something’s got to happen. And it’s not the bottle bill,” he said.

Schupan said he has continued to pay the idled workers at his Wixom and Wyoming facilities since the cans and bottles stopped flowing in late March.

“We need to get back to some sense of normalcy, and do it in a safe, efficient way,” he said. “We’ll be working three shifts, around the clock, to help catch up. But we can do it.”