Aluminum cans piled into a hopper at the Schupan & Sons Inc returnable container processing facility in Wixom, Michigan on September 27, 2021. Lori Chapman | MLive

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

At 10 cents a pop, it’s tied with Oregon for the highest bottle deposit law in the country — and it promotes recycling. In 2019, before the disruption of COVID-19, Michiganders brought back about 89% of returnable containers. Though Michigan’s rate of return has been in a slight decline, it’s still higher than any of the other nine states that have deposit laws.

Supporters of Michigan’s bottle deposit policy point to the high recycling rates as a success, especially compared to consumer recycling rates of other products and would like to see it expanded. But retailers by and large consider the process unsanitary and expensive as is, arguing an expansion would make it even more difficult.

MLive’s latest documentary, ‘Michigan’s Bottle Bill: Sorting Through a Sticky Situation,’ takes a look at all the moving parts to Michigan’s bottle deposit system, what it’s getting right and how some think it needs to be improved.

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

How the deposit law works

Under Michigan’s current law, distributors must charge a 10-cent deposit per returnable container when they sell their products to retailers. Retailers then pass the charge onto customers and refund it when containers are returned. Retailers get refunded when distributors pick up the empties, and any unclaimed deposits remaining are split between retailers and environmental cleanup in a 25-75% split.

In 2019, unclaimed deposits amounted to $43 million. In 2020, that figure ballooned to $108 million after the COVID-19 pandemic caused a months-long disruption in bottle deposit service.

James Clift, Deputy Director of the Michigan Department of Environment, Great Lakes and Energy, said one big unknown is whether the redemption rate for bottles and cans will be far higher in 2021. The department is still weighing how to allocate the roughly $81 million collected for environmental cleanup while keeping in mind the fund could be significantly smaller next year, he said.

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

Beverage distributors are ultimately responsible for getting returnable containers recycled. For large retail stores in the Lower Peninsula, which account for about 60% of the state’s returnables, distributors contract with a company called UBCR to pick up all the empties and take them to Schupan Recycling. Schupan has facilities in Wixom, Grand Rapids and Kalamazoo, and handles the vast majority of Michigan’s returnables.

A front end loader moves crushed glass from returned bottles into a hauler trailer outside the Schupan & Sons Inc returnable container processing facility in Wixom, Michigan on September 27, 2021. Lori Chapman | MLive

One factor that significantly complicates any major changes to Michigan’s current bottle deposit law? Because it was approved by voters via ballot initiative, any changes to the policy would need a 3/4 majority in both chambers of the Legislature to take effect. That means any updates would need bipartisan buy-in.

That hasn’t stopped lawmakers and others involved in the system from suggesting updates.

Many supporters of the law point to high bottle and can return rates as an indicator that the incentive works, and have proposed including other beverage containers in the mix of what consumers can take back.

Sen. Sean McCann, D-Kalamazoo, has been calling for an expansion to the state’s bottle law for years. His current legislation, Senate Bill 167, would 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 for returnables is much higher than with non-deposit items...it just doesn’t work as well.”

Rep. Christine Morse, D-Portage, introduced identical legislation in the House, House Bill 4331.

The legislation hasn’t advanced past the committee level, although environmental groups have supported the idea on grounds that such a change would be a consumer-friendly way to boost recycling numbers and keep the environment cleaner.

Empty cans on a truck being returned to West Side Beer Distributing in Romulus, Michigan. Jeremy Marble | MLive

“When the Bottle Bill was first enacted, people couldn’t imagine the quantity or variety of single-use beverage containers we consume every day,” Sean Hammond, policy director at the Michigan Environmental Council said when the bills were introduced. The legislation would be “a consumer-friendly change that not only keeps our environment clean, but makes returning bottles and cans even more convenient for Michiganders.”

Retailers and distributors fear adding additional containers to the mix could be too much for the current system to handle without more support.

Related: Michigan Democrats propose expanding bottle deposits to all beverages except milk

Some would prefer to see the bottle deposit system repealed altogether.

Michigan retailers have historically been frustrated by the bottle deposit program, arguing the current setup places an unfair burden on grocery stores and prevents the state from having a comprehensive recycling policy.

“In an ideal world, we would love the bottle deposit law to go away,” said Amy Drumm of the Michigan Retailers Association. “We think it’s old, it’s inefficient, but we know that we need a recycling solution.”

Part of the concern is the costs of staffing bottle deposit facilities, although another issue is cleanliness — retailers say what gets brought back to them is often dirty, meaning extra resources are needed to keep retail areas clean.

In late 2018, Rep. Joe Bellino, R-Monroe, proposed a complete repeal of the bottle deposit law during the Legislature’s lame-duck session, arguing the materials should be handled by community recycling programs.

His proposal never advanced past the committee level.

Cracking down on border bottles

One policy change many Republican and Democratic lawmakers alike would like to see is additional penalties for those who might take advantage of the bottle deposit law by crossing the border.

No states neighboring Michigan currently have bottle deposit laws, and out-of-state bottles and cans could enter the system so long as the products were also sold at Michigan retailers.

That was actually the plot of a famous episode of Seinfeld, when Kramer and Newman hatched a plan to profit off of Michigan’s 10-cent deposit, with the deposit in New York only five cents.

“It may not be cost-effective to come from New York, but it certainly is to come from Ohio and Indiana and Wisconsin,” said Spencer Nevins, president of the Michigan Beer and Wine Wholesalers Association.

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

The primary concern from industry officials is the possibility of distributors bringing in applicable beverages from out of state without initiating the 10-cent deposit, which results in losses for Michigan companies and the state’s unclaimed bottle deposit fund.

In June, the Michigan House passed a four-bill package — House Bills 4780-4783 — that would beef up deposit reporting requirements for distributors and increase the penalties for failing to do so. The bills were reported out of the Senate Regulatory Reform Committee in October.

Currently, Michigan retailers only accept bottles and cans from vendors that are sold in their stores. One concept that’s been floated is allowing for universal redemption, or letting consumers bring back their eligible empties to any store, regardless of where they originally bought it.

Nevins said universal redemption “would be amazing for the consumer” and ultimately help get more empty containers recycled.

But it would take significant investment to ensure stores and vendors can handle the influx in containers, he said.

“Could it be done? Absolutely,” he said. “It would have to be done the right way...I think there’s a lot of positive discussions about all of this stuff, and we’re hopeful that pretty soon we’re going to get to a solution that that’s really going to work for consumers.”

McCann and Morse’s proposed legislation includes a provision for universal redemption at larger retailers.

In other states, stores aren’t the sole point of contact for residents who are taking their cans back — there’s also an option to take them to regional redemption centers.

People return containers to the BottleDrop Redemption Center near Delta Park in North Portland on Wed., April 1, 2020. The center has enacted social distancing measures to help prevent transmission of the coronavirus during the pandemic. Dave Killen | The OregonianDave Killen

While Michigan law allows for that, the high upfront costs of setting up standalone redemption centers and maintaining their upkeep means there’s little incentive to set them up.

“In theory, the law allows for these redemption centers and they could be set up by anybody who wanted to, but there really isn’t an incentive right now, because you could set up a redemption center, but retailers still have to accept back those bottles and cans at the store,” Drumm said.

Drumm said if there were a concerted effort to incentivize communities to set up regional redemption centers and look for ways to make the process more efficient, the centers could take some of the pressure of of grocery stores handling large volume returns.

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