(Source: MIRS.news, Published 07/17/23) Michigan's beer distributors collect around 38% of beverage containers for the state's bottle deposit law, earning them $8 million in the Fiscal Year 2024 budget, but according to the Michigan Soft Drink Association's Derek Bajema, soft drink distributors handle the other 62% - and received nothing.
The finalized budget included $8 million for grants to licensed beer distributors for beverage container deposit costs, which Bajema said used to be common practice to help distributors with the cost of running the bottle deposit law.
He said distributors pay UBCR, the exclusive pick-up agent for the Michigan Soft Drink Association and the Michigan Beer and Wine Wholesalers Association, a per-container fee to collect recycled cans from high-volume stores.
At the same time, the Association’s members deliver to retailers - like Speedway or 7/11 - and take empty cans back out of the store and put them back on the truck.
"That costs a lot of money, employee time, investment and infrastructure, when you take it back to the production facility," Bajema said.
The specific line item addressing the costs for distributors, located in the Department of Treasury budget, allocated $8 million from the General Fund for "beverage container distributor grants."
"Grants must equal 1/2 of 1 cent per returnable container for beer, ale or other malt drinks, or mixed wine or spirit drink," according to the budget language.
Bajema said the Association was in discussions with legislators ahead of budget negotiations, and "they understood that, 'okay, if you do relief for anybody, you've got to make sure it's equitable.'"
But with no mention of soft drinks, Bajema said the Association is hopeful that soft drink distributors will be considered moving forward.
"If we’re going to do $8 million for the people doing a little less than 40%, we need to do something for the people doing 60% of the work," he said.
Bajema said that for years, the state averaged around $15 million annually from recycled cans that weren't returned by Michiganders.
But during and post-pandemic, the number of Michiganders returning bottles has been in decline, and the state's take is now closer to $75 million, he said.
"The state has garnered all this unforeseen revenue," Bajema said, "so there's a flexibility when looking at the whole picture to say, 'we can give some to the distributors who are really running the program.'"
Maybe some of that "could be given to our guys," he said.
Bajema said the Association produces soft drinks at four locations in Michigan and distributes from 39 additional facilities with 6,000 employees. The locations are represented by 34 Representatives and 22 Senators, he said.
When asked why he believes soft drink distributors weren't included, Bajema said he's unsure.
"The main reaction I've received in the conversations since (with legislators) has been just shaking their heads," he said, "and I get the sense they want to make it right."
Bajema said the Association is happy for beer distributors, and happy there was recognition of the cost of running the statewide bottle deposit program.
"We just want to make sure that same recognition applies to us," he said.
