Coming Soon: The NYPIRG Tax

No one deserves more credit-or blame-than NYPIRG, the inappropriately named New York Public Interest Research Group, for the expansion of the state's bottle law; the group's website promotes it, and the omnipresent Laura Haight, NYPIRG's lobbyist was the prime mover for the legislation. So, once the bill does to into effect-it adds water, a "NY Only" label, an additional penny and one half for handling, and a clause that lets the state take almost all of the unredeemed deposits-and the cost of water rises by over 50%, along with a minimum $2/case rise in the cost of beer and soda, the resulting increase must be labeled, the "NYPIRG tax."

For it was NYPIRG that, while it promoted the expansion, was able to drown out the chorus of voices telling the governor and the legislature that the newly expanded measure would sock it directly to the state's beverage consumers. But it won't be beverage consumers alone who will bear the brunt of this ill conceived policy. The unintended consequences of the law will be that scores of small beverage manufacturers and distributors will be faced with the kind of additional costs that will put many-if not the majority-on the verge of extinction.

Which is precisely what happened in 1982 when the bottle law was first passed. At the time , there were many smaller niche soda brands that were being sold at reduced cost to price conscious consumers. C&C, Shasta, and White Rock were all over the place-along with smaller beer brands such as Schmidt's and Pabst. To find these brands now you need to be an urban explorer.

As city stores were forced to find the space for mandatory redemption, they began to eliminate smaller brands-since the larger soda companies could provide them with a full range of flavors, thus obviating the need for additional space constraining bags and boxes for those smaller brands' empties. The same process will soon repeat itself since the regulatory costs of expansion will hurt the smaller brands disproportionately.

Asking a small woman and minority owned company like Top Pop to have a separate New York label and UPC code-and to do so by the totally impractical June 1st inception date-will add so much expense that it will be unable to continue to provide affordable drinks to low income consumers; a death sentence for the company. Similarly, Good-O Beverage, the largest Hispanic operated soda company in the area, uses the unredeemed deposits to be able to distribute full goods and collect empty containers in a cost effective manner. As with many of these smaller soda companies, the unredeemed deposits are a lifeline to marginal profitability.

As a result, if the law is not appropriately amended to address these issues, there will be an exodus of small and minority owned soda companies from the area-in effect enhancing the market share of all of the big players. As for all of these big players, there's unanimity: the costs will be great and they will be bone by consumers.

And since the majority of beer and soda consumers tend to be lower income folks, what we will see is a massive regressive tax; and we're not even taking into consideration the increase in the state's beer tax that was included in the recently negotiated budget. As last week's Times Union article pointed out: "The idea behind the separate UPC code, say those familiar with the legislation, was to prevent people from collecting deposit refunds in New York for bottles they bought in neighboring states, such as Pennsylvania or New Jersey, that did not charge a deposit. Brewers also will need to establish separate labeling and distribution for beer to be sold in New York. "We're going to have to change our labeling, and that's going to be a costly factor in the equation," said David Katleski, president of the New York State Brewers Association, who operates Empire Brewing Co. in Syracuse."

And the costs will escalate all across the board; and we're predicting that the $4 case of water will soon become a relic-an artifact of a bygone era; with $7 or $8 case prices becoming the norm. So when small brewers, soda bottlers and distributors close-and when the price of your favorite beverage goes through the roof-you can give a big shout out to Laura Haight of NYPIRG, the queen of the anti-business zealots, and the champion of regressive taxes for all poor New Yorkers.