NY’s Nickel Water Bottle Deposit Raises Ire of Distributors, Retailers

April 9, 2009

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Buried within the new rule to require a five-cent deposit on every bottle of water sold in New York is the fact that water bottles sold in the state must contain a New York-specific UPC symbol.

This is expected to add cost and complexity to the distribution process. For instance, a distributor can’t simply restock New York shelves with product from a New Jersey warehouse unless it bears the unique code.

According to the Albany Times Union, here are some other provisions of the new law, portions of which take effect June 1.

Retailers may keep 3.5 cents of the handling fee, instead of 2 cents.
Retailers with stores over 40,000 square feet are required to install a so-called “reverse vending machine” that allows consumers to trade in their used bottles.
Distributors and bottlers must pay 80 percent of unclaimed deposits to the state.

An executive at Rotterdam-based Price Chopper is not happy with the new law, saying that in order to comply, the retailer will have to use separate handling, storage and distribution processes for the bottled water.

“If you just think about it from the perspective of our own brand alone, for the volume of Price Chopper 24-pack water that we do, to be working out of two slots and keeping the distribution of bottled water separate — and to ask our suppliers to do separate labels and separate runs of bottled water — it’s really ludicrous,” Mona Golub, vice president of marketing at Price Chopper, told the Times Union.

The reason for the separate UPC code is to prevent the public from using bottles purchased in other states for collecting deposit refunds in New York.

In California, a similar deposit process on aluminum cans is causing issues with fraud.

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