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Recycling regs could force a beer price hike

Will British Columbia beer and cider drinkers be forced to dig deeper in their pockets to buy their beloved libations later this spring?

On May 19, amendments to the province's recycling regulations, which force producers of packaging and printed paper to collect and recycle their own materials, will kick in.

Producers may appoint an agency to do the job for them, but only two submitted plans for that by the November 2012 deadline: Multi Material B.C. and Brewers Distributor Ltd. The retail and grocery-industry led MMBC is the only one approved so far.

The goals of the 2011 amendments are to increase recycling and reduce packaging, but the Canadian Federation of Independent Business fears that higher costs for businesses will mean job losses and higher costs for consumers. The government, which is also in the liquor distribution and retail business, will not require disclosure of fees to consumers, which opens the door to hidden price hikes to cover the fees.

The amendments only apply to goods purchased by a consumer, and not to materials used to transport goods between businesses, according to a July 2013 Liquor Distribution Branch briefing note.

Brewers Distributor Ltd., a major supplier to LDB, is a Western Canadian joint venture of beer giants Molson and Labatt that also distributes products from smaller B.C. brands like Phillips, Russell, Bowen Island, Fernie, Nelson, Vancouver Island and Dead Frog.

A Dec. 9, 2013 internal LDB memo said BDL submitted a number of drafts of its plan to the Ministry of Environment, but none was approved.

"BDL wished to include the LDB in the draft submission," said the memo. "The LDB is not interested in being included for good reason and has provided a response to BDL."

Whatever the "good reason" may be, it was censored from the LDB documents to allegedly protect the government's financial interests and keep secret policy advice and recommendations.

The LDB briefing note, prepared for general manager Blain Lawson, said the majority of the packaging and printed paper associated with products sold in BC Liquor Stores comes with beer, cider, and refreshment products, such as paperboard or shrink-wrap covering multi-pack products and plastic rings holding cans together.

An attached spreadsheet shows the total estimated cost of MMBC fees to LDB for a year would be $226,778.99 for 669,543 kilograms of containers, printed materials and accessories. That includes more than 12.8 million paper bags and 17.65 million plastic bags, plus 534,000 copies of Taste magazine.

The fees levied for the plastic bags are the biggest estimated line item, at $113,496.98 for 210,179.6 kg.

It doesn't appear that MMBC fees will harm the bottom line for LDB, which reported a $929.3-million profit in 2012-2013, but forecast a drop to $858.3 million in 2013-2014 because of the transition from the Harmonized Sales Tax back to the Provincial Sales Tax and Goods and Services Tax. The BC Liberals, however, are demanding the public enterprises they control to send as much to Victoria as they can to help fulfill Premier Christy Clark's balanced budget promise.

Asked if the cost of MMBC fees will be absorbed by LDB or passed on to the consumer, the Justice Ministry sent a prepared statement that said: "LDB is in discussions with MMBC to determine any potential impact these changes may have to its business.

"The LDB applies a formula for markup of liquor based on product category -- i.e. beer, wine, spirits. Since suppliers know the LDB's pricing formula, they effectively determine the consumer price based on the price they charge the LDB."

BDL general manager Mike Allen referred an interview request to Canada's National Brewers, the lobby group representing Labatt, Molson Coors and Sleeman Breweries. It was also non-committal about a recycling-related price creep for beer and cider.

"The hope is to continue on, business as usual," Brian Zeiler-Kligman, director of sustainability for Canada's National Brewers said in an interview. "We're not entirely clear as to cost at this point. We're still working with the government to make sure our plan appropriately meets with their interests and that we can properly be collecting our packaging from consumers the most cost-effective way possible."

The June 28, 2013 BDL annual report to the Environment Ministry said 592.3 million cans and bottles were sold and 549.8 million containers returned in the 2012 calendar year. It was the fifth consecutive year with a 92 per cent or better return rate and substantially higher than the government's 75 per cent target. BDL claimed it diverted 34,442 tonnes of aluminum and glass from landfills.

BDL's 2014-2018 plan said it intended for 1,277 bottle and can return locations -- government and private stores and bottle/can return depots -- to also serve as collection spots for cardboard/boxboard cases, can flats, metal crowns, plastic cone rings and plastic shrink wrap when approved by government.

Vancouver journalist Bob Mackin is a frequent contributor to The Tyee.

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