Recyclers Gamble on Prizes to Spur Trade
The struggling recycling industry in California will soon feature the same approach that has worked for the state lottery--cash prizes.
Beginning Monday, one of the largest recyclers of aluminum cans will be dispensing tokens from its can machines worth cash prizes of $2 to $100 at supermarket recycling centers throughout the state. The promotion by Virginia-based Environmental Products Corp. will create $200,000 in instant jackpots for patrons of the firm’s 470 automated recycling centers, company officials announced Friday.
Not only that, but the firm is planning to climax the promotion with its own version of the “Big Spin” on Aug. 15, when a card drawn at random will mean $50,000 for one lucky consumer.
“For the next four months, you are going to get a real bonus in terms of the money you can acquire by turning in your bottles and cans,” Los Angeles Mayor Tom Bradley said, joining company officials, environmentalists and state representatives at a press conference to unveil the program.
But the promotion, at the six-month mark in California’s mandatory beverage-container recycling program, may be evidence of problems within the complex state recycling network, according to some worried industry officials and lawmakers.
Assemblyman Burt Margolin (D-Los Angeles), who wrote the 1986 recycling bill, is concerned that consumers are finding too little incentive in the penny-per-container they are paid for returning cans, bottles and plastic containers.
Margolin’s aide for recycling, Kelly Smith, predicted Friday that the entire structure of the newly created redemption system could collapse unless problems are corrected. Those problems include the low redemption value, a failure by stores and beverage makers to promote recycling, and other economic difficulties affecting recyclers and container manufacturers, Smith said.
Under the law, supermarkets must cooperate to maintain recycling centers in about 2,500 different geographic zones in California. Those centers are run by independent recyclers who provide their own manpower and equipment to take in beverage containers and pay consumers for them. The recycler makes his money by selling the containers for scrap value.
So far, however, many recyclers have been struggling.
“Everyone is definitely losing money now,” said Ron Schweitzer, general manager of Stanton-based Mobile Recycling Centers. “We’re just hoping some things change to allow us to recoup our investment. But we’re not seeing light at the end of the tunnel.”
According to Schweitzer, the “paper-thin economics” by which recyclers operate on a penny per can is made worse by city ordinances or supermarket landlord dictums that place the centers at the side or rear of many stores. Since the law requires supermarkets to provide the centers, many recyclers mistakenly assumed that the stores would help subsidize the losses during the difficult start-up period, he said.
Instead, Schweitzer said, recyclers have discovered what he called a loophole in the law that allows grocers to “put three trash cans out front” and call it a recycling center, she said.
In recent weeks, Margolin conducted a survey of more than 50 new recycling centers in the Los Angeles area and found that at least 15 of them failed to meet minimum state requirements, Kelly said. Some failed to redeem all three types of containers and others failed to display state-mandated signs. Others failed to remain open the required 30 hours a week, he said.
Yet the state is only beginning to assess the $100-a-day fines against supermarket owners, he said. Margolin believes that the law needs to be toughened and, this week, he pushed a bill through the Assembly Natural Resources Committee that would increase the fine for repeat offenders to $200 a day, Kelly said.
Meanwhile, recyclers are also struggling in the Legislature, waging a political fight against beverage manufacturers over the amount of money they receive for scrap glass and plastic, according to recycler Schweitzer.
Schweitzer said recyclers receive less from scrap glass and plastic than it costs to collect it. Although the relatively high scrap value of aluminum makes up some of the difference, recyclers overall are lucky if they break even, he said.
Bruce H. DeWoolfson, president of Environmental Products Corp., said his firm uses shredding methods that make it more economical to handle glass and plastic. He disagreed with Schweitzer’s forecast, saying, “We feel plastic can be recycled profitably under the California program (even) under under present scrap prices. We also feel glass can be recycled profitably at the present values.
“My concern is that the one-cent incentive may not be enough in the long term.”
His prize jackpots, distributed in amounts of $2, $5, $10, $50 and $100, may help to change that, he said. But he acknowledged that the promotion will do little to address the chief concern of state officials--to increase the relatively low recycling rates of glass and plastic. The prizes will be paid only from aluminum can machines, and the promotion will end before the company completes its installation of machines for glass and plastic.
