Friday, April 11, 2008

Green Retailing Memo: California State Assembly Committee to Vote on Plastic Bag-Fee Measure Monday; Many Grocer's Support Bag-Fee Legislation

On Monday (April 14) the Natural Resource Committee of the California State Legislature is set to vote on a measure that would impose a mandatory fee of 25-cents per-bag on the use of free, single-use plastic carrier bags at all grocery stores and pharmacies in the state, regardless of the stores' size.

According to the legislation, which if passed will then go to the full California State Assembly for a binding vote, the money raised by the 25-cent per single-use plastic carrier bag fee would be divided-up using a per capita formula between the state's local governments to be used for litter prevention and reduction efforts and programs.

If the bill makes it out of committee to the full California State Assembly and then passes that body with a majority vote, it would be the first statewide mandatory per-bag fee law in the United States.

There has been very little media attention in the Golden State regarding the proposed statewide 25-cent single-use plastic carrier bag legislation. This is largely because the vote on Monday is only a committee vote. While in committee, legislation can still be amended and changed, although since the bill is coming to a vote on Monday that's generally a signal the committee majority party chair (Democrat) and the ranking member (Republican) have agreed most of the amendments to the bill if any have been made and it's time for a full committee vote.

Our California state government sources tell us the chances for the 25-cent per-bag fee legislation to pass in the Natural Resource Committee on Monday are pretty good.

One interesting aspect of the proposed legislation is that to date there has been very little if any opposition from either the state's supermarket and pharmacy retailing trade associations, such as the California Grocers' Association, or individual grocery retailing chains or independents in the state.

In part this is because as we mentioned earlier, the legislation is still in committee rather than being up for a binding vote in the full state assembly.

However, that's only a small part of the reason for the lack of any significant opposition to the proposed law.

The more interesting aspect of the story is that numerous supermarket chains and independent grocers in the state agree with the 25-cent per plastic bag fee legislation, or are at least not inclined to oppose it. Part of the reason these grocery retailers might agree with the proposed statewide law is they see either outright bans or per-bag fee laws coming on a city-by-city piecemeal basis anyway.

As mentioned above, San Francisco passed a single-use plastic carrier bag law last year, which has now been in affect for about eight months. The law is limited in that only grocery stores and retail pharmacy's which operate stores over 10,000 square feet are banned from offering shoppers the free plastic bags to pack their purchases in. Department stores and mass merchandisers regardless of size are exempt from the law, as are the city's hundreds of small mom and pop grocery stores, convenience stores and green grocers, among others.

Across the Bay, the city of Oakland has passed a similar law. However it's currently in the courts because an association representing plastic grocery bag manufacturers has challenged the ordinance.

Other California city's, ranging from nearby Bay Area cities Berkeley and Palo Alto, to tiny Willits in the north coast, Davis in the Sacramento region, and Santa Monica and others in Southern California, are proposing outright bans on the single-use plastic carrier bags.

Huge Los Angeles County also is getting ready to propose legislation that would either ban the bags completely or impose a per-bag fee.

The state of California also passed a law last year which requires all supermarket chains and independents with stores over a certain square footage to place plastic grocery bag recycling bins in their stores and to sell reusable shopping totes in each store.

It's this climate which we believe is the reason there hasn't been any significant industry opposition to the proposed per-bag fee legislation thus far. In fact, numerous California grocers seem to be just fine with--and in some cases even supportive of--the proposed bag-fee law which will be voted on in committee on Monday.

Bay Area grocers voice support for per-bag fees at meeting

For example, at a meeting of grocery industry leaders and grocers held yesterday morning by the Palo Alto Chamber of Commerce in the San Francisco Bay Area city of Palo Alto, a number of grocers attending the gathering voiced their support of a single-use plastic carrier bag fee rather than seeing outright bans happen on a city-by-city piecemeal basis, which is occurring.

The city of Palo Alto is planning to implement a law on April 28 which will ban plastic grocery bags from being used in the city's 13 largest supermarkets and pharmacy's.

The grocers at yesterday's meeting said they oppose the Palo Alto plastic bag-ban. But not perhaps for the reasons you might think.

Although the grocers oppose the city ordinance, they said it isn't because they have a fondness for the single-use plastic bags. Rather, they argued since laws like the San Francisco bag ban have been implemented (some of the grocers at the meeting have stores in San Francisco as well as in Palo Alto) what they've seen is a surge in shoppers requesting paper bags, even though all of the stores are selling reusable shopping bags for as little as 99 cents each, and have even held free reusable bag giveaway events to encourage shoppers to bring their own bags to the stores.

Dave Bennett, President of local upscale supermarket chain Mollie Stone's, which has a store in San Francisco, along with a number of stores in the region, told the group since the plastic bag ban was enacted in San Francisco "our paper bag usage (in that store) has shot through the roof."

Dan Conway, the corporate director of state and local governmental affairs for supermarket chain Safeway Stores, Inc. which is headquartered in the Bay Area, said paper bags cost grocers about 10 times as much as the single-use plastic carrier bags. He didn't say if Safeway is opposing or supporting the plastic bag fee legislation set for a committee vote on Monday.

The consensus among the grocers at the Palo Alto Chamber of Commerce meeting yesterday was that they would go along with some sort of per-bag fee, including putting a surcharge on paper grocery bags as well as plastic carrier bags.

They further said they are in support of an aggressive campaign, which they would help support financially and materially, that would launch an educational program in the city, which is home to Stanford University and many high-tech companies, designed to encourage shoppers to use reusable bags, including holding frequent free reusable bag giveaway days in their stores.

The grocers, along with Tim James who is with the California Grocers Association trade organization and was at the meeting, also said they want all retailers to be included in any law which puts a fee on plastic and paper bags, not just supermarkets and pharmacies.

"Allowing consumers to use plastic bags at some stores, but not at others (types) sends a mixed message," James told the group at the meeting.

Another grocer, John Garcia of the local multi-store independent JJ&F Fine Foods, agreed with James. He said, "My personal feeling is you just make this big bang (a law imposing a fee on both plastic and paper carrier bags) and then there is no confusion. Everybody does the same thing, and it's done."

Safeway's Conway told the group instead of banning the plastic bags, the city council should create a per-bag fee scheme, perhaps indicating that Safeway will support the statewide plastic bag-fee scheme set to be voted on in the Natural Resource Committee on Monday?

"Adding a fee would literally solve the problem with single-use bags," Conway said. "You (the city of Palo Alto)would see the swiftest and most dramatic decline in single-use bags in the entire country, hands down," he added.

Other representatives of Bay Area supermarket chains and independents joined in the chorus saying they too would likely support a single-use plastic carrier bag fee like the one set to be voted on by the Natural Resource State Assembly committee on Monday.

A spokesman for upscale Bay Area-based grocery chain Andronico's Market, which has one store in Palo Alto and others located throughout the Bay Area, said he supported charging a fee for the now free plastic grocery bags.

"You (the city of Palo Alto) need to take it (plastic bag ordinance) to the next step," he said. "If we've been giving these (plastic grocery bags) away since the 1970's and not getting reuse out of them, it seems like the fee would be the most effective; you might even get national attention," he told the Palo Alto city officials who were present at the meeting.

Local independent grocer Steve Piazza, who owns the 3-store upscale Piazza's Fine Foods chain in the area, said he too would go along with a law that imposes a per-bag surcharge on the now free plastic bags, as well as on paper grocery sacks.

The city officials at the meeting, along with the grocers present as well as the local business leaders who are members of the city's Chamber of Commerce, said at the meeting they felt it was an historical morning. The grocers' commented it was the first time they could recall being able to sit down with city officials as a group and be able to give input and perhaps shape or change a policy that effects them directly.

Palo Alto is set to enact its single-use plastic carrier bag ban on April 28. The law will only ban supermarkets and pharmacies over a certain square footage from offering the free, single-use plastic carrier bags in their stores. That's why only 13 local supermarkets are affected by the ban. All other types of retailers, along with smaller grocery and convenience stores will still be able to use the single-use plastic carrier bags.

After the meeting, Phil Bobel, the city's environmental compliance manager who is responsible for making the ban happen on April 28, said he was willing to work with the grocers on the issue, and would consider recommending to his bosses in the city that the upcoming ban perhaps be postponed until September, so the city and grocers could work together on the issue.

Further, he said if the grocers' seriously supported and worked on gaining support in the next few months for a per-bag fee instead of the ban, he might consider suggesting his bosses take that matter to the city council for review before September.

After the meeting however, a number of city officials and others in the audience told us they believe the city will go forward with the single-use plastic carrier bag ban on April 24 because such a large majority of Palo Alto voters are in favor of it.

A number of these actors and observers told us it would be a good idea to impose an across the board per-bag fee for every type of retail store in the city; but not instead of the upcoming April 28 ban, but rather in addition to it.

The argument from many in the city is that these 13 largest supermarkets and pharmacies (especially the supermarkets) account for a much higher percentage of plastic carrier bag use because of the nature and volume of the businesses. As a result, they believe by starting with the largest supermarkets and pharmacies, then moving on perhaps later to other retail classes of trade, they will see an immediate decrease in litter for example, from the bigger-store plastic bag ban.

SoCal grocers not as vocal on the issue...yet

We haven't heard similar support for local or a statewide plastic carrier bag fee law from grocers in Southern California, although since numerous cities in that region have bag-ban laws set to be voted on by city councils soon, they may feel the same way as their Northern California cousins do.

Additionally, Safeway is a major supermarket industry player in Southern California (as in northern) where it operates the Vons' chain. Therefore, if California's leading grocery chain were to support the statewide bag-fee legislation in committee that would go along way to not only gaining similar support from other grocery chains but from the California Grocers Association as well.

Further, as mentioned early in this piece, Los Angeles County is working on passing a law that would impose a charge on all single-use carrier bags used by supermarkets in that highly populated Southern California county.
This means grocery chains like Vons, Ralphs and many others which have stores in Los Angeles County and in numerous other counties in the region, will be able to offer plastic bags in their stores outside Los Angeles County but not in those stores in the country. Piecemeal laws like this can cause havoc for retailers.

In addition, if many of the cities pass their own pending plastic grocery bag bans, that means the region's grocers will end up with a further piecemeal system--some stores in some counties and cities offering plastic bags, while those in the cities with the bans won't be able to.

Most of Southern California's supermarket chain and independent retail companies are likely to come to the same conclusion the grocers at yesterday morning's Palo Alto Chamber of Commerce meeting have we think: that a uniform, statewide single-use plastic carrier bag fee (of say 25 cents a bag) might be far better than either county-by-county or city-by-city outright bans or piecemeal bag fees.

Whole Foods Market to stop using plastic grocery bags on Earth Day

One major event that's going to put single-use plastic carrier bags in general, and the legislation to be voted on in committee on Monday specifically, in the spotlight in California is that on April 22, Earth Day, Austin, Texas-based Whole Foods Market, Inc. will voluntarily stop using single-use plastic carrier bags in all of its stores in the U.S., Canada and the United Kingdom.

Whole Foods' has numerous stores, and is building many more, in California. The supernatural grocer also garners lots of publicity in general in the California media, and will garner even more in the days leading up to the Earth Day self-imposed plastic bag ban.

All of Whole Foods' California stores (and most of those throughout the U.S.) are planning major events on Earth Day, including celebrating the retailer's voluntary plastic bag ban. Whole Foods stores will be giving away free reusable shopping tote bags, selling others at discount and holding major in-store promotions celebrating the earth, environmentalism and sustainability.

No other grocery chains in California have yet to announce that they, like Whole Foods, plan to stop using the single-use plastic carrier bags in their stores.

We expect Earth Day (April 22) and the days leading up to the event and after, to be a watershed moment in terms of the single-use plastic carrier bag issue internationally, nationally in the U.S., and particularly in California if the Natural Resource Committee passes the plastic bag-fee legislation on Monday and sends it to the full California Assembly for a binding vote. Even if passed by the full State Assembly, such a bill would still have to be signed by the governor in order to become law.

Further, if the bill is killed in committee on Monday, that will increase and intensify the local county and city bag-ban legislation efforts in California, which is the focus at the local level rather then per-bag fee legislation.

This story is just beginning. We will be following closely, starting with bringing you the results of the Natural Resources Committee vote on Monday.

The issue is a global one. Single-use plastic carrier bag bans are happening all over the world. Earlier this year the world's largest country, China, banned every retail store in the nation from using the bags. Other Asian countries and numerous African nations are doing the same.

Additionally, the United Kingdom's Parliament is currently debating the enactment of either an outright bag ban or a per-bag charge in that nation. Prime Minister Gordon Brown has already said he is in favor of passing either an outright ban or a per-bag fee scheme before the end of this year.

Ireland has already passed a nationwide law which puts a charge on every single-use plastic bag used by every retailer in that country. The law has been in effect for about two years. The country's government says plastic bag use has been reduced by nearly 90% since the law was passed.

The European Union is discussing a nationwide ban or bag-fee scheme as well. In addition, there is legislation pending in Australia on either a ban of per-bag fee, as there is elsewhere in the world. It's a global issue--and it's heating up.

If the California 25-cent per bag fee legislation does pass, it will have global influence. Not only is California the largest state in the U.S., but it has the world's fifth-largest gross domestic product, which makes its economy even bigger than those of a number of European nations.

The state also is a trend setter in the grocery industry. If the Golden State's grocers and grocery trade associations do support the bag fee legislation, that could open the door for grocers all over the U.S.--and elsewhere like the UK--to do the same. Stay tuned. We will be.

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