Comments on H.R. 7128

Comments were given on proposed legislation dealing with deposits on beverage containers. The bill would require GAO to monitor its effects on competition, resource recovery, and the U.S. economy. GAO would prefer to be given the latitude to review the program effects as part of the congressional oversight process or as part of the GAO ongoing evaluation efforts, and suggested that the monitoring function of the bill be assigned to the Environmental Protection Agency (EPA). EPA would be most suited for this because it has been involved in resource recovery issues for many years. The bill requires that soft drink franchises sell their packaged beverages in containers with refunds in order to maintain their exclusive geographical franchise. The practical effect of this would bring the soft drink industry under a mandatory deposit system for all containers which would lessen beverage container litter and solid waste and contribute to energy and raw material savings. The potential benefit is not as high in the beer industry, because about 35 percent of the soft drink volume sold in containers is already in refillable containers, compared to 10 percent for the beer industry. A Federal Trade Commission ruling that territorial franchises be invalidated to restore competition in the soft drink industry affect the bill's requirement that all soft drink containers be refundable. If the soft drink franchise loses territorial exclusivity, consolidation might occur among the 2,000 soft drink bottling plants. Centralization and consolidation could result in a marked decrease in the share of refillable soft drink containers. If a bill such as this succeeds in effectively bringing the soft drink industry under a beverage container refund law, there could be continued pressure to enact a mandatory refund law for the beer industry.