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The Honolulu Advertiser

Posted on: Wednesday, January 19, 2005

Bottle law a drain on business

By Catherine E. Toth
Advertiser Staff Writer

Like many small-business owners, Tom Jones wants a solution to the high cost of workers' compensation and healthcare insurance premiums.

Tom Jones, owner of Gyotaku Japanese Restaurant and chairman of the Hawai'i Restaurant Association, says the cost of complying with the bottle law exceeds the nickel redemption fee per container.

Deborah Booker • The Honolulu Advertiser

But as a restaurateur, he's got another, more pressing issue that he wants resolved in the 2005 legislative session, which begins today:

Hawai'i's bottle law.

He's not complaining about the backlog at redemption centers or their inconvenient hours.

It's about storing hundreds of cans and bottles — which can't be smashed or pulverized — at his two restaurants, paying the extra nickel for each bottle — which he doesn't want to pass onto his patrons — and worrying about people stealing his stash of now-valuable junk.

"We have to guard our garbage," said Jones, owner of Gyotaku Japanese Restaurant and chairman of the Hawai'i Restaurant Association. "It's hard for us to sort all our bottles and keep it all organized. It takes more labor than a nickel to do that."

The bottle law, which was passed by the Legislature and signed into law in 2002 by then-Gov. Ben Cayetano, is a deposit-return program that has consumers pay an extra 5 cents when they buy a plastic or glass drink bottle or beverage can, then get that nickel back when they return the empty container.

Business owners, such as restaurateurs, who purchase large amounts of bottled or canned drinks have to pay the same deposit fee but often absorb it.

Auntie Pasto's on Beretania Street will pay about $40 more a month for its bottled beers. And most likely the restaurant won't get that refund back.

"We're taking a bite, that's for sure, unless we raise our prices," said manager Lisa Kobs. "My opinion is that it's a half-cooked scheme. It's not convenient for the consumers at all."

At Gyotaku, Jones said he pays an additional $60 a month now for beverages.

"I'm not getting my money back," said Jones, who has had a recycler pick up his bottles for years for free. "But I didn't have to pay (the deposit fee) before. And I don't get that refund ... I'm way into recycling, been doing it for more than 15 years, but this is not working out for me financially."

Murphy's Bar & Grill is poised to increase the prices for its bottled beers to make up for the 5-cent fee, while reducing its bottled offerings and relying mainly on its 13 different draft beers.

"We haven't (increased the cost) yet, but we eventually will," said owner Don Murphy. "We'll cut back on the quantities of our different bottled beers we offer ... But I'm not going to come out and say it's unfair. It's a necessity. I'm all for recycling."

Like many other restaurant and bar owners, Murphy has been recycling his bottles for years. And like the others, the recycling company that picks up his glass bottles and cans will most likely keep the refund. And he doesn't mind.

"For a nickel a bottle, he can take it," said Murphy who, like most owners, don't have time to sort, clean and redeem all his beverage containers. "I'm delighted he'll take them away for me."

At La Lieto Pasto on Kapahulu Avenue, workers can take home the empty beer bottles to redeem them for the refund, said general manager Young Chon. The restaurant hasn't increased its prices yet.

Lawmakers have been hearing the gripes from businesses about the bottle law.

"We get complaints from big supermarkets, from mom-and-pop stores, from restaurants and bars," said Rep. Barbara Marumoto R-19th (Kaimuki, Kahala, Wai'alae Iki), member of the Economic Development and Business Concerns committee. "I wish those problems had been ironed out before it was instituted ... Right now it's been one big headache for a lot of people."

Gov. Linda Lingle opposed the bottle law from the very beginning, calling its structure unlike any other in the nation. She has criticized the fact that government has become the middle man in a relationship that should be strictly between stores and customers.

"Instead, what the Legislature did was create a bureaucracy to oversee this, they put government in charge and created a special fund that now will be available for them to raid to use for general-fund purposes," said Lingle after speaking at the Small Business Hawai'i Conference last week. "It's no surprise that the commercial outlets and retailers don't want to participate in this because all it is to them is an expense."

Though an outspoken opponent of the bottle law, Lingle won't be calling for a repeal or reforms to the law this session.

"I hope the legislators will recognize clearly from consumers that it's simply not working the way they structured it," Lingle said, "and that they would take responsibility, go in and change it."

Restaurant owner Jones just wants lawmakers to recognize the struggles of small businesses, which are contributors to the state's economy.

"Hawai'i is a very pro-labor state and I don't think time and effort are being taken by the legislators to see how things really work," Jones said. "They think it's just self-interest for us ... I'm hopeful that the current Legislature will start to look at the businesses in a little more friendly manner. We're the goose that lays the golden eggs."

Reach Catherine E. Toth at 535-8103 or ctoth@honoluluadvertiser.com.