It’s become common knowledge: The biggest emitter of greenhouse gasses in the wine world is the packaging. In distilling, packaging is the second-largest emitter. To curb the energy needed to make and ship glass, producers are trying lighter bottles, cans, Tetrapaks, bag-in-boxes, and unique solutions like plant-based containers. But for all its ingenuity, the drinks industry has hit a roadblock: the infrastructure on the back end. Packaging often ends up in landfills, especially in the U.S., where recycling rates pale in comparison to Europe.
To truly curb emissions and pollution, we need a circular economy, in which packaging avoids the waste stream through reuse. That takes change on a scale that requires industry, consumer, and, first of all, government action.
In California, the fifth-largest economy in the world, one hurdle was cleared on January 1, 2024, when Senate Bill 1013 was enacted into law, bringing wine and spirits packaging into the Container Redemption Value (CRV) program used by beer, soda, juice, and water. With the extension of the so-called Bottle Bill, wine and spirits consumers must pay a deposit that is refundable when they return their empty container, which is recycled into new packaging, keeping it out of landfills.
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Now the real work begins, as wineries, distilleries, and distributors figure out how to come into compliance with the new rules, and government agencies scramble to reinvigorate a neglected redemption system. It’s a massive undertaking involving many parties, and, as confusion swirls over the intent, implementation, and outcome of the legislation, wine and spirits professionals have equal parts questions and hope. SevenFifty Daily went seeking clarity.
Why Has the Bottle Bill Been Extended Now?
Some beverage professionals have asked why wine and spirits weren’t part of the CRV program to begin with. “We should have never been exempted in 1986,” says John Skupny, the co-owner of Lang & Reed in Napa Valley. He blames “gerrymandering” by larger industry players.
Those entities, including the advocacy organization the Wine Institute, have now reversed their position. “[The] Wine Institute wanted to ensure that any new broad redemption program was the most feasible for wine producers and consumers. Everything presented to us until SB 1013 was challenging operationally and not cost-effective,” says Tim Schmelzer, the Wine Institute’s vice president of California state relations. “With changing markets and approaches to glass recycling, we recognize the need for our containers to be adequately separated from other materials as a path to achieving more efficient recycling and higher recycling rates. Our research led us to conclude that California’s Bottle Bill program provides the most cost-effective and viable path for wine producers and consumers to positively impact California’s circular economy.”
Some also assume the anti–Bottle Bill lobbying of the past was part of a broader resistance to further regulation of beverage alcohol. “There’s a lot of pressure on this industry. That’s probably where the Wine Institute was coming from: Less is more,” says Aly Wente, the vice president of marketing and customer experience at the Livermore Valley’s Wente Vineyards. “But there’s been a major push in the last five years on climate change and bettering sustainability.”
As for distilleries, Mike Brown, the co-owner of Ventura County’s Cantara Cellars, Cantara Distillery, and Flat Fish Brewing Company, who sits on the legislative committees of two trade organizations, Family Winemakers of California and the California Distillers Association, says, “Spirits are weak in California. The wine industry is powerful. Wineries had been resisting CRV actions, and the spirits got dragged along.”
According to Jeannie Bremer, the vice president of compliance and public policy for The Wine Group, the industry was forced into action. “California had passed legislation two years ago mandating an Extended Producer Responsibility program that would have required that producers create a program to deal with their empty containers post-consumer,” she explains. “We are members of the Wine Institute, and it polled its members, who were very much in support of joining the Bottle Bill. The Wine Institute talked about this issue, and the members felt that the Bottle Bill, which is an existing program, seemed to be a natural fit.”
How Will the Expanded Bottle Bill Work?
As per new rules administered by California’s Department of Resources Recycling and Recovery (CalRecycle), distributors pay a redemption value into the state CRV fund based on products they sell in California: five cents for containers under 24 ounces; 10 cents for containers 24 ounces or larger; and 25 cents for a box, bladder, pouch, or similar container. For the purposes of the CRV, a “distributor” is any entity, in state or out, that sells directly in California. This includes wholesalers and also wineries and distilleries that sell direct to consumer (DTC), or to bars, restaurants, or stores without going through a wholesaler.
At the point of sale, the distributor charges the buyer the container’s redemption value, then sends the money (minus a 1.5 percent administrative discount) to the state. The state returns the money to the end user that redeems the empty container. Unredeemed deposits can only be spent on furthering California’s recycling efforts.
Beverage manufacturers also pay a processing fee based on the container’s material. Fees are nominal, ranging from $0.0011 for PET to $0.14368 for #7 plastic, but they’re used to pay redemption centers “to help fill the gap between the cost of recycling and the value of scrap material,” says Lance Klug, of CalRecycle’s Office of Public Affairs. Producers also must include a CA CRV message on containers.
How Is the Bottle Bill’s Extension Going So Far?
Starting January 1, 2024, the first step for wineries, distilleries, and distributors has been getting registered for the program. By mid-March, the agency had processed 2,550 new registrations, with 2,000 more to come, according to Klug. There is a backlog, but Klug insists that “with new staff being added to implement these changes, the program has the resources to provide technical assistance to all beverage manufacturers and distributors joining the program.” Participants will pay retroactively back to January 1 once they are in the system.
Of course, that assumes potential participants know about the new law. Producers claim that CalRecycle never informed them directly. Abe Stevens, the owner of Humboldt Distillery in Fortuna, learned about it from an attorney’s e-newsletter. “Knowing I got caught off guard makes me suspect all these mom-and-pop distilleries and wineries had even less notice,” he says. “Maybe some still don’t realize there are new requirements.”
“I found out from reading the wine press,” says Alex Katz, the founder of Protector Cellars in Santa Barbara County. “I signed up and got an email that said, ‘You’re in the queue. We’ll get back to you once you’re processed.’ That was four months ago.” Because he sells wholesale and DTC, Katz needed to register twice, as a manufacturer and a distributor. “It remains to be seen how all this plays out. My understanding is they will somehow merge those.”
CalRecycle offered seminars and a downloadable manual, but Brown says they should have sent out punch lists. “A lot of people are going, ‘What the heck do I do?’” he says.
Small producers are hardest hit, whose bookkeeping systems have grown organically with their brands. “It’s not the cost of taking 10 cents per bottle that’s difficult but the expense of getting these reports in order,” says Adrian Manspeaker, the owner and winemaker at Joseph Jewell Wines in Sonoma. “We ship wholesale, to retailers, and DTC, so to have someone pull all those reports is time-consuming. You need good software to track it, and every component of your software needs to speak together, or you have to hire someone who knows what they’re doing.” A further complication is that bottles poured in tasting rooms are exempt. “How do you capture that onsite?” Manspeaker wondered.
He turned to St. Helena-based bookkeeper and compliance specialist Mary Burklow. For her 139 winery clients, “the process is crazy,” she says. “Most can’t stand governmental nonsense, so I have to fight both my clients and the government on compliance.”
Processing Bottle Bill Payments and Refunds
Burklow registered her clients, but when it came time to set up their online accounts, “the government fuddy-duddies wouldn’t allow me to be a user because I’m not a winery employee,” she says. “We went back and forth a thousand times.”
A sympathetic agent finally created an account through which Burklow can process clients’ payments. Rather than adding up each transaction, which would take more billable hours than clients can afford, she averages their sales, then overpays the state. New CRV participants are supposed to pay monthly for the first year, but some clients want to just file when they’re bottling. The agent told Burklow that’s okay, as long as the agency gets paid properly by year’s end.
Burklow also found the payment process onerous. “They don’t have it set up to pay online through an ACH. You can send a wire, pay with a credit card for a fee, or mail in a check. They did say they are trying to upgrade their system,” laughs Burklow. And though they have to pay the CRV, most clients aren’t collecting the fee from buyers. “They say it’s not worth nickle-and-diming their customers.”
Steven Harrison, the CEO of the compliance service Vinoshipper and the direct-to-consumer sales platform CompleteDTC, says it’s “a huge burden” on small producers for what they return. “We ran numbers to determine how much the average small craft producer would be paying, and it was $5 a month.” Vinoshipper made a deal with CalRecycle. “We collect the money when the sales go through our platform and remit it directly to CalRecycle in one account, so our clients do not have to file anything. That was a big lift.”
For producers with ample resources, however, the process is going smoothly. Wente’s IT team worked with the winery’s DTC platform, Commerce7, to implement a tool “where you just check a box, and it makes sure that it’s charging the right amount,” she says. “Then we route it to a specific account that makes it easy to sequester those dollars and pass them along.”
Logistical Issues of Labeling
By July 1, 2025, all wine and spirits packaging must display a CA CRV message. For Stevens, the problem was finding room. “I’ve used this label for 10 years, fiddling with fonts, making space, and following regulations. It didn’t have extra real estate.”
CalRecycle’s labeling rules rolled out around the same time that the European Union announced that wine sold in Europe must list nutritional and ingredients information. “If you’ve got nutritional values and ingredients coming on, and if every other state did a redemption value in the same size as California’s, you’d have to have a 5.5-inch-long by 3-inch-wide label,” says Harrison. That would be too big for the smallest TTB-approved container, which is 50 milliliters. “The only answer is a QR code.”
The EU is allowing a QR code. CalRecycle may do the same. Either way, some producers aren’t printing California-only labels. “We are doing the CA CRV for all of our products across the board,” says Bremer. “It’s just easier to do a label run where you’re printing all the same thing.”
As for aluminum, because other canned products were already included in the Bottle Bill, Katz found that “the CA CRV is something that’s part of the standard can. I have the option to order lids that have nothing on it or a CRV.”
Anyway, Brown notes, because wineries print new labels each vintage, oversight is difficult. “I put the CRV on my label, and we’re running with it because I am sure that if they looked at the label, they would approve,” he says. “That’s a risk I’m taking because no one is ever going to knock on my door.”
The Bottle Bill’s Future Outcome
Like many producers, Manspeaker says, “I don’t think the CRV is necessary because everybody is recycling bottles anyway.” California indeed has single-stream recycling. Residents put all non-redeemable materials into one bin, and the materials are collected, segregated, baled, and sold to an end user. Yet, despite the convenience of curbside pickup, non-deposit containers are less likely to be recycled than redeemable ones.
The Container Recycling Institute (CRI), a nonprofit advocating for the circular economy, found that three times as many deposit-earning glass and plastic bottles, and twice as many deposit-earning aluminum cans, are recycled than non-deposit ones. In 2022, 41 percent of all waste materials in California were recycled, but the recycling rate for CRV packaging was 70 percent, or 19.6 billion containers. Adding wine and spirits to the CRV is estimated to increase recycling by one billion containers annually, says Klug.
Though advocates like CRI would prefer the even lower impact of refillable bottles, CRV is not a reuse scheme; redeemed glass bottles are not washed and refilled. Instead, they are crushed into cullet, one of the materials used to make new bottles and other glass products. Use of cullet lowers the energy, emissions, and amount of raw materials in glass production, and more glass is kept out of landfills.
But glass manufacturers need high-quality cullet. Nigel Dart, the vice president of California’s largest glass container producer, Gallo Glass, has said that the company wants to increase recycled glass in its production from 35 to 75 percent. Redeemed containers “are more valuable because they provide a cleaner, more in-demand feedstock for remanufacturers,” says Klug. “Beverage containers collected through curbside recycling programs are typically exposed to more contaminants and suffer more glass breakage compared to material collected at redemption centers.” Redemption avoids the waste and high processing costs of single-stream recycling.
Supporting the Redemption Infrastructure
But redemption doesn’t work if there’s nowhere to redeem. Between 2013 and 2022, CRI found, half of California’s redemption centers shuttered. Klug cites “the shift from high-value aluminum to low-value plastic containers, rising business costs, and local siting/permitting restrictions.” CRI says closures stemmed from CalRecycle’s “severe underpayments to the centers.” Operators couldn’t afford to continue.
The decline has created what CRI calls “recycling deserts.” Skupny lives far from a redemption center. “Me getting in the car with a bag of bottles and driving miles to recycle defeats the purpose,” he says.
The new laws aim to address the shortage. SB 1013’s companion bill, SB 353, fixes the formula for compensation to redemption centers, increasing their pay. Monies were allocated for redemption center startups. Additional provisions force retailers to accept deposit containers. Advocacy group The Story of Stuff found that 48 percent of retailers wouldn’t take returnables. Stores like Walmart and Costco previously chose to pay a $100-a-day fine for refusing to participate. The new rules eliminated the fine option, obligating retailers to accept packaging or join a nonprofit cooperative that redeems on their behalf. Funding is set aside for technologies like mobile redemption units and reverse vending machines, which dispense coins when fed containers.
“In theory, that is going to give us ubiquitous coverage,” says CRI president Susan Collins. “But it all depends on retailers taking it seriously and how well CalRecycle enforces it.” According to her, the agency was spending all of the $5 per store per year on enforcement. Now it has money for better program management.
All in all, the new California Bottle Bill grants $1.3 billion over six years for redemption, including $60 million to glass manufacturers to use cullet; $10 million to develop a market for plastics reclaimers; $10 million for a conservation corps to recover container litter; and more. State government has been slow to fulfill these allocations, Collins notes. In the meantime, there’s money in the system.
That, says Brown, is the point. “CalRecycle needs to up the money paid to people who are handling redemption, and including wine and spirit bottles is a significant source of revenue. They aren’t really expecting people to redeem wine bottles. It will take years before habits change to reclaim CRV from these items,” he says. “In the meantime, dollars will flow into the underfunded redemption programs.”
Even canners, who forage deposit containers from garbage cans and recycling bins, might not want to lug around wine and spirits bottles, says Katz. But that doesn’t make CRV unworthy. “The rollout hasn’t gone that smoothly, but my hope is it will be positive for the environment. Having giant, heavy bottles not recycled is nuts.
Dispatch
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Betsy Andrews is an award-winning journalist and poet. Her latest book is Crowded. Her writing can be found at betsyandrews.contently.com.
