June 30 (Bloomberg) -- California grocers, who may realize as much as $1 billion in new revenue from a 10-cent fee on paper bags, are teaming up with environmentalists in a push to make their state the first to prohibit single-use plastic shopping bags.
The retail and grocery lobbies, which backed some of 13 failed California bills since 2007 to curb or ban the bags, are facing off against paper- and plastic-bag manufacturers who oppose the restrictions. Together, the two sides spent $366,000 to lobby California lawmakers in the first three months of this year, according to state filings.
Plastic bags are now banned in more than 100 California cities and counties, including Los Angeles and San Francisco. Many require stores to charge a dime for each paper carryout sack, to encourage consumers to bring their own reusable bags, a proposal included in the state legislation.
“This is an enormous cash grab on behalf of corporate grocery interests,” said Jon Berrier, a spokesman for the Washington-based American Progressive Bag Alliance, which represents plastic-bag makers. “It’s probably the largest transfer of wealth from the consumers of California to corporate grocery interests. It’s a terrible piece of legislation and we’re confident that it will be defeated, just as its predecessors were.”
California shoppers use an estimated 14 billion plastic bags annually, according to a legislative analysis. Substituting paper bags at 10 cents each would yield $1.4 billion.
In West Hollywood, Nicholas Papageorge, 58, paid 40 cents for the four paper bags he loaded into his Audi sedan last week at the Kroger Co.’s Ralphs grocery store. He said he didn’t mind switching from plastic to paper, but wasn’t thrilled about paying the bag fee.
“They’ve transferred the cost of saving the planet onto the consumer,” Papageorge said. “For the consumers, this is bad thing.”
Environmentalists have been pressing for years to eliminate plastic bags, saying they pollute California’s coastal waters, where they are mistaken for food by turtles and seabirds, and cost local governments millions to clean up.
“Despite their lightweight and compact characteristics, plastic bags disproportionately impact the solid waste and recycling stream and persist in the environment even after they have broken down,” according to Californians Against Waste, a nonprofit environmental group founded in 1977, which supports the ban.
The current fight centers on Senate Bill 270, which would prohibit single-use plastic bags after July 2015. A similar bill last year failed by three votes in the state Senate after some lawmakers said the ban could cost jobs in plastics factories. The new bill includes $2 million to help retrain workers and retool plants.
The author of both bills, state Senator Alex Padilla, a Pacoima Democrat, has enlisted support from the California Grocers Association, which opposed or was neutral in previous attempts.
Supermarket owners back a uniform statewide standard to eliminate confusion among shoppers navigating a patchwork of local rules, said Ron Fong, chief executive officer of the California Grocers Association, which represents the proprietors of about 6,000 stores.
While the 10-cent paper bag fee is required to go to the stores, some will lose money under the law, he said. Stores pay 10 cents to 23 cents per paper bag wholesale, depending on quantity and other factors, Fong said.
“The whole goal of this law is to reduce by charging for the bag,” he said. “The fee acts as a disincentive for the paper bag.”
Padilla said his new bill, like the failed one, is intended to reduce clutter from discarded bags and encourage a switch to reusable bags.
“This bill has been a tough one for previous authors and in previous sessions,” Padilla, who is running for secretary of state, said in a telephone interview. “For too long, this has been cast as an environmental issue in our coastal areas and waterways. A plastic bag in Yosemite Valley is just as problematic as a plastic bag off the coast of Santa Monica.”
The bill would exempt bags for prescription medications and for unwrapped food such as bulk items from bins.
Outside California, cities including Chicago, Seattle and Portland, Oregon, have outlawed single-use plastic bags. No state has imposed a ban, although all four populated counties in Hawaii have passed local laws.
Seventeen states are debating bans or taxes on plastic shopping bags, according to Bag the Ban, a website financed by Hilex Poly Co. in Hartsville, South Carolina. The company, which makes plastic bags, is a unit of Wind Point Partners LP, a Chicago-based private equity firm.
Current bans affect about 4 percent or 5 percent of the U.S. population, said Mark Daniels, a Hilex Poly vice president who heads the plastic bags alliance. He estimated annual revenue in the U.S. industry at $1.5 billion to $2 billion.
“We have seen very little impact on our business,” Daniels said. “One of the strong tailwinds of this industry is that we are competitive in the worldwide market. We don’t want to see this kind of legislation spreading to other states.”
The paper-bag industry also opposes Padilla’s bill, said Cathy Foley, vice president of the American Forest & Paper Association. Her industry hasn’t benefited from laws requiring consumers to pay for paper bags, she said.
“Paper bags are made from a renewable resource, are 100 percent recyclable, and have a high recovery rate compared to bags made from competing materials,” Foley said by e-mail. “Taxing them implies that they are part of the environmental problem that plastic bag bans are attempting to solve.”
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