How hard seltzers are holding up expansion of CT’s 'Bottle Bill'

Apr 18, 2023

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Businesses in Connecticut were recently surprised to learn that spirit-based seltzers would be subject to a 10-cent deposit. Malt-based seltzers, like White Claw, are less of an issue.

Katie Dykes, commissioner of the Connecticut Department of Energy and Environmental Protection, speaks in June 2022 at an event in Stratford. Republican's "growing frustration" with DEEP over a number of issues is likely to result in hours of debate when Dykes' re-nomination eventually comes before the House, according to Minority Leader Vincent Candelora, R- North Branford.

Frustrations over Connecticut's roll out of a long-awaited expansion to the "Bottle Bill" that increases the number of beverages eligible for a deposit have spilled over into a public fight over the re-nomination of one of Gov. Ned Lamont's cabinet secretaries, and sent top Democrats rushing to smooth over tensions with new legislation clarifying the nearly two-year-old law.

The state's commissioner of the Department of Energy and Environmental Protection, Katie Dykes, is facing an unusual delay in the typical formality of having lawmakers sign off on a governor's cabinet appointments, particularly those who are already in the position of leading an agency.

While House leaders said this week that they ultimately expect to confirm Dykes, they warned that Republican anger over what they describe as a broken agreement to exclude wine-and-spirit-based seltzers from a large expansion of the state's container redemption return program — better known as the Bottle Bill — could spark hours of debate when her nomination is eventually brought to a vote.

Sympathetic to the Republicans’ concerns, Democrats have drafted a bill making several alterations to the Bottle Bill that they hope will clarify the Legislature's intent to keep certain seltzers out of the program.

"I wouldn't say [Dykes' nomination is] being held up, but I can say we’re not taking it up until we get this Bottle Bill fixed," said state Rep. Joe Gresko, D-Stratford, who serves as House co-chair of the Environment Committee.

The blow-up over the Bottle Bill is only the latest in a series of simmering debates between DEEP and Republicans, according to House Minority Leader Vincent Candelora, R- North Branford. Other issues that contributed to the caucus' "growing frustration" with the agency include the state's ongoing waste management crisis, a growing number of confrontations with black bears and the removal of hundreds of trees from a state forest in Northwest Connecticut last year.

Candelora said that he expects Republicans take time venting their frustration when Dykes' nomination eventually comes up for debate in the House, and that several members are likely to vote against her confirmation. "I think there's just a matter of finding the time to take up that nomination," Candelora said, adding that he was undecided on how he will vote.

Dykes, a Yale Law School graduate who previously served as chair of the Public Utilities Regulatory Authority, had her first cabinet nomination approved by a voice vote in 2019.

In response to questions about the delay in Dykes’ nomination, Lamont spokesman Adam Joseph said this week that the administration is working with the legislature to make any changes to the Bottle Bill necessary to preserve lawmakers’ original intent.

"Commissioner Katie Dykes works tirelessly on behalf of the State of Connecticut to champion policies that deliver on the promise of preserving the environment and our sustainable energy future, while protecting ratepayers and addressing climate change," Lamont said in an additional statement released by his office. "Connecticut is fortunate to have someone with her unmatched expertise leading the Department of Energy and Environmental Protection. I look forward to her reconfirmation."

The controversy around the Bottle Bill first arose last year as DEEP prepared to implement a major expansion beginning on Jan. 1 that would increase the size of the deposit on certain bottles and cans from 5 cents to 10 cents, while also adding a host of new beverages such as seltzers, teas, coffee, juices and energy drinks to the program.

Early in the year, the agency sent letters to at least one wine and liquor distributor informing them that spirit-based seltzers — including popular brands such as High Noon — would be subject to the 10-cent deposit, according to Lawrence Cafero Jr., the executive director of the Wine and Spirits Wholesalers of Connecticut.

Because wine and liquor bottles have long been exempted from the Bottle Bill, Cafero said he sent several messages to Dykes and other DEEP officials objecting to the inclusion of spirit-based seltzers. In an attachment included with several of those messages, he included a clip showing Democratic leaders stating on the House and Senate floor in 2021 that their intent was not to include spirit-based seltzers under the expanded deposit program.

While similar in size and shape to cans of malt-based seltzers — such as Truly and White Claws — Cafero said that spirit-based seltzers are not distributed by beer wholesalers that have specially-designed trucks and warehouse systems to comply with the requirements of the Bottle Bill, which was first passed in 1978. In order to meet those same requirements, Cafero said that wine and spirit wholesalers would be on the hook to purchase entirely new infrastructure.

"It's not a no-brainer, now you’re in the Bottle Bill, no big deal," Cafero said. "It's a huge deal and millions of dollars of capital expenditures."

Despite the industry's objections, DEEP released a memo in December stating that "carbonated spirit-based beverages" would be subject to the deposit beginning on Jan. 1.

During a committee hearing earlier this month, Dykes was faced with pointed questions from state Rep. David Yaccarino, R- North Haven, over her agency's decision to include spirit-based hard seltzers, despite the apparent agreement between lawmakers to exclude them.

"Your office went against our language that was passed," Yaccarino said as he pressed Dykes several times on the issue.

In response, Dykes stated that she had consulted with Attorney General William Tong's office and determined that because the text of the bill did not include a definition of "hard seltzers," her agency was left with no other choice but to include all carbonated, alcoholic seltzers under its guidance.

Still, Dykes said she had been made aware of the industry's concerns and agreed to use her discretion not to enforce adding the 10-cent deposit charge onto spirit-based seltzers while lawmakers worked out another agreement at the start of this year's legislative session.

"We have been working with stakeholders to resolve this issue in a way that adheres to the Legislature's intent, and look forward to a quick resolution," DEEP spokesman Will Healy said in a statement on Wednesday.

The decision to pause enforcement, however, has upset the owners of the state's independent redemption centers, who say they are flooded with thousands of cans of vodka and other spirit-based seltzers that customers assume are eligible for a 10-cent refund.

"If DEEP and the industry can't agree on what's included in the expansion, how is the public expected to be aware of what should be covered," Shahil Kantesaria, a consultant for CT Redemption Centers, said in public testimony submitted to lawmakers.

Still, legislative leaders said this week they are planning to fast-track the legislation codifying the exemption to spirit-based seltzers, bringing it to the floor of the House and Senate early this month along with several other must-pass bills, according to House Speaker Matt Ritter, D- Hartford.

Ritter said that while both DEEP and Dykes have been "very responsive" to concerns raised by lawmakers, he understood the frustration of Republicans and the liquor industry after being given repeated assurances from Democrats that the expanded Bottle Bill would not include spirit seltzers.

"If the roles were reversed," and the issue involved a Republican cabinet nominee, Ritter said, "We would feel the same way."