California’s Bag Ban: A Wealth Transfer from Customers to Big Grocers
by Pamela Villareal, NCPA, September 7, 2016 (excerpts)
…Surprisingly, the California Grocers Association joined with environmental groups lobbying for a statewide ban on plastic bags.
The reason?
The grocers would keep the 10-cent fee per paper bag charged to customers as pure profit — minus the cost of purchasing paper or reusable plastic bags, estimated at 5 cents to 7 cents per bag. None of the fee revenue is remitted to the state, nor is the grocer required to prove that the fees are used for recycling efforts and education.
According to a 2014 study from Blue Sky Consulting, grocers stand to profit handsomely from a statewide ban, depending on consumer behavior. Approximately one-third of California residents live in jurisdictions that already have plastic bag bans similar to SB 270. However, grocers would generate new revenue from selling paper bags or reusable plastic bags to the remaining two-thirds of California residents.
Studying the effects of existing bag bans on San Jose, Santa Monica and the unincorporated areas of Los Angeles County, researchers found:
• Disposable paper bags had a 3 percent market share before the ban in those three jurisdictions, and a 16 percent market share after the ban.
• Reusable bags had a 5 percent market share before the ban and a 45 percent market share afterward.
• If a similar change in market share occurred across the state after the plastic bag ban, retailers could gain an estimated $442 million in annual revenue from the sale of paper bags and reusable bags.
The grocer’s net revenue, after the purchase of reusable and paper bags, is free of state taxes, since the profits derived from the fees are considered reimbursements for compliance costs….
• In an August 2016 poll by Probolsky Research, approximately 58 percent support Prop 67, the ban on single-use plastic bags [see the figure].
• However, 57 percent of voters also support Prop 65, requiring stores to “deposit bag sale proceeds into a special fund administered by the Wildlife Conservation Board to support specified categories of environmental projects.”
A Conundrum for Environmental Groups.
Now that voters will decide how the fee is spent, environmental supporters of the bag ban are — ironically — in a tizzy. They fear that eliminating this revenue source for grocery stores will turn grocers against the bag ban in California and other states. Never mind that — as an editorial from the East Bay Times puts it — the redirected fee “could supply millions of dollars for some of their pet causes.”
Conclusion.
The debate over California’s statewide plastic bag ban has shaped up to be a battle over the involuntary transfer of wealth from customers’ wallets to big grocers. Ultimately California voters will decide what they do with their money and how it should be spent (as should be the case), but other states considering bans similar to SB 270 should look at the impact of fleecing the average shopper to line the pockets of corporate and special interests….
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