California Redemption Value (CRV) is here. Now what?

Now it is time to refine and define.

We're four days into the launch of California's CRV, and it's impressive to see CalRecycle's grasp on the complex regulations, especially considering the varied interpretations across the industry. There is however an opportunity here to refine these regulations, particularly proposals that would reduce the administrative load for both CalRecycle and the alcohol producers affected by these rules. Given our deep involvement in the industry, our organization is well positioned to identify and propose enhancements that could benefit all parties involved, ensuring a beneficial outcome from this regulation for years to come. 

Building on that, I value CalRecycle's approach in seeking further feedback on the regulation, and I plan to submit our comments. Given the massive impact of this regulation, everyone's input is important. I encourage you to share your thoughts at the following link: https://www2.calrecycle.ca.gov/PublicNotices/Details/5299. When providing comments, it's important to remember that CalRecycle is not the architect of this new law, rather, they have been tasked with its implementation and fee collection, which is certainly no small feat. 

Over the last year, our business has been actively involved in onboarding thousands of suppliers and shippers to comply with the current requirements. During this process, we've identified several gaps in both the process and understanding. Here is our feedback on these areas for improvement: 

• Labelling and the use of the QR code and/or other machine-readable icons. The use of QR codes is a great way and can be combined with the existing QR code you may be using. One will just need to make an accommodation at the top of the landing page to identify the CA CRV lettering, and next to or within the QR code you will need to indicate “Deposit Refund”. What you need to be conscious of is that California will be the first of many requiring this, so building a QR strategy for the long run will be a good idea. You can see what would happen here, if all states did the same thing and required it to be on the actual label. 

• Reporting. The idea of a monthly reporting for a year, then deciding a producer is too small, so you can move to an annual filing should be modified. A simple threshold number should be established. It will save time and money for the state and the producer. If you are going to owe over $1000 for the year (10,000 bottles) then self-report monthly. If under this number, then an annual report should be adequate. The state does not want/need thousands of monthly submissions with only a few dollars associated with them each month. 

• “Pay on behalf of” reporting for direct shippers is an important part of this. Once this is in place the reporting obligation of the seller goes away if all their sales are through a “Pay on Behalf of” agreement. Super helpful and akin to the Marketplace facilitator for sales tax. 

Rather than just critique the system, add your voice in a constructive manner.

Remember, similar initiatives are likely to be adopted in many other states. If we can establish a successful model here in California, the nation's largest economy, it sets a positive precedent for others to emulate. Your involvement is crucial; your unique perspective is essential, as no one else can express your concerns for you.