California is known for having some of the most stringent consumer protection laws in the nation. Nonetheless, the state’s fight against the fleecing of consumers apparently ended when Senate Bill 270, a statewide ban on plastic bags, was passed by the legislature and signed by Gov. Brown. Many California counties and municipalities have enacted their own plastic bag bans with little fanfare. Besides the fact that a statewide ban leaves consumers fewer choices, this particular piece of legislation has become is an unholy alliance between environmentalists and big grocery interests.
SB 270 prohibits most stores from providing single-use plastic carryout bags to customers, with specified exceptions, such as produce and dry cleaning bags. As an alternative, stores can distribute compostable (paper) bags to consumers at a cost of not less than 10 cents per bag. Grocers would keep the fee as compensation for compliance costs. Normally the fees collected from bag purchases are remitted to the state for environmental programs or, if kept by the grocers (as is the case for the Los Angeles County bag ban), must be used for recycling efforts and educating customers about recycling. However, SB 270 does no such thing, and grocers are thrilled. The bags that consumers would have to purchase for 10 cents if they do not bring their own bags cost about 5 cents to 7 cents per bag. This is a windfall for the grocery industry with a typical 2 to 3 percent profit margin. Indeed, with a 30 to 50 percent markup on bags, it would be one of the most profitable items sell. Just from the sale of bags, they would stand to make almost half a billion in annual revenues. Simply put, California’s bag ban would require customers who do not have their own bags to hand over their money to benefit a private industry.
Thankfully, this state-sanctioned transfer of wealth got enough attention from the public, and with the help of the American Progressive Bag Alliance, opponents gathered enough signatures to place ban before voters in two November 2016 referenda, delaying the effective date of the new law and potentially altering or voiding it. Prop 67 gives voters the opportunity to approve SB 270 in its original form or to repeal it altogether by rejecting the measure — essentially maintaining the status quo, since it has not yet taken effect. If voters uphold SB 270 by passing Prop 67, Prop 65 allows them to redirect the fee collected by grocers to the State of California for environmental programs and clean-up efforts or, if the voters reject Prop 65, allows the revenue to remain with the grocers.
In an August 2016 poll by Probolsky Research, approximately 58 percent supported Prop 67, the ban on single-use plastic bags. However, 57 percent of voters also supported 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.” While there are plenty of arguments to be made about the merits of a plastic bag ban, being that plastic bags comprise such a tiny amount of solid waste, Californians no doubt support such a ban. However, they appear willing to draw the line when it comes to the state mandating the siphoning of their wallets for special business interests.
So where does this leave environmental groups? One would think that with polls reflecting majority approval for a bag ban and majority approval for the fees going to environmental causes, they would be overjoyed. Of course not, silly. They are more concerned about losing the support of the grocery industry than in helping the environment. If California’s grocers can’t keep the fees from the sale of paper and other reusable bags, grocers in other states that are considering bans will also be less likely to support them. Environmental groups need them not just for the tens of thousands of dollars they have spent lobbying in support of the ban, but also in order to make themselves look less extreme on the issue. Hey, your friendly neighborhood Safeway thinks banning those plastic bags is a great idea, so bag bans can’t be all bad, right?
It is one thing for grocery stores to have their own policies on what kinds of bags to provide and how much to charge for them. It should also be their choice if they wish to provide free bags, plastic or otherwise. But for the state of California to mandate a transfer of wealth from shoppers to big grocers simply reeks of back-room deals and cronyism. At the very least, voters will have a say in this matter in November.
National Center for Policy Analysis Senior Fellow Pamela Villarreal’s latest report on plastic bag bans, California’s Bag Ban: A Wealth Transfer from Customers to Big Grocers, can be found at: http://www.ncpa.org/pub/california-s-bag-ban-a-wealth-transfer-from-customers-to-big-grocers. Villarreal and other NCPA scholars have published previous studies on plastic bag bans, including a study on the economic effects of the Los Angeles County bag ban. The NCPA is a non-profit, 33-year old think tank, dedicated to the research of free market solutions to public policy problems. It is based in Dallas and Washington, D.C.