Monday, October 27, 2008

Organzied groups abusing Michigan's bottle deposits

"It's like a rebate, $2.40 a case for pop and beer," said Jim Wanty, president of O & W Inc., a beer distributorship in four Michigan counties near the Ohio state line. O & W lost about $65,000 last year from picking up more returned containers from stores than it had delivered.

In some cases, smuggling rings have collected and crushed millions of cans in Ohio, selling them to several stores in southeast Michigan. When buyers don't return the bottles to get their deposits back, states or distributors get to keep the money, and store owners pocketed more than $1.5 million by redeeming cans for which no deposit had ever been paid. Law enforcement broke up the rings last year, and a trial for 12 defendants is scheduled to start Monday.

Wanty said fraud has increased since stores installed machines to handle bottle returns. Grocery workers used to accept cans in person, which he said made customers more reluctant to claim a deposit return on an out-of-state container.

"It was eyeball to eyeball, now it's eyeball to a machine," Wanty said.