S&P 500—Dow—NASDAQ—Russell 2000—FTSE 100—DAX—CAC 40—Nikkei—Hang Seng—ASX 200—ALEX—ALK—BOH—CPF—CYAN—FHB—HE—MATX—MLP—NVDA—AAPL—GOOGL—GOOG—MSFT—AMZN—META—AVGO—TSLA—BRK.B—WMT—LLY—JPM—V—XOM—JNJ—MA—MU—COST—BAC—ORCL—ABBV—HD—PG—CVX—NFLX—KO—AMD—GE—CAT—PEP—MRK—ADBE—DIS—UNH—CSCO—INTC—CRM—PM—MCD—ACN—TMO—NEE—BMY—DHR—HON—RTX—UPS—TXN—LIN—QCOM—AMGN—SPGI—INTU—COP—LOW—AMAT—BKNG—AXP—DE—LMT—MDT—CB—ADP—GILD—MDLZ—SYK—BLK—C—ADI—REGN—SBUX—NOW—CI—VRTX—ZTS—MMC—PLD—SO—DUK—CMCSA—APD—BSX—BDX—EOG—ICE—ISRG—SLB—LRCX—PGR—USB—SCHW—ELV—ITW—KLAC—WM—EQIX—ETN—TGT—MO—HCA—APTV—BTC—ETH—XRP—USDT—SOL—BNB—USDC—DOGE—ADA—STETH—S&P 500—Dow—NASDAQ—Russell 2000—FTSE 100—DAX—CAC 40—Nikkei—Hang Seng—ASX 200—ALEX—ALK—BOH—CPF—CYAN—FHB—HE—MATX—MLP—NVDA—AAPL—GOOGL—GOOG—MSFT—AMZN—META—AVGO—TSLA—BRK.B—WMT—LLY—JPM—V—XOM—JNJ—MA—MU—COST—BAC—ORCL—ABBV—HD—PG—CVX—NFLX—KO—AMD—GE—CAT—PEP—MRK—ADBE—DIS—UNH—CSCO—INTC—CRM—PM—MCD—ACN—TMO—NEE—BMY—DHR—HON—RTX—UPS—TXN—LIN—QCOM—AMGN—SPGI—INTU—COP—LOW—AMAT—BKNG—AXP—DE—LMT—MDT—CB—ADP—GILD—MDLZ—SYK—BLK—C—ADI—REGN—SBUX—NOW—CI—VRTX—ZTS—MMC—PLD—SO—DUK—CMCSA—APD—BSX—BDX—EOG—ICE—ISRG—SLB—LRCX—PGR—USB—SCHW—ELV—ITW—KLAC—WM—EQIX—ETN—TGT—MO—HCA—APTV—BTC—ETH—XRP—USDT—SOL—BNB—USDC—DOGE—ADA—STETH—

Potential 5-Cent Container Fee Could Increase Product Costs for Hawaii Businesses

·5 min read·👀 Watch

Executive Summary

Proposed legislation, HB 1928, aims to overhaul Hawaii's HI-5 recycling program by shifting financial responsibility to producers, potentially adding 5 cents per container to business operating costs. Small business operators and agriculture producers should monitor legislative progress for potential cost increases.

  • Small Business Operators: Anticipate a 5-cent per container cost increase on eligible products, impacting margins and pricing strategies.
  • Tourism Operators: Could see increased costs for packaged goods, potentially affecting operational expenses.
  • Entrepreneurs & Startups: New cost structures may impact product viability and scaling plans.
  • Agriculture & Food Producers: Direct financial impact from the per-container fee on packaged goods sold within the state.
  • Action: Monitor legislative status and assess potential impact on product pricing and supply chain costs.

Watch & Prepare

High PriorityBill passage deadline is not specified, but legislative sessions typically have defined end dates.

If ignored, businesses could be caught unprepared for new costs and compliance requirements once the bill is passed and enacted.

Monitor HB 1928's progress through the Hawaii State Legislature. If the bill moves towards significant legislative approval or is signed into law, businesses should update financial projections to include the 5-cent per container fee, review pricing strategies, and explore alternative packaging options.

Who's Affected
Small Business OperatorsTourism OperatorsEntrepreneurs & StartupsAgriculture & Food Producers
Ripple Effects
  • →Increased producer costs → potential for higher consumer prices for packaged goods → reduced disposable income for residents → potential decrease in demand for non-essential goods and services.
  • →New recycling management fees → diversion of funds from other operational areas for businesses → potential for slower business growth or reduced investment in other critical areas like staffing or marketing.
  • →Shift in producer responsibility → potential for innovation in packaging by producers to reduce fee burden → increased demand for sustainable and lighter-weight packaging materials.
  • →Higher operating costs for businesses → potential for increased business failures or relocation outside Hawaii if costs become unsustainable → reduced local employment opportunities.
Hand holding assorted pieces of beach plastic debris highlighting environmental impact.
Photo by Alfo Medeiros

Potential 5-Cent Container Fee Could Increase Product Costs for Hawaii Businesses

Executive Brief

Proposed legislation, HB 1928, aims to overhaul Hawaii's HI-5 recycling program by shifting financial responsibility to producers, potentially adding 5 cents per container to business operating costs. Small business operators and agriculture producers should monitor legislative progress for potential cost increases.

  • Small Business Operators: Anticipate a 5-cent per container cost increase on eligible products, impacting margins and pricing strategies.
  • Tourism Operators: Could see increased costs for packaged goods, potentially affecting operational expenses.
  • Entrepreneurs & Startups: New cost structures may impact product viability and scaling plans.
  • Agriculture & Food Producers: Direct financial impact from the per-container fee on packaged goods sold within the state.
  • Action: Monitor legislative status and assess potential impact on product pricing and supply chain costs.

The Change

Hawaii is exploring significant changes to its HI-5 recycling program through potential legislation, most notably HB 1928. The core of the proposal is to implement a "producer responsibility" model. Under this framework, the producers of beverage containers would be directly responsible for the costs associated with recycling those containers. Specifically, it suggests a fee of 5 cents per container sold, with a designated nonprofit "producer responsibility organization" (PRO) tasked with managing the program. The stated goal is to make the recycling initiative more effective and address the state's diminishing landfill space.

While the editorial from the Chamber of Commerce Hawaii suggests refining the bill, the fundamental shift towards producer-funded recycling remains a key consideration. The operative date will depend on legislative passage and executive approval, but businesses that rely on packaged goods should prepare for potential new cost structures.

Who's Affected

Small Business Operators

Local businesses, including restaurants, cafes, retail stores, and distributors, that sell products with eligible beverage containers will likely face increased operating costs. The proposed 5-cent per container fee will directly add to the cost of goods. Businesses will need to decide whether to absorb this cost, potentially reducing profit margins, or pass it on to consumers through price increases. This could affect competitiveness, especially for businesses operating on thin margins.

Tourism Operators

Hotels, tour companies, and hospitality providers often procure goods in bulk that include packaged beverages. These increased costs for supplies could translate to higher operational expenditures. While the direct impact might be diffused through supply chains, operators should be aware of potential price adjustments for various amenities and services that utilize these containers.

Entrepreneurs & Startups

For new businesses and startups, particularly those in the food and beverage sector, the introduction of a per-container fee could significantly alter initial cost projections. It may impact product pricing strategies, the feasibility of certain business models, and the overall cost of scaling operations within Hawaii. Access to capital may need to account for these added operational expenses.

Agriculture & Food Producers

Local farmers and food producers who package their products in eligible containers for sale within Hawaii will be directly subjected to the 5-cent per container fee. This adds a tangible cost to their production and distribution process. Such a fee could influence packaging choices and potentially make products less price-competitive compared to those with non-eligible packaging or those imported without similar domestic fees.

Second-Order Effects

  • Increased producer costs → potential for higher consumer prices for packaged goods → reduced disposable income for residents → potential decrease in demand for non-essential goods and services.
  • New recycling management fees → diversion of funds from other operational areas for businesses → potential for slower business growth or reduced investment in other critical areas like staffing or marketing.
  • Shift in producer responsibility → potential for innovation in packaging by producers to reduce fee burden → increased demand for sustainable and lighter-weight packaging materials.
  • Higher operating costs for businesses → potential for increased business failures or relocation outside Hawaii if costs become unsustainable → reduced local employment opportunities.

What to Do

This proposed legislation represents a significant potential shift in operating costs for businesses reliant on packaged goods. Given the ongoing legislative process, a "watch" approach is recommended, focusing on monitoring key triggers that would necessitate immediate action.

Monitor the Legislative Status:

Keep track of HB 1928's progress through the Hawaii State Legislature. Pay close attention to:

  1. Bill Passage: Note when the bill is scheduled for votes in committees and on the floor of both the House and Senate.
  2. Effective Date: Identify the proposed effective date if the bill is passed and signed into law. This will determine the timeline for compliance.
  3. Specifics of the PRO: Understand the structure and operational plans of the proposed producer responsibility organization (PRO), as this will influence how the fee is collected and managed.

Assess Potential Cost Impact:

Begin modeling the financial implications of a 5-cent per container fee on your product lines. For businesses selling goods with eligible containers, this could mean an additional cost of thousands of dollars annually, depending on sales volume. Consider:

  • Wholesale vs. Retail Pricing: Evaluate how this cost might affect your wholesale pricing to distributors or retailers, and how it might translate to your direct-to-consumer pricing.
  • Supply Chain Negotiation: Engage with your suppliers to understand how they plan to implement or pass on these costs. Explore potential for alternative packaging that might incur lower fees, if available.

Action Trigger: If HB 1928 moves forward towards significant legislative approval or is signed into law, businesses should:

  • Update Financial Projections: Immediately incorporate the 5-cent per container fee into budgets and financial forecasts.
  • Review Pricing Strategies: Determine a strategy for adjusting product prices to offset the new cost, considering market competitiveness and consumer elasticity.
  • Optimize Packaging: If feasible, explore alternative packaging solutions that may be exempt or subject to lower fees, or investigate ways to reduce the number of containers sold.

Do Nothing (for now): Until the bill progresses significantly in the legislative process, drastic changes are not immediately warranted. However, acknowledging the potential for this new cost is crucial for future planning.

More from us

Related Articles

Aerial shot of firefighting base with planes, trucks, and personnel in a rural area of Brazil.
Policy & Regulation

PUC Greenlights Hawaiian Electric's Wildfire Mitigation Plan, Paving the Way for Enhanced Grid Resilience

·5 min read
Close-up of a hand signing a legal document with a fountain pen, symbolizing signature and agreement.
Policy & Regulation

Hawaii's New Laws: Key Changes and Business Implications

·3 min read
A minimalist office setup featuring a planner, clipboard, card, and pen, perfect for planning and organization.
Policy & Regulation

Maui's $1.56B Budget: A New Direction for Business and Investment

·3 min read