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Analysis: Proposed California Regulations Could Impact Promo

Legislators in California are considering several bills that would establish regulations that could potentially affect the promotional products industry. A primary goal of the bills is to help protect the environment, particularly from plastic waste.

AB 2779

Bill Details: Bottle caps are one of the most common forms of beach trash. To help reduce the shoreside pollution and plastic pollution in general, Assembly Bill 2779 would prohibit retailers from selling or offering single-use plastic beverage containers unless the bottles’ caps are tethered or otherwise contiguously affixed. The upshot is that beverage makers, from the household names to regional labels, would have to ensure that the caps are properly affixed to the containers, which could be holding everything from water or soda, to sports drinks and more.

The bill defines a container as an “individual, separate bottle, can, jar, carton, or other receptacle, however denominated, in which one liter or less of a beverage is sold, and that is constructed of plastic. ‘Beverage container’ does not include a cup or other similar open or loosely sealed receptacle.” Introduced in February, the bill has been read twice. It’s currently referred for a third reading in the Assembly.

Potential Impact on the Promo Industry: On the face of it, the bill’s language appears to specifically address retail sales to consumers. But would it also be used as a standard for ad specialty suppliers and distributors selling items like, say, logoed single-use plastic water bottles? At least one industry legal expert thinks it would. “Products that would be affected by this bill would be plastic bottles with pre-filled beverages that have a plastic cap, provided the bottles are intended for only a single-use,” says Leeton Lee, former in-house counsel for Top 40 supplier ETS Express (asi/51197). Lee’s independent firm Comply Box advises promotional product companies on product compliance issues.

Even if you argue the regulations would apply only to retailers, some end-buyers might balk at the prospect of circulating branded pre-filled single-use plastic bottles with untethered caps in a regulatory environment where such caps are banned at retail. To be safe, those buyers could start demanding that caps be tethered to avoid any potential violation and/or the association of their brand with a product deemed to be a prohibited pollutant by the state. The market pressure could compel suppliers to adapt, even if the regulatory rules aren’t specifically aimed at them.

On the bright side, Lee said the legislation, if passed as drafted, “would not impact the reusable drinkware category at all, since virtually all of the drinkware sold in our industry is sold empty (i.e., no beverage contents), and is intended to be reused multiple times by the consumer.”

AB 2379

Bill Details: Counselor has written about Assembly Bill 2379 before, but we’d be remiss not to do so again here. Introduced in February, the bill currently resides with the Assembly’s Environmental Safety & Toxic Materials Committee. If enacted by the California Legislature, the bill would require clothing makers to put a warning label on new garments made of more than 50% synthetic material, such as polyester. The warning could be in the form of a sticker, hang tang or other label type. It would have to include a statement that the garment sheds plastic microfibers when washed.

“Garments made from synthetic fabrics, such as polyester, can shed up to 1,900 microfibers per wash,” the bill states. “Effluent from washing machines and wastewater treatment plants is a significant source of microfiber pollution that enters waterways and the ocean.” That pollution can impact the health of marine life and humans who drink water or eat fish that contains microfibers, bill sponsors maintain. The bill would prohibit the sale of new clothing composed of more than 50% synthetic fiber material in California unless the garments bear the warning label.

Potential Impact on the Promo Industry: Garments made from synthetic fibers have exploded in popularity in the promotional products market, in part because of their performance properties (moisture-wicking, etc.). Apparel suppliers would have to ensure these garments carry the proper warning label. That labeling might not be limited to California. Out of an abundance of caution, apparel makers could decide to give all clothing with more than 50% synthetic fiber the warning tag. Why? To cover their bases because of where the end-buyer might be located, regardless of the distributor’s location. For instance, a distributor customer might be in Las Vegas, but they could be selling microfiber shirts to a client in San Francisco. It’s plausible that California would deem the sale as having occurred in the Golden State. If so, then it’s possible the warning label rule would apply.

One way around the labeling requirement could be to accelerate the trend toward blends, reducing synthetic fiber usage in garments to below 50%. But could that disrupt the winning formula of synthetic fiber garments’ feel, look and performance…? The legislators behind AB 2379 aim to have the regulations take effect by January 1, 2020.

AB 1884

Bill Details: Assembly Bill 1884 would ban facilities where food is served on the premises – restaurants, for example -- from providing customers with single-use plastic straws, unless a customer specifically asks for one. Introduced in January, the bill currently resides with the Assembly’s Natural Resources Committee, where it was referred on Wednesday.

Potential Impact on the Promo Industry: Looked at positively, the regulations could potentially stimulate sales of logoed reusable straws, especially those made from materials other than plastic. Conversely, depending on how things go, restaurants and food-serving bars could decide to stop buying single-use plastic straws. That could possibly hurt sales of branded plastic straws not intended for multiple uses. Why would the eateries ditch such straws? Some could conclude that the threat of a $25 per day fine for violations, along with the hassle of ensuring that staffers comply, isn’t worth keeping straws in service.