Monday, May 4, 2009

Globalization and the Cost of Bottling

[Photo Credit: Angelo De Ieso II of Brewpublic]

Mike Weksler of Portland's Green Bottling e-mailed me yesterday with this dilemma:

In January of this year my cost to purchase a case of 12 22oz amber beer bottles went up $.65. It is less expensive for me to purchase my bottles from China, ship them here, and rent a facility to store them than it is for me to purchase them from the local distributor.

What is worse is that the local distributor gets the bottles from an OI plant that is in NE PDX, 3 miles from our HQ.

I don't like the idea of sending our money away from the local economy, and the extra fossil fuels that I would have to consume to get my glass shipped to PDX.

I could also choose to buy my bottles from a plant in OK for $1.20 per case less than I spend now as well.

I am rushing off to Eugene so don't have time to comment too much, but will try and do so later. The standard trade argument would be: well, we should not want to make bottles here, just the high value-added beer and by letting China make the bottles we are all better off (us and the Chinese) . A rejoinder to this is that the cost of shipping is artificially low as the shippers do not have to pay the true cost of carbon usage, so while it may be privately profitable to source bottles from China it is not socially profitable. [This assumes, by the way, that the China plant is not more energy efficient than the PDX plant, which I think is a safe assumption]

The answer? Well, a global carbon tax that accurately reflected the cost of carbon emissions would get the prices right, but let's get real, that 'aint gonna happen anytime soon. So what do you tell a guy like Mike, who is trying to do the right thing, but who knows that if he goes local, some other person could start another bottling business that sources from China?

What do you think?

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