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Glass recycler shutting doors

Originally printed in the July 30 2008 Business Section of the Toronto Star

Owens-Illinois cites LCBO's `Enviro Chic' plan, but agency says argument groundless

July 30, 2008

Dana Flavelle
Laura Stone

It was supposed to be a "win-win" for environmentalists and an aging, inefficient Toronto glass recycling plant.

The Liquor Control Board of Ontario's move 18 months ago to a deposit-return system for wine bottles would create more high quality glass for recycling.

That would translate into more "green" jobs and in turn encourage the owners, Owens-Illinois Inc., the world's largest glass-bottle maker, to invest in upgrading the aging south Etobicoke plant.

At least that's how Katrina Miller, spokesperson for the Toronto Environmental Alliance, saw it.

"We were all very happy about it," Miller said in a telephone interview yesterday.

But that's not how things turned out.

Yesterday, Owens-Illinois announced the plant would close at the end of September at a cost of 430 jobs. Production will move to other North American facilities, including Montreal and Brampton, the company said.

Part of a "global realignment" of its assets, the $7.6 billion-a-year company blamed the recent downturn in the U.S. economy, a higher Canadian dollar and skyrocketing fuel costs, factors that have affected many other firms.

But it also cited the LCBO's recent "attack on glass" as a deciding factor.

As part of the LCBO's "Enviro Chic" program, the provincial Crown corporation has been actively encouraging wine, beer and spirits makers to switch away from glass to other lighter, more fuel-efficient forms of packaging.

The move has hurt sales of Owens-Illinois' finished products as more beer, wine and spirits companies move to plastic and Tetra Pak-style containers, the company said.

The LCBO disputed the glass recyclers' claims, saying less than 5 per cent of its $4.1 billion in sales last year were in non-glass containers.

"We're always concerned to learn about plant closures," said LCBO spokesperson Chris Layton.

"But the facts just don't support their argument."

Layton added that the LCBO would be happy to work with the company to develop a new, lighter-weight form of glass.

Owens-Illinois said the LCBO's influence, as the single largest purchaser of booze in North America, extends well beyond its borders.

The world's largest glass recycling company was sufficiently concerned about the LCBO program that its chair and chief executive officer, Albert Stroucken, wrote a letter of protest to Ontario Premier Dalton McGuinty earlier this month.

"For over two years, the LCBO has been aggressively encouraging and in some cases effectively forcing our customers to switch from glass packaging to so-called alternatives, such as plastic and aseptic cartons," the letter says.

The campaign has resulted in at least one major Owens-Illinois customer opting to switch from glass to plastic, which could lead to a partial shutdown of a production line at its Brampton plant unless it can find new customers or shift production from other plants, the letter also warns.

The customer accounts for nearly one quarter of the units handled by its Ontario plants, the letter also noted.

Owens-Illinois says the LCBO's claims that alternative packaging is more environmentally friendly are unsubstantiated, a position shared by environmental activists such as Miller.

Plastic and aseptic packaging are far more likely than glass to end up in landfill, instead of being recycled, Miller says.

The LCBO's Layton said Ontario isn't the only place where this is happening and many other kinds of beverages, such as water and soft drinks, have already made the shift away from glass to other forms of packaging.