Beverage Container Recycling for the Wine Industry Begins January 1, 2024
Nov 20, 2023 | 5 min read
CalRecycle anticipates bringing 1 billion bottles into the recycling program with the addition of wine and spirits. Amy Cameron, CalRecycle
Written by Jeanette Tan | Photo by Shutterstock
This new law affects all California wineries and out-of-state wineries shipping directly to customers in California.
Just a reminder that I’m not a CPA or a Compliance expert. For the rules and regulations go to
CalRecycle YouTube Channel Webinar Recording - Many details have changed since this recording
Purchase our Mini-Course: CRV for the Wine Industry
We send you updates as we learn about changes in the rules, so you don’t have to hunt for these.
The Mini-Course includes
Worksheet to calculate the eligible containers for both the CRV and Processing Fee
Videos showing how to pull the reports and fill out the worksheet
Instructions on how to pull CRV related reports in Commerce7, WineDirect, eCellar, and Microworks
Recording of Part 1, Introduction
Recording of Part 2, Q&A
Forum for all course and webinar participants where you can ask questions
2/23/24 Update
This is per the CalRecycle webinar they gave today. Their recording will be available next week
CalRecycle still has a big backlog of applications. See the 1/8/24 update for details.
Wineries are responsible for Off-Premise Wholesale CRV in addition to the On-Premise Wholesale sales
Shrinkage and Spoils are not subject to CRV, because these are not transfers.
To exclude the bottles used for Pours at the winery, you must record these separately from the other samples.
Remember that the Processing Fee is paid based on sales and transfers, not on bottle runs. However, the number of eligible bottles is different than for the CRV. (Our worksheet will help you calculate this.)
1/8/24 Update
The holder of the CA ABC 02 license is responsible for paying the Processing Fee (not the mobile bottler).
Turns out the Processing Fee is not paid after bottling, but is paid each month after the eligible wine is sold. Of course, the list of eligible wines is slightly different than the list of eligible wines for the CRV.
CRV collected on all taxable DTC sales (sales in CA) is taxable. So the taxable CRV must be reported on your CDTFA Sales Tax Return.
CalRecycle has been buried with new applications. You will need your account number to file the return. If you have not received it by the due date of the first return, CalRecycle will not penalize you. However, you must be prepared to file it soon after your application is approved.
After your application is approved, you need to apply for access to DORIIS, their online portal GO TO DORIIS
The 4 main eCommerce programs have implemented their CRV modules. Some have turned it on automatically, and for the others, you need to turn it on. We have not seen all of the reports at this time, but we will be including those details in the SOPs for each program.
12/21/23 Update
The winery, not the bottler, will submit and pay the Processing Fee. This is due for all wines bottled.
Regarding samples and freebies: if the wine is poured on-site, the CRV is excluded. This means that your team needs to clearly identify the samples/freebies poured on-site versus all others.
11/20/23 Update - Turns out (no surprise) some of the rules have been changing. The Sonoma County Vintners held a webinar in Mid-November and discussed these changes:
Wines bottled and labeled before January 1, 2024 DO NOT need to comply with the label rules, so get your labels for your 2024 botte runs updated now.
The winery needs to pay for the CRV for wines sold to Restaurants and DTC (including restaurants is a big change). See the slide at 24:00 **2/23/24 Update: The winery needs to pay for wine sold to off-premise wholesale accounts as well.
Some “samples” and other promotional freebies are subject to the CRV and some are not. Stay tuned for more details.
If you hold an 02 license, you are both the manufacturer and the distributor (remember to use the CalRecycle definitions). However the mobile bottler is also the manufacturer. Stay tuned for more regarding who CalRecycle expects to submit the Processing Report and fees.
There are 4 aspects of the program:
Registering your winery
Paying the processing fee after bottling
Implementing the CRV collection and reporting
Updating your labels
First of all, as with ALL government programs, the terms used in the rules and regulations is specific to THEIR program and NOT how they are commonly used in the wine industry. Pay attention to their definition of “distributor” and “manufacturer”. On the plus side, the CalRecycle program has been in existence since 1987, so they have well established procedures. It also appears that the CalRecycle team has done their homework on the wine industry and they have anticipated issues that wineries will face. I found the YouTube video to be very helpful.
“If you are a winery outside of California, and you ship wine directly to customers through your Wine Club or Internet sales, then this program affects you too.”
REGISTERING YOUR WINERY
Watch the YouTube video first, or join the December webinar. Just know that many wineries began to register last spring, but there is still likely to be a last-minute-rush.
Go here to register your winery CalRecycle Beverage Manufacturer & Distributor Registration
The Registration Team also handles the label review process.
PAYING THE PROCESSING FEE
The Processing Fee is imposed on the mobile bottlers. They will either add this fee to their bill or ask you to pay it directly to CalRecycle. Check with your Mobile Bottler and ask how they plan to handle this. See the 1/8/24 update
The fee comes to about $55 for every 1,000 cases bottled. And it’s paid when the wine is bottled.
IMPLEMENTING THE CRV COLLECTION AND REPORTING
You are required to report and pay the CRV fee, regardless if you charge your customers and treat this as a pass-thru (like sales tax) or treat this as a new overhead expense.
By January 1st you need to decide if you will be collecting 10 cents for every bottle sold DTC or treating it as a new fee. For perspective, for every 1,000 cases of wine you sell in California, you need to pay $1,200.
At this time, none of the POS and eCommerce programs that are popular with the small wineries have a CRV function that is up and running. The alternative procedure is to create a CRV “product” and add it to every sale. Per CalRecycle, this is a taxable charge.
11/20/23 Most of the popular POS/eCommerce programs are racing to get their CRV modules working by January 1st.
At the end of every month, you will file what CalRecycle calls the “Distributor Report” to report and pay the CRV fee. This is from the Reporting and Payment Manual.
Beverage container count must include all containers sold or transferred in California including promotional items, donations, sample “giveaways” and internet sales shipped to a California address.
Only beverage containers that are sold/transferred in California must be reported.
Do not include beverage products that are still listed as your inventory.
Only beverage containers that are sold DTC and to restaurants or transferred in California plus some promotional items & samples must be reported
If your QuickBooks file is set up using our Fundamental Five system, this report will be straightforward, with a little help from your eCommerce program. And if you took our Sales Tax Mini-Course, then you already know the key concepts to calculate the container count.
Keep in mind that the regulations state that you must maintain records of all containers purchased, filled, and disposed of. If you are audited, you will be required to reconcile the containers that you purchased with the number that you reported. That means that you also need to know how many bottles were shipped out of state and shipped to distributors and wholesale accounts.
We feel this is a good reason to set up your file using our Fundamental Five system. In our system, you use QuickBooks to compile all of the sales made in your various programs. This means that you will be tracking your inventory in QuickBooks. In addition to reconciling the bank account, you will also reconcile the cased goods inventory amount. When you set up your classes to show the various sales channels, you can easily identify the re-sale sales from the DTC sales. The fifth step in our Fundamental Five system is to record all of the samples and tasting room pours. This is often a missing step in keeping the inventory accurate.
UPDATING YOUR LABELS
If you implement the CRV program effectively, the program will only cost you 10 cents for each of your samples and other non-sale depletions. However, if you bottle wines in 2024 and the labels do not have the CRV message, you will need to add a sticker to show the correct CRV redemption information. Wines bottled before January 1, 2024, are exempt from the label rule.
You have until July 1, 2025, to implement the label portion of the program.
You will save a lot of money if you can get the CRV message on all of your 2024 bottle runs.
If you need any help, check with your compliance team or call CalRecycle. They have been running this program for over 20 years, so they are familiar with the procedures.
