Industry gearing up to implement California’s AB 2398

Home News Industry gearing up to implement California’s AB 2398

Last fall, the state of California passed the Carpet Product Stewardship Act, otherwise known as AB 2398 and, since then, the industry has been scrambling to make sure everyone in the selling chain is up to speed on what the bill means and how it will affect them once it goes into full effect on July 1.

In a nutshell, the purpose of AB 2398 is to keep carpet sold in California from going to the landfill while at the same time encouraging the recycling of post-consumer carpet either back into new carpet or as a secondary product, such as the plastic molds used in automobile engines.

To accomplish this, a 5-cent stewardship fee will be placed on every square yard of carpet sold in the state. This is an after-tax fee required by law to be visible on all invoices for carpet sold in California.

The reason AB 2398 affects just about every carpet mill in the industry is the 5-cent fee has to be collected for any carpet sold in the state, regardless of whether the product was produced in California or shipped in by a manufacturer, wholesaler or retailer, including those who do business solely on the Internet.

While the state is known to be the bell weather for environmentalism across the country, a key reason for the passage of the bill is the estimation that California, which has the 8th largest economy in the world, accounts for approximately 10% of all carpet sold in the U.S.

In addition, shortly before the bill was signed into law The Modesto Bee wrote AB 2398 could annually divert 1.3 million tons of waste in the form of old carpet from California’s landfills, which represents approximately 3% of what consumers dump into landfills each year.

The industry’s Carpet America Recovery Effort (CARE) has been designated as the industry stewardship organization charged with implementing AB 2398’s goals. There is a provision allowing mills to deal directly with it if they desire but its looks like the industry is deferring to the non-profit organization.

That does not mean the mills are sitting idly waiting for July 1 to come. In fact, all the manufacturers surveyed by FCNews said they have been holding numerous in-house training seminars and Webinars to get their California sales forces and managers up to speed as well as making sure all their internal mechanisms are in place to ensure they are ready. Most of these were expected to be complete as the paper was going to press.

Susan Rich, director of corporate communications for Shaw Industries, said the company held two Webinars last month for its California sales reps and on March 10 it sponsored a session for key customers at its Cypress, Calif., facility.

“Additionally,” she said, “we are an active participant on the CARE communication committee that will be communicating directly with customers through email campaigns, trade ads, Webinars, and other PR/media outreach.”

Patricia Flavin, senior vice president of marketing for Beaulieu of America, noted, in addition to the internal training sessions, “materials are being provided to distribute to the retailers and dealers.”

In fact, she added, nearly all the carpet mills “will be providing material for the education of retailers, dealers and consumers. The focus of this material is to let everyone know what the assessment is for and how it will be used to increase the recycling and diversion of carpet from landfills, increase recyclability of carpets, and market growth of secondary products made from recycled carpet.”

Kim Matsoukas, sustainability manager at Bentley Prince Street, said along with making sure its California sales representatives are “fully informed about the law, as they have the biggest impact with our customers,” the mill has “written a few blogs and posted videos about the law. We will continue to do this as well as add information about AB 2398 to the carpet recycling section of our website.”

Likewise, David Duncan, Mohawk Industries’ vice president of marketing, said the company has “worked with territory managers to educate them and to make sure they have the tools to share information on the law with our California retailers. We have gotten inquiries [from retailers], and we’ve worked with them to answer their questions about the new law.”

Retailers’ time

Having only three-and-a-half months to go before AB 2398 takes effect, the industry is now turning its attention to California’s retailers and distributors.

Georgina Sikorski, CARE’s executive director, said the organization estimates there are about 3,000 wholesalers and retailers in the state. “Our goal is to reach every one of them and ensure they are prepared to implement the invoicing of the California Carpet Stewardship Assessment required by AB 2398. The Assessment must be on all invoices on July 1.”

To get things started, CARE is holding a free Webinar on March 22 at 11 a.m. PST geared specifically for the state’s dealers and distributors.

Sikorski said the session will include an overview of AB 2398 and the legal requirements that pertain to the retailer; important information for the dealer on how to be in compliance; when and how to invoice the California Carpet Stewardship Assessment, and resources available for more information.

At this point, she added, the organization has not received too many inquiries from retailers about the law but “we expect more calls after the Webinar.”

Following the Webinar, Sikorski explained CARE will be preparing additional educational and communications materials for retailers, including signage/store placards and informational flyers for consumers, which will be available at stores before July 1. “We are also placing articles in publications that reach this and other audience segments. And we plan to have information/ placards available at retailer shows, along with making a presentation at a dealer conference.”

She praised the mills for the work they have been doing, such as posting this information on their web sites, educating their salespeople and “speaking to their retailer customers and encouraging them to attend the Webinar.”

Consumer impact

The work being done is to ensure the industry complies with the law; it is not so much about how it will impact sales as most do not think it will, especially since most consumers will not know about it until they are making a purchase.

Plus, as Mohawk’s Duncan said, “it’s not an unprecedented law—consumers have known for years that when they buy tires, there’s a small charge that goes to disposal or recycling.”

Beaulieu’s Flavin added, at a public forum hosted by CalRecycle in Sacramento last month “there were no questions from the general public.” At $.05 per square yard, “the impact on sales should be minimal,” she explained. “Depending on purchase price, this will generally be from .5% to 1% of the cost—or less. Think of it this way, on a purchase of 200 square yards, a consumer would pay an additional $10.”

Bentley’s Matsoukas pointed out “we still need to reach the A&D community and big end users to educate them. [But] we believe the impact will be nonexistent or very minimal as the fee is a very small percentage of the cost of installing carpet.”

Having it as a separate item on the invoice, she added, “is a positive because it raises awareness around carpet recycling, just as disposal fees for products like tires and motor oil have brought awareness around their disposal impacts.”

In the end, Matsoukas said the mill sees AB 2398 as “a great tool for talking about carpet recycling and how important it is in California.”

For more, visit carpetrecovery.org/AB2398.php, which provides a link for the Webinar.

-Matthew Spieler

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