A proposed program that would slap a 10-cent deposit on beverage containers in Minnesota drew concerns Monday as various industries said it could potentially hurt their businesses.

During a public hearing, officials from the grocery, retail, manufacturing and recycling sectors told the Minnesota Pollution Control Agency (MPCA) they feared that deposits on cans and bottles might raise costs and possibly erode their profits.

"When you look at the return on investment, what is the added cost to retailers in terms of sales tax and cost to train? This could drive up the cost of a product," said Bruce Nustad, president of the Minnesota Retailers Association.

The hearing Monday with state officials was required by the Minnesota Legislature. Last spring, it ordered the MPCA to draft a plan showing how a deposit would increase recycling rates.

Minnesotans recycle about 40 percent of all aluminum cans compared with the national average of 65 percent. The legislature's goal for Minnesota is an 80 percent recycling rate.

Susan Collins, president of the Container Recycling Institute, told meeting attendees that she favored a deposit because a similar law in California increased recycling rates, cut litter and helped distribute waste collection costs more evenly across that state.

But officials from other recycling firms including Waste Management worried that separating out valuable aluminum and plastic materials from its trash collection program would eat into revenues.

"We urge you not to consider deposits," said Julie Ketchum, the government affairs director for Waste Management, which collects and recycles about 250,000 tons of beverage containers a year. "You are taking the most valuable materials out of the waste stream."

She noted that Minnesota already successfully recycles without the burden of a deposit-refund system. For all recycled materials, "We are already number two in the nation. Minnesota is comparable with California and Oregon."

Others at Monday's meeting said there might be too few recycling redemption centers in rural areas. Wayne Gjerde, who manages the MPCA's recycling market-development program, said one early proposal envisioned one center for every 5,000 residents.

Issues involving deposit fees, redemption center locations, material ownership and board oversight have yet to be worked out. MPCA officials will continue to collect written comments from the public over the next few months. The agency's draft proposal is due to the Legislature in January.

Gjerde noted that if the legislature does implement a statewide beverage container recycling program, the MPCA would tap a nonprofit to run it.

The MPCA already has made attempts to raise recycling rates. At this year's State Fair it featured an exhibit of 12,000 cans purchased from the Rexam Beverage Can factory in St. Paul to serve as a reminder that consumers should look for recycling containers instead of trash cans.

The agency also is sending 480 giant bottle-shaped collection containers to high schools and is sponsoring Minnesota GreenCorps to spread the word that recycled aluminum cuts energy costs and spurs jobs.