Why SB 54 — California’s new plastic packaging law — should be on every retailer’s radar

California' s Plastic Pollution Prevention and Packaging Producer Responsibility Act, known as SB 54, is reshaping how businesses manage packaging materials sold into the state. 

With permanent regulations now in effect and key compliance deadlines having passed, retailers can no longer afford to treat the law as a future concern. Even businesses that do not manufacture packaging or consider themselves "producers" should not assume SB 54 has no bearing on their operations. In fact, that assumption may be one of the most expensive mistakes a retailer can make.

Much of the discussion surrounding SB 54 has focused on producers, leading many retailers to believe the law applies only to manufacturers, packaging companies and consumer goods brands. In practice, however, determining whether a business has obligations under the law is rarely that simple, and the law's reach may be broader than many retailers realize.

Don't Assume You're Exempt

Retailers that sell packaged products in California must determine whether they have obligations under the law and, if not, whether they can demonstrate that conclusion to regulators. Simply deciding internally that SB 54 does not apply is not enough and exposes retailers to liability for penalties and fees under SB 54.

The first step for retailers is understanding where they fit within California's evolving extended producer responsibility framework. Depending on how products are sourced, packaged and sold, a retailer may have responsibilities that are not immediately obvious. Even companies that ultimately determine they are not covered must still seek express confirmation from the State of California that they are exempt from compliance obligations.

The cost of not going through that process or getting it wrong can be significant. California's regulators are focused on building a comprehensive system for tracking and reducing packaging waste. Businesses that fail to engage with that process will find themselves facing future penalties, enforcement actions or reporting obligations that become far more difficult and expensive to address after the fact.

The Business Risks Extend Beyond Regulators

For retailers, the risks associated with SB 54 are not limited to penalties, potential enforcement actions or reporting obligations. The law's implications can extend throughout the supply chain, creating exposure in places many businesses may not expect.

Retailers routinely certify compliance with applicable laws and regulations through supplier agreements and commercial contracts. Those certifications often occur as part of normal business operations and may not specifically mention SB 54. Nevertheless, companies that affirm compliance without first understanding their obligations could create contractual exposure in addition to regulatory risk.

A retailer that incorrectly certifies compliance could face disputes with suppliers, manufacturers or other business partners that are seeking to manage their own obligations under an increasingly complex regulatory environment. As environmental regulations become more common, businesses can expect compliance representations to receive greater scrutiny from counterparties throughout the supply chain.

Compliance Can Create a Competitive Advantage

While the risks of noncompliance are significant, focusing solely on potential penalties and enforcement misses the broader business opportunity. Viewed through a strategic lens, SB 54 gives retailers a reason to take a closer look at packaging decisions, supplier relationships and the processes that support long-term compliance.

Businesses that proactively assess their obligations often discover opportunities to reduce reporting burdens, improve packaging efficiency and increase the use of recyclable materials. Retailers can also work with suppliers to explore packaging alternatives that may lower future compliance costs and simplify reporting requirements.

Those conversations are likely to become increasingly important as similar legislation gains momentum across the country. California is not operating in isolation. Other states are have their own plastic packaging extended producer responsibility programs, and more are expected to follow. Retailers that establish internal processes today will be better positioned to navigate future requirements as the regulatory landscape expands.

Perhaps the greatest benefit of acting now is certainty and risk mitigation. Companies that understand their obligations and document their compliance position can move forward with confidence. They can respond to supplier inquiries, address regulatory questions and make operational decisions without the uncertainty that accompanies unresolved compliance risks.

By contrast, businesses that ignore or postpone the analysis will eventually find themselves scrambling to respond to enforcement actions, unexpected fees or costly disputes. SB 54 represents a broader shift in how states are approaching packaging waste and environmental accountability. Whether a retailer ultimately falls within the law's scope or not, the time for waiting on the sidelines has passed.

Retailers do not need to have every answer immediately. They do, however, need to ask the right questions now.

The cost of determining whether SB 54 applies is almost always lower than the cost of discovering too late that it did.