If D.C. voters approve a ballot initiative Nov. 3 to place a deposit on beer and soft drink containers, the District industry that concerns itself with recycling used bottles, cans and newspapers will collapse.

So claims a radio advertisement being aired in the Washington area by a coalition of retailers, beverage makers and container manufacturers trying to defeat Initiative 28, the so-called bottle bill.

The response to the coalition's claim from city officials and others familiar with recycling in the District was almost unanimous this week:

What recycling industry?

"You have to ask yourself, what is recycling in the District?" said Jim McCarthy of the Dupont Circle Neighborhood Ecology Corp., one of two groups in the city actively involved in recycling waste products. "They {opponents of Initiative 28} have been telling people for the last six months that recycling is a growing industry in D.C. It's not."

According to McCarthy and others, the little recycling that does take place in the city is almost entirely attributable to nonprofit volunteer groups whose efforts would be unaffected if Initiative 28 were approved.

"What we have now is primarily a network of community groups and businesses," said Ken Laden, chief of waste management policy at the D.C. Department of Public Works. Recycling "is just at its initial stages," Laden said. "There hasn't been a whole lot of attention paid to it."

The recycling ad is one of at least four commercials being run on local radio and television stations as part of an industry effort to defeat Initiative 28 that so far has cost more than $1.1 million and could become the most expensive campaign ever mounted in the District.

If the initiative is approved, a deposit of at least 5 cents will be required on beverage containers.

Heading the list of sponsors of the ads are such industry giants as Coca-Cola Co., Pepsi-Cola Co., Anheuser-Busch Co. Inc., Miller Brewing Co. and trade groups representing manufacturers of bottles and cans.

Organized here under the name Clean Capital City Committee, the corporate interests contend that deposits on glass, aluminum and plastic beverage containers would lead to several ills, including higher beverage prices, loss of business at District stores, pest infestations and hardships for the poor and elderly.

The recycling ad states: "If Initiative 28 passes, D.C.'s recycling industry will shut down. That means more waste to dispose of and higher taxes."

Opponents of the initiative contend that if consumers take their bottles and cans back to grocery stores to collect their deposits, those items will not go to independent recycling centers that need revenue from glass and aluminum to survive.

But Laden said such recycling centers hardly exist in the District. One that did open this year, under the supervision of D.C. Council member Nadine P. Winter (D-Ward 6), closed last week after protests from neighbors in the 1300 block of Maryland Avenue NE, who complained about the noise and smell associated with piles of bottles and cans.

Laden said the two groups responsible for most recycling in the District are the Dupont Circle group and the Capitol Hill Recycling Project. Neither group accepts glass, one of the materials most involved in the Initiative 28 debate.

The Dupont Circle group, founded about 15 years ago, accepts newspapers and aluminum cans on weekends in bins donated by a local trash hauler. McCarthy, an advocate of the bottle initiative, said the group raises between $2,000 and $3,000 a year recycling the materials and donates the money to charities that help the homeless.

Esther Morrison, founder of the Capitol Hill project, said that group usually collects about 30,000 pounds of newspapers during monthly collections at a site in Southeast.

Morrison, who also said she supports the bottle initiative, said the project after five years of operation raised $1,000 that was donated to a boys' and girls' club in Southeast in 1985. But she said proceeds from recycling since then have been little more than enough to pay the three teen-agers the group hires to help load the newspapers into a tractor-trailer.

Backers of the deposit measure contend that the industry argument on recycling is designed to shift responsibility for empty beverage containers and the litter they produce from the corporations that profit from beverage sales to the public.

For years, many of the companies fighting Initiative 28 have promoted voluntary antilitter campaigns nationally, urging community cleanup efforts and recycling programs while fighting proposals for mandatory deposits.

One member of the industry group, the Glass Packaging Institute -- a $156,900 contributor to the antideposit campaign -- also has funded a glass collection program through several city churches, offering a $12,000 scholarship fund to be divided among churches that collect the most bottles.

Ed Arnold, a spokesman for Clean Capital, denies critics' charges that the "pilot" church program, scheduled to run through next July, was set up only in response to the deposit initiative. "We started this well before the initiative went on the ballot," Arnold said.

The Rev. Ernest Gibson, president of the Council of Churches of Greater Washington, said Arnold first approached him about forming the recycling program early this year, after the industry group had organized to fight Initiative 28. Advocates of the initiative at that time were collecting signatures to place it on the ballot. But Gibson said he was unaware then of the deposit issue.

"When we started a glass recycling program, I didn't even know there was an Initiative 28," Gibson said. "That wasn't even something I was fighting against then."

Gibson said the recycling program has made a marked improvement in litter around his church, First Rising Mount Zion Baptist Church at 1240 Sixth St. NW.