Executives in the grocery and beverage industries, who have helped raise nearly $2 million to defeat a D.C. bottle deposit initiative on the ballot next Tuesday, say the money is well spent because Initiative 28 would be a financial disaster for their businesses.

The measure, which would add 5 cents to 20 cents to the cost of every bottle and can of soft drinks and beer purchased in the District, would also cause confusion and unsanitary conditions at many city stores and prompt a disappearance of some brands of beverages from store shelves, industry officials said.

From the biggest grocery chain to the smallest mom-and-pop store, most D.C. retailers are dead set against the initiative.

"There's going to be hell to pay," said Paul Cooper, owner of Skyland Liquor, a large store on Naylor Road SE. Cooper said that if the initiative passes, he would increase his staff of seven and transform part of a back warehouse, now used to store beer, into a dump for dirty bottles. "In winter, the rodents come in there in droves, as much as we spend on control. This would make it much worse," he said.

Meanwhile, the environmentalists behind the initiative say that D.C. store owners are being panicked by scare stories about rats, roaches and inconvenience spread by big business interests such as beverage distributors.

"Small retailers are getting filled with propaganda left and right," said Jonathan Puth, director of the Bottle Bill Initiative Campaign. In the nine states where bottle deposit measures have been approved, merchants "totally change their tune" and learn to live with the new law, Puth said.

But, according to some, that has not been the case in New York City, where a 1982 state law requires grocery and liquor stores to pay people a nickel for each empty can or bottle brought to the store.

"Absolute disaster," said Mary Moore, spokeswoman for the D'Agostino chain, which owns 19 food markets in Manhattan and Brooklyn. "It's a real mess."

Moore said that in New York, many homeless people rely on returning bottles and cans for their income. Carrying bags of empty bottles, they stand in the front of already crowded stores, waiting for service from checkout employes.

"The homeless are not pleasant to have in your store," Moore said. "A market is under so much surveillance by health and agriculture inspectors, and then they legislate people bringing garbage into your store."

Organizers of Initiative 28, for their part, say New York is not typical, and play up rural states such as Vermont and Maine, where grocers have lived with bottle deposit laws for years, with only minor irritation.

Most people on both sides of the dispute agree that so-called forced deposit laws create more difficulties in big cities such as New York City than in small towns.

Cramped city markets with small storage areas and parking lots -- or none at all -- have difficulty storing empties, while most suburban stores at least have large parking lots and more spacious shopping areas.

Industry executives say that if Initiative 28 passes, the District would experience the kinds of problems found in New York City -- including a subculture of street people and youngsters picking through garbage for profit. Industry representatives said those problems would be added to difficulties encountered in every state with such bottle deposit laws: inconvenience for consumers of beer and soft drinks, and higher prices.

Barry Scher, spokesman for Giant Food Inc., agreed that there would be inconvenience even in larger stores. Scher said Giant learned this lesson between 1978 and 1980, when Fairfax and Loudoun counties were enforcing similar bottle measures that finally were overturned by the state Supreme Court.

The measure cost Giant's 23 stores then operating in Fairfax more than $700 a week per store in labor costs and other expenses, including doubled pesticide applications in empty bottle storage areas, he said.

Initiative 28 states that a store is not required to accept dirty cans and bottles. But other states have had similar provisions and yet had sanitation problems in stores, Scher said. Industry officials said D.C. store managers will end up accepting dirty containers anyway because they won't want to turn away customers.

Jay Lee, owner of the tiny Congress Market on East Capitol Street, agreed. "I think the small store will have a big problem," he said, because it has no space for storage. He added that hundreds of owners of small stores in D.C. feel the same way.

"This would create a real problem for me because I don't have enough space here," said Robert Royce, owner of the Dumbarton Pharmacy on Dumbarton Street in Georgetown, a small 700-square-foot store that has no storage room. Royce, who contributed $25 to the industry's Clean Capital City Committee, said he probably would stop selling Coca-Cola if the initiative passes.

While most stores would continue to carry Coke and popular brands of beer, the danger is that some would stop carrying less popular brands, industry officials said. The reason is that under the law, store operators would have to sort empty bottles and cans according to brand so the distributors -- truck drivers making deliveries -- could pick up only their empty containers.

Michael Minning, president of the D.C.-based American Potomac Distributing Co., which distributes such brands as Rolling Rock and Moosehead beer, Guinness Stout and Bass ale, said he fears many stores would stop carrying them if the measure passes. He guessed that a store now carrying 20 brands of beer might carry only 10, and a store selling three brands might go to one.

Sanitation is also a problem for distributors such as he, he said, because he would have to store dirty bottles in the same warehouse with his beverages.

"The consumers aren't going to clean them, the stores don't have the facilities for it, and I'm not going to go into the trash-cleaning business," Minning said.

Unhappy about picking up empties, beer and soda distributors in New York and elsewhere sometimes take weeks to pick them up, grocery officials said. Moore said the D'Agostino chain rents a South Bronx warehouse for the overflow.

Bill proponents said that these difficulties would disappear in time, and that the measure would spur jobs in recycling and related industries. But business owners scoff at that idea.

"I have a very serious doubt we'd survive," Minning said of his business, which employs about 50 people at 6207 Blair Rd. NW. "It's an operational nightmare."