The American Beverage Association has reacted angrily to news that the Connecticut Legislature has expanded a nickel-deposit law to include water bottles.

It is estimated that the move will give the state an additional $4m in revenue this year and $17m next year from unclaimed consumer deposits.

Sports drinks and iced teas are not included in the bill, which is expected to become law on 1 April.

The ABA said the bill had raised taxes on hardworking families by adding a fee to every bottle of water sold in the state.

"This won't lead to a significant increase in recycling. In fact, Connecticut government is betting that consumers won't recycle - to the tune of $13m a year. This is simply a money grab again placing the burden of government squarely on the backs of hardworking Connecticut families."

There are reports that the industry may be able to apply to the governor for a delay of the bill until 1 October, due to the difficulties of producing new labels by the start of April.