Many countries have inadequate public water supplies. Bottled water is often a real lifeline.
It is difficult to believe, therefore, that any country in the world already imposes a 45% tax on bottled water:
• 10% excise duty on local production or imported plastic
• 17.5% ex-factory price tax
• 17.5% value added tax.
It is even more astonishing to discover that this country is now considering extra taxation on bottled water.
Which country ? Ghana. Surely, a tax too far.
Water shortages are more urgent than climate change, according to Nestlé Chairman Peter Brabeck, who has been leading the debate about water access and pricing for a number of years.
I’ve finally read a two page feature in the Financial Times on 15th July that contains many worthwhile findings and comments:
• Global water use has more than doubled since 1960, from 1,968 km3 then to 4,431 km3 in 2010.
• Industry has committed $84 billion in the past 3 years to improve water management and conservation.
• Water supply has become one of the top three concerns for business and other leaders in the World Economic Forum’s annual global risk survey.
• Coca-Cola is the 24th biggest industrial consumer of water and Nestlé 49th. Power generator China Guodian is the largest.
• Water is needed for energy production to such an extent that fracking “typically requires about 2 million gallons of water or more at each well.”
• The 2030 Water Resources Group, which includes Coca-Cola, Nestlé and the World Bank, calculates that freshwater demand will outstrip supply by 40 per cent in 2030 unless more is done.
• “Solutions … are known and do not need to be that expensive … Plugging leaks at an existing water supply system, for example, can address water scarcity 50 to 100 times more cost effectively than building an expensive water treatment plant.”
August saw 3 food and drink transactions worth over $1,000 million out of 33 recorded on the bevblog.net database for the month.
The top 3 were:
• $3,150 million for the proposed private equity purchase of Australia’s Treasury Wine Estates by Rhone and Kohlberg Kravis Roberts
• $2,150 million for Coca-Cola’s 16.7% stake in Monster alongside various mutual brand transfers
• $1,430 million for Oak Hill private equity to buy Berlin Packaging in the United States.
Among the 33, 7 were in packaging, 5 in alcohol, 4 in soft drinks, 3 in dairy and 2 in hot drinks.
17 involved the United States, 10 solely within its borders. Of the 21 other countries featured, the United Kingdom participated in 5, Canada and India in 3 then Australia, Brazil, China, France and Switzerland in 2 each.
Yogurt is really big in Tibet, where my trip last week coincided with the annual Yogurt Festival, which is reportedly bigger than New Year. It lasts a full week of public holidays.
Tibet’s capital Lhasa was festooned with colourful decorations. Its largest park was turned over to non-stop music performances and family picnics.
The festivities date back more than 900 years and developed when people brought yogurt as a gift to monks ending their summer meditation retreat.
I greatly enjoyed my brief time chairing the Yogurt Council in Britain and would be delighted if the UK industry could also achieve such public enthusiasm.
Three hours from Tibet’s capital Lhasa, at the edge of a national park, my hosts last week took me to the Tibet 5100 plant, where the natural mineral water flows directly from its source at 5,100 metres.
Here was a company that is already winning sales nationally in China and could soon make its way onto international markets.
It uses the best European equipment for 3 PET lines and 1 glass line. It has adopted full HACCP and ISO disciplines. It is the area’s largest employer with over 180 staff.
It may be remote, but it may not remain unknown.
I’ve just returned from an amazing trip to Tibet, where I visited three of China’s many new beverage innovators.
What makes them of significance is that they are investing in the best equipment and the best quality. One day some of them will become world contenders.
The three I visited were:
• Zhuoma Spring, a new bottled water business with a supply contract for all of Sinopec’s thousands of petrol stations and its own design of water dispenser with a 12 litre bottle that collapses under vacuum as it empties.
• Green Barley Beer, a new brewing operation for Tibet’s leading beer brand in the best presented industrial estate I’ve ever seen.
• Tibet 5100, which bottles a premium water from the world’s highest source and is distributed to all passengers on China’s bullet trains.
When Glaceau was bought by Coca-Cola for $4,100 million in 2007, audited retail sales were reported at $355 million.
For the 52 weeks to early June 2014, Sparkling Ice audited retail sales were $349 million, up an effervescent 72.1%.
Interesting comparison. I wonder where it may lead.
Further evidence that bottled water is competing with other beverages more than with tap water.
“Over the past decade, American consumers have increasingly turned to bottled water as a substitute for carbonated soft drinks.”
This was the conclusion of the Simmons National Consumer Survey of 25,000 adults in 2004 and 2013 as reported in Beverage Digest on 24th July.
The number of US adults drinking five or more glasses in the last seven days was +22.4% for still bottled water in contrast to -20.2% for regular colas, -17.1% for diet cola, -14.5% for other diet carbonates and -6.9% for other regular carbonates.