David Sygall
March 3, 2013
The Age
It’s a battle over billions, but both sides agree plastic bottle sales are falling, writes David Sygall.
Bottled water producers are facing increasing pressure as the product falls from favour among the industry’s most loyal buyers.
Figures provided to Fairfax by Roy Morgan Research show that in the 12 months to September last year 30 per cent of 25- to 34-year-olds said they drank bottled water, compared with 36 per cent in 2007. In the 14 to 25 age group, 33 per cent drank bottled water compared with 35 per cent in 2007.
The industry’s opponents believe the numbers show a tipping point has been reached, and bottled water sales will fall as people learn more about a product that is, according to Clean Up Australia chief Ian Kiernan, ”a bloody disgrace”.
The Australasian Bottled Water Institute claims volume growth is expected to be between 7 and 8 per cent this year, but concedes there has been a marked drop in the number of young people buying the product.
”We think it’s due to a number of reasons,” says the institute’s chief executive, Geoff Parker. ”Maturity of the category is part of it, the anti-bottled water detractors are good in their messaging, and other categories within health and wellness, such as iced teas, are doing very well.”
The fall among younger people is heartening for those who see bottled water’s success over more than a decade as built on scare campaigning and environmental damage. There has been a long battle between industry representatives and opponents.
The central argument of proponents is that people are entitled to free choice and bottled water is a good option compared with sugary soft drinks. They claim to support increased water consumption from the tap, bubbler or bottle.
Opponents say the industry is pushing a product that makes huge profits from a precious natural resource, has no dietary benefit compared with tap water and produces large amounts of waste.
”It’s really encouraging to see such a drop in consumption of bottled water among young people, because as they grow up, the overall market is definitely going to decline further,” says Jon Dee, the managing director of activist group Do Something!
”Once you stop the habit at a young ages, it carries through. We’ve finally reached the tipping point.”
Dee says the reason the volume of bottled water sales still grew, despite fewer people buying it, was that the companies were doing ”two-for-one promotions” as the product was so cheap to make.
By way of illustration, the NSW Office of Water says the cost of applying for water supply works approval ranges from $2257 to $5889. If approval is granted, a company pays the annual charges set by the Independent Pricing and Regulatory Tribunal. The tribunal says the cost of water extraction is about $5.50 to $6.50 per megalitre – one million litres.
Sally Loane, director of media and public affairs at Coca-Cola Amatil – which sells about half of Australia’s bottled water – says the company buys water at prices set by licence holders. It then sells the bottled product to retailers at wholesale prices, and the retailers determine the cost to consumers.
”There are massive costs involved in setting up the bores, then monitoring them, making sure everything’s sustainable, the ongoing hydro-geological tests … There are very big costs involved,” Loane says, adding that the company has invested heavily in producing light plastic bottles. Loane says the product’s retail price ”comes down to what people are willing to pay”.
”If people didn’t want bottled water, the industry would go broke,” she says. ”The fact is it’s demand-driven and people want it.”
But Dee describes the supply price as ”a scam”.
”You look at petrol – it goes through a massive production line to get to the point where it can be used,” he says. ”Yet bottled water is twice the price. It’s a huge con.”
Mineral or spring water is sourced from groundwater reserves. Bottled water may also come from treated municipal water or rain. The final product must comply with the Australian Food Standards Code.
”People think they’re just using the water that comes out of the spring,” Dee says. ”But the quality of spring water much of the time isn’t that great. It has to be filtered, just like tap water.”
Tap water contains fluoride. Jason Armfield, a senior research fellow at the Australian Research Centre for Population Oral Health, says the association is investigating the links between bottled water and the increasing rates of childhood tooth decay.
”There’s a general perception that drinking bottled water is good for you,” Armfield says. ”Compared to drinking soft drinks, it is. But it’s not healthier than drinking fluoridated tap water. There’s been an increase in the number of children suffering dental decay, and bottled water may be one of the contributing factors.”
A more easily measurable impact is waste. Kiernan says more than 12 per cent of all rubbish collected on Clean Up Australia Day last year was soft drink and water bottles.
”These bottles last 450 years or more,” he says. ”They break up into smaller pieces … It gets ingested into the food chain, which then gets ingested by us all, with toxic effect. It’s sinister.”
Kiernan says ”brilliant marketing” is behind bottled water’s success, despite the fact it comes in a petro-chemical container and is much more expensive than petrol.
”Meanwhile, the cost of what comes out of the tap – which is the best quality water you can get – is two cents a litre,” Kiernan says.
”How mad are we? Most of these water bottle companies are multinationals – Coca-Cola, Schweppes … and what they’re doing is stealing our aquifer water. It’s ours, not theirs. They’re stealing it and then selling it to us in plastic containers. It’s a bloody disgrace.”
Loane says Coca-Cola Amatil’s move towards lightweight plastic containers is a reaction to consumer sentiment. It is hoped smaller producers will follow suit.
But Jeff Angel, executive director of the Total Environment Centre, says there’s a lot of ground to make up. ”The recycling of plastic bottles is down into the low 30s,” Angel says. ”One of the reasons is that a lot of plastic bottle drinks are consumed away from home.
”But people are starting to realise this is one of the dumbest consumer products ever to appear. You can’t get Coca-Cola out of your tap at home. You can get water. Yet people still want to buy it. It’s consumerism gone mad.”
Angel suggests a reason for the drop in consumption could be that people are getting used to filling water containers at taps and carrying them. And councils are starting to install more bubblers, for example at Manly and Bondi beaches. ”The damage to the environment from plastic bottles is so serious – the CSIRO estimates up to 50 per cent of marine plastic pollution is from beverage containers – we have to set up systems that massively reduce the number of plastic bottles left in the environment,” he says.
But Parker suggests the environmental concerns on the subject are overblown. He says bottled water has ”the lowest environmental footprint of any commercial beverage”.
”Over the past decade the industry has made significant progress with lightweighting, which is about using less plastic to make the bottle,” Parker says.
”Some of those 600ml bottles now are hovering around the 10 or 11 grams of plastic, which is pretty light. People talk about landfill, but the whole bottle is recyclable. All people need to do is put it in the right bin and the recycling takes care of itself.”
Parker says the bottled water industry uses 650 million litres of underground water a year, just 0.001 per cent of Australia’s national supply, ”a pretty small drop in the proverbial bucket”.
Tap water is the best option for consumers, Parker admits, but bottled water is not in competition with tap water.
”Bottled water competes with the beverages it sits next to on a supermarket shelf or petrol station fridge, not water from a tap.
”As an industry, we’re all for people drinking more water from whatever source – be it from the bottle, the tap or bubblers,” Parker says.
”A nation that ranks fourth in the OECD for obesity should be drinking more water. But we’re not for promoting one particular source of water to the detriment of another.
”We’re not for things like the sleepy little hollow that’s Bundanoon a few years ago implementing an unofficial ban on bottled water. We’re against those draconian measures. If Manly wants to put in more bubblers, fantastic. But let all the shop owners there and the visitors to Manly have a free choice over what type of water they want to consume. It’s about free choice.”
Bottled water
1. Water is extracted from the spring.
2. It is trucked to a bottling plant.
3. The water is filtered and purified.
4. It is bottled in containers made from plastic, much of it imported from Asia.
5. Bottles are packed for shipment to warehouses, then shops, where they are refrigerated.
6. A little over one-third of the bottles are recycled. Others end up in landfill.
Sources: Do Something! The Pacific Institute.
Subscribe to our free mailing list and always be the first to receive the latest news and updates.