Select Committee on Environment, Transport and Regional Affairs Memoranda

Memorandum by The British Soft Drinks Association Ltd (BSDA) (DWB 14)


  1.  The British Soft Drinks Association (BSDA) represents the spectrum of soft drinks manufacturers in the UK, including manufacturers and distributors of Natural Mineral Waters, Spring Waters and other Bottled Drinking Waters. The UK bottled water industry produces approximately 900 million litres of the 1,200 million litres of bottled water consumed annually, the remainder being imported predominantly from France.

  2.  In addition, the use of Natural Mineral Water and Spring Water as an ingredient in soft drinks is growing rapidly.

  3.  BSDA Members fully support policies and measures necessary to protect the environment and sustain natural resources. However, the application of a time-limit to abstraction licences awarded to companies bottling water and/or using Natural Mineral Water or Spring Water as a named ingredient in soft drinks will threaten the viability of these businesses and cost British jobs, with no obvious environmental benefit. BSDA strongly urges the Committee to recommend that time limited licences should not apply to bottled water companies.


  4.  Bottled water is a fast-growing sector: the UK market for bottled water is now worth more than £500 million per year, growing at an annual rate of more than 10 per cent. Consumption has more than doubled in six years and this rate of growth is expected to continue into the future as the consumption of bottled water in the UK is well below the EU average.

  5.  The market is very competitive, with a very strong presence (26 per cent) from imported brands. At present, the best-selling and best-known brands in the UK are French.

  The largest companies in Europe are all continental and are also investing in the future of the UK bottled water industry British companies are growing but are not yet as large and will need time and investment to be able to build up in order to match them. Banks and other investors will not invest in bottled water companies whose businesses might be arbitrarily curtailed by the loss of their abstraction licences. This means that the UK industry will be unable to expand to meet consumer demand and imported products will take an even larger share. This is a loss for jobs, the UK economy and consumer choice.


  6.  If domestic capacity for bottled water cannot increase, the rising demand will be ceded to imports from France and elsewhere. Jobs in England and Wales could be put at risk as foreign companies do not face such restrictions. This is at odds with the Government's professed desire for "effective competition in the water industry".

  7.  Moreover, due to the source of their raw material, Water Bottlers are located in rural areas, providing much needed employment and economic activity. The likely result is diametrically opposed to the statement in the Bill that "the abstraction system should contribute to sustainable development ... helping the economy to improve".


  8.  Bottled water is not only supplied through retail and on-trade outlets but is also relied upon as a strategic resource. Many mains water companies rely on back-up supplies of bottled water—through contracts with specialist water bottlers—to help them meet their public service obligations in the event of a disruption to the mains supply. Each year there are many incidents of mains contamination due to floods, freezes, drought, chemical spillage, etc. which lead people to resort to bottled water. One member of BSDA was called upon three times last year to provide emergency supplies. Maintaining a viable and adequate domestic bottled water industry, therefore, is an essential part of an overall public health strategy.

  9.  All Bottled Water members of BSDA who have been contacted have arrangements or contracts to supply bottled water to water companies, local authorities, hospitals, etc in the event of contamination or disruption of the mains supply.


  10.  At present, the industry bottles about 900 million litres of water per year. This is roughly equal to the leakage from the mains system in eight hours, so cutting back water bottling would have no appreciable effect on the overall rate of water usage.

  11.  Furthermore, water bottling is a highly efficient use of water and cannot become more efficient. If demand for water exceeds supply in a particular location, other industrial users of water can institute measures to become more efficient, or to use water from another location. Water is bottled as it is sold: the industry cannot use less water to meet the same demand.

  12.  The restriction of a Bottled Water producer's licence, for example by time limiting, could have a serious impact upon his business, an impact out of all proportion with any environmental benefit gained.


  13.  Finally, Natural Mineral Water and Spring Water companies are unique in being linked to specific sources of water. Natural Mineral Water must come from a registered, named, protected location—it cannot simply substitute its supply. Therefore restricting the bottling of water would have a far more profound impact on businesses than would restricting other industrial uses of water.


  14.  In view of the serious damage which is likely to be inflicted on the Bottled Water Industry and its implications for rural employment, for very little or no benefit to the Environment, BSDA propose that water bottlers should be exempted from the time limiting of abstraction licences.

January 2001

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