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NEWS: Nestle capitalizes on China’s polluted lakes and rivers to sell bottled water

Bloomberg reports, “Nestle SA’s water business has suffered as western consumers turn to the tap due to environmental concerns about plastic bottles. Fortunately for the Swiss company, in China environmental concerns are instead driving growth. While the tough economy and green opposition to bottles are weighing on the water business in Europe and the U.S., it’s growing fast in China where industrial and agricultural expansion have polluted supplies.”

“About 70 percent of China’s lakes and rivers have been polluted by industrial facilities such as power and chemical plants and paper and textile factories, according to the Worldwatch Institute, an environmental research group.

Availability of natural fresh water in China is just one quarter of the global average, and the north of China already faces a scarcity of water, the World Bank reports. In Shanghai, ‘almost all’ surface water has been polluted and doesn’t meet drinking standards, according to the city’s Water Authority. …Purified water from treatment plants is often contaminated again en route to homes. About half of tap suppliers provide substandard water due to deteriorating pipes harboring contaminants, sediment and bacteria, according to China’s Ministry of Housing and Urban-Rural Development.”

“Nestle Waters has opened two facilities in China since 1998, one close to Beijing that extracts spring water from a local source, and another near Shanghai that taps an aquifer. The company … also bought Yunnan Dashan Drinks Co., a natural spring water producer in the southwest of China, in 2010.”

“About half of the water Nestle sells in China is delivered in five-gallon (18.9 liter) jugs. …Nestle charges about 16 yuan ($2.57) for a five-gallon container of purified water and 18 yuan for mineral water. …In Shanghai, Nestle has opened 12 water stores where customers can phone in orders. Tucked between a pharmacy and a beauty salon, a store in the affluent Lujiazui district sells 400 to 500 containers daily. On the busy street outside, workers stack about two-dozen bottles onto electric tricycles for delivery to homes and offices.”

The article adds, “Sales of bottled water in the country will climb to $16 billion by 2017, versus $9 billion in 2012 and $1 billion in 2000, according to researcher Euromonitor International. The market in western Europe will remain flat at $21 billion and North America will increase 18 percent to $26 billion over the same period, Euromonitor predicts. …Water has shrunk as a percentage of Nestle’s revenue for four years running and accounted for 8 percent, or 6.5 billion Swiss francs ($7 billion), of its 2011 sales. …While Nestle continues to rely on developed countries for the bulk of its water business, ‘it recognizes that emerging markets are high-growth and profitable and that it has to increase its presence,’ said Richard Withagen, an analyst at SNS Securities in Amsterdam.”

The article can be read at http://www.bloomberg.com/news/2013-01-10/nestle-taps-china-water-thirst-as-west-spurns-plastic.html. A Blue Planet Project/ Council of Canadians blog ‘UPDATE: Trade deal, fracking boom further threaten the right to water in China’, go to http://canadians.org/blog/?p=18228. For various campaign blogs on Nestle, see http://canadians.org/blog/?s=nestle.