Water Bottle Industry

The bottled water industry has been extremely lucrative in Pakistan.  Bottled water consumption in Pakistan is 1.4% of the total economic cost. It accounts for 0.05% of the GDP of Pakistan. The total consumption cost of bottled water was 4.67 Billion PKR (US76.72 million dollars) in 2006. Pakistan’s bottled water market is forecasted to reach USD 451.57 million by 2025 growing at a compound annual growth rate of 10.46% during the forecast period.

The bottled water industry is growing in Pakistan, just in 2017 four new bottled water plants were opened in Karachi, this is an indicator of increasing demand. As the household per capita income is rising in Pakistan, people living in developed urban areas have a higher demand for bottled water due to the growing awareness of the lack of sanitation in tap water. In the past five years in Pakistan, per capita income has increased by 10.8% hence the people spending money on bottled water in Pakistan has increased too. Therefore, the demand for clean drinking water increased during the outbreak of Covid19 in Pakistan. This has created even more of a necessity for mineral water suppliers to be able to provide safer drinking water to consumers within Pakistan. Sanitation when it comes to the water supply is a major concern when it comes to health crises, and Pakistan already faces its fair share of issues when it comes to standards for safe drinking water.

In recent testing by the Pakistan Council for Research in Water Resources (PCRWR), seven different bottled water companies were found to be unfit for human consumption. This is emblematic of a bigger problem that the water industry faces within Pakistan. There is currently a huge issue in Pakistan when it comes to the standards of bottled water companies. This is not something that arrived with Covid19, rather this issue already existed, but has now been further heightened by the pandemic. People normally prefer consuming bottled water, as opposed to tap water if they can afford it. Safety and sanitation standards are not normally a cause for concern whilst purchasing bottled water, as they are normally considered the natural alternative to tap water, and thus are expected to come with a certain degree of safety. The closure of these bottled water providers at the outset of the pandemic shows a problem that had not been fully addressed until the arrival of Covid19.

Quality outlines a major problem that exists within the mineral water industry. This has already resulted in the shutdown of several mineral water companies. Sanitation has become a major problem and is something that is becoming more prioritized as a clean water supply becomes a necessity. The PCRWC has started to monitor the safety of these brands even more and in 2021 has shut down a further 13 water brands, for troubles related to the health and safety of these suppliers, with issues such as high Arsenic levels. Industry giants like Coca Cola and Nestle, may not be hugely affected, but there is definitely a requirement for improving water sanitation as a whole. With there being a need for access to clean bottled water, it does become a necessity for the Pakistani government as a whole to place strict rules regarding sanitation and water quality on the provincial, national and community levels. The outset of Covid19 has put focus on this issue and will be something that may the standards of the bottled water industry.

Due to the country’s poor water supply infrastructure and system, a vast percentage of the population turns to bottled water with the common conception that bottled equates to safe. Ali Bux Soomro, project director of the Conformity Assessment Centre (CAC) of the south zone of the Pakistan Standard and Quality Control Authority (PQSCA), confirms that there are hundreds of unregistered bottled water brands being sold. These brands often sell unsafe water under the guise of a blue label. The water in Sindh itself is highly contaminated, at least 77 per cent of the water in 14 districts was found to be unsafe for human consumption, according to a report submitted to Sindh High Court. This water requires careful treatment, which is expensive. This expense acts as a deterrent for illegal brands, thus they opt to sell unsafe water. Water samples collected from just public hospitals alone in Sindh were shown to have 85.2% of it contaminated, according to the PCRWR.

Another pressing issue the industry faces is the drastic depletion of water resources. The lack of policy limiting how much water can be extracted works in favour of the industry, especially for giants such as Nestle. However, the rate of depletion overcomes the rate of replenishment. In other words, water will run out if not intervened with. It is reported that Pakistan will reach absolute scarcity by 2025. Pakistan ranks fourth in annual groundwater extraction. Though this is a crisis for the entire nation, it is also a threat to the bottled water industry. Companies such as Nestle, thrive on the almost free water they extract in Sindh and in Pakistan as a whole. It is easy to imagine them packing up and leaving once we have run dry; however, this will prove to put a dent in their otherwise profitable water business. All brands in the industry need the rate of repletion to improve for them to carry on. For the industry to even exist, policies need to be enacted with utmost urgency. The government’s water policy of 2018 woes attempting to avert the crisis, and Punjab’s Water Act of 2019 has set things in motion. Unfortunately, in regards to Sindh, little progress has been made in terms of the policy.

Authors: Hamza Jafarey, Morsche Qhan, Hamza Farookhi.


References:

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(2021). PCRWR declares 13 brands of bottled water as unsafe. Islamabad: The News International.

(2020). Seven Brands of Bottled Water Declared Unsafe. Islamabad: Dawn News

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Dawn.com. (2017, July 16). SHC report finds 77pc of Sindh’s water unsafe for human consumption. Retrieved from https://www.dawn.com/news/1345508

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The Economic Impacts Of Inadequate Sanitation In Pakistan. (2008). The Economic Impacts Of Inadequate Sanitation In Pakistan. Retrieved February 13, 2021, from https://www.wsp.org/sites/wsp/files/publications/WSP-esi-pakistan.pdf.

Mordor Intelligence. (2020). Pakistan Bottled Water Market – Growth, Trends, Covid-19 Impact, And Forecasts (2021 – 2026). Pakistan Bottled Water Market – Growth, Trends, Covid-19 Impact, And Forecasts (2021 – 2026). Retrieved from https://www.mordorintelligence.com/industry-reports/pakistan-bottled-water-market.