Bottled Life: Nestle's Business With Water

Story from Bottled Life by Res Gehriger

Nestle CEO Peter Brabeck-Letmathe

The Story-The Truth About nestles

While the world's population continues to grow at an alarming rate, water is becoming an increasingly scarce commodity. The Swiss film "Bottled Life" documents the booming business with bottled water, by focusing on the global leader in this lucrative multi-billion dollar market – namely, the Nestlé corporation in Switzerland. Nestlé currently controls more than 70 of the world's bottled water brands, among them Perrier, San Pellegrino and Vittel.

Nestlé's annual sales of bottled water alone total some CHF 10 billion. And yet the company prefers not to discuss its water business – as Swiss journalist Res Gehriger discovered when researching this documentary film. The Nestlé management refused to give any interviews or assistance or to provide information. But Gehriger persisted, and discovered just how controversial and conflict-laden the company's international operations are.

Res Gehriger Writer

Water war in the USA

To be able to sell and make money from water, you first have to own it. In the case of Nestlé this applies to many parts of the United States, by far the biggest market for its booming bottled water business. Whoever owns land or has acquired leasing rights is permitted to pump as much water as he likes. In the rural state of Maine, Nestlé has purchased many such water rights and resources. Every year the company pumps out millions of cubic metres of water, for transportation in road tankers to huge bottling factories. In the small towns of Fryeburg, Newfield and Shapleigh, journalist Res Gehriger witnessed how Nestlé tries to stifle and suppress local opposition to its operations with an army of powerful PR consultants, lawyers and lobbyists.

Nestlé's expansion strategy

"Bottled Life" focuses a critical spotlight on Nestlé's global expansion strategy in the business of bottled water. In the United States and Europe, the company sells mainly spring water with a designation of origin. In developing countries, however, the corporation pursues another concept – namely Nestlé Pure Life. This product is purified groundwater, enriched with a Nestlé mixture of minerals. Nestlé Pure Life was the brainchild of Peter Brabeck, a Nestlé man almost all his life, a former CEO and currently Chairman of the Board. Today Nestlé Pure Life is the world's top-selling brand of bottled water.

Test market Pakistan

Res Gehriger's research took him to Pakistan, Nestlé's test market for its Pure Life product. The company refused him access to its production plant in Pakistan – but Gehriger did get to see something of life outside the factory fence. In the nearby village groundwater levels have fallen dramatically, and the village fountain water is nothing more than foul-smelling sludge.

Nestlé Pure Life is a clever business concept. And particularly so in the developing world. In countries such as Pakistan where the public water supply has failed or is close to collapse, the company proudly presents its bottled water as a safe health-enhancing alternative. But for the overwhelming majority of consumers, it is an expensive out-of-reach alternative. In Lagos, for example, the mega metropolis of Nigeria/Africa with its population of millions, water always comes at a price. The scenario of a city in which everyone has to pay for life-giving water, is already a sad reality in Lagos. Families eking out an existence in the slums spend half their meagre budget on canisters of water. The upper class?  They purchase Nestlé Pure Life.

Bottled Life documentary directed by Urs Schnell 2012.  Writern by Res Gehringer

Whitewashing the water business

Nestlé places great priority on promoting its image. And when it comes to water, it's Peter Brabeck in particular who does the promoting. As CEO – and even more so after becoming Chairman of the Board in 2005 – he developed a communications strategy which operates under such noble pretences as "Corporate Social Responsibility" and "Creating Shared Value." A preached philosophy – but a practised one?

In researching this film, journalist Res Gehriger comes to a sad and sobering conclusion. It is that of a company intent on amassing resource rights worldwide. With the aim of dominating the global water market of the future.

Nestle CEO Peter Brabeck-Letmathe Water is a human right  Company video

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Nestle CEO Peter Brabeck-Letmathe Water is Not A Human Right - English Subtitles

Gardai Raid Two Homes in Letterkenny, Co Donegal Allege Theft of Irish Water property

The Polestar Letterkenny

DonegalDaily online newspaper reported that Gardai raided two homes in Letterkenny as part of an investigation into the alleged theft of Irish Water property.  The searches took place on Friday morning April 3.  DonegalDaily said " it is understood that property was recovered but no arrests were made."  According to the article Garda Superintendent David Kelly responded to claims by Councillor Michael Mac Giolla Easbuig by saying that "this matter is currently under investigation and as this investigation is ongoing, we cannot make any further comment at this stage"

Micheal Cholm Mac Giolla Easbuig,  Donegal Can't Pay Won't Pay spokesperson,  has strongly condemned Gardai raids on the homes of anti-water meter activists as an unacceptable escalation of political policing.  "The only thing these activists are guilty of, is standing up for their communities by helping them to resist unwanted and unnecessary water meters. They have stood with people day after day throughout the winter months in all sorts of weather helping them to assert their rights not to have a meter imposed against their wishes.  Where are the Garda raids on the homes of swindling bankers? Why no arrests of bribing builders who piled their fortunes high and walked away from half-finished developments? And why no dawn raids on corrupt and thieving politicians who facilitated this whole sorry mess? It is because we are being subjected to an unacceptable escalation in political policing with only those who are trying to stop the imposition of bailout taxes like water charges being subjected to dawn raids, arrests and imprisonment."

From The Journal.ie a news website
Councillor Micheal Cholm Mac Giolla Easbuig, who has been speaking with the two householders, said people involved in the protest movement were “very frightened” in the wake of the raids, which happened between 9am and 10am on Good Friday.  The councillor said “worthless” pieces of scrap plastic left on a path by contractors had been taken by a group of protesters. The plastic casings – which he maintained were “broken, dirty and old” – would have been replaced with new material during the installation process, he said.  However, Mac Giolla Easbuig said the material was disposed of by the activists and maintained none was found in the home searches.  He said a number of €2 plastic plugs – which campaign groups have been offering for sale around the country – were taken from one of the houses. (Activists have been encouraging people to remove their water meters and uses the caps to keep their supply flowing – it’s not something Irish Water endorses).

Mr Mac Giolla Easbuig said " Our message is that we will not be intimidated by political policing. We will continue to support all those who resist metering and support the boycott. The best way for anyone who shares our anger at these events is to show it, is by supporting the Bin The Bills demonstration on 25th April."

Can't Pay Won't Pay Bin The Bills demonstation Letterkenny April 25

Eurostat finally receives request from Ireland - Irish Water Stress Test Begins

Buncrana Together received word from the European Statistical Data support (ESDS), Eurostat, that they have just received a request from Ireland re market test on Irish Water.  They informed us that " Eurostat is going to examine it in accordance with the procedure. No further comment will be made during this procedure."

For those who are technically minded Eurostat went on to say  "The criteria describing the classification of the unit either inside or outside of government sector is described in Manual on Government Deficit and Debt (MGDD) in the chapter I.2 Criteria for classifying units to the general government sector. The MGDD can be found in the website of Eurostat ( see MGDD ) . The criteria contains several steps and the quantitative market/non-market test is described in detail at part I.2.4.3 of the previously mentioned chapter. The main thing in this particular part of the process is to determine whether a producer is market, it must sell its products at an economically significant price which, in practice, would be assessed if the sales of the producer cover a majority of the production costs."

For the less technically minded what this means is that Eurostat is going to do a market test on Irish Water.  The Government  has to prove that more than 50% of Irish Water's running costs are form customers, both private and business,  in order for it to be taken off the State balance sheet.   If Irish Water fails the test this could have dire consequences for future budgets.  It could mean  €600 million will be added to the deficit this year.  It would affect Irish Water's long term investment programmes which are planned on the basis that it will be off the State balance sheet.  Any State investment in Irish Water would come on to  the State balance sheet.  One of the key issues here is the €100 conservation grant which the Government hopes will be separate form Irish Water.

There still remains controversy in the Irish public and opposition politicians surrounding the Central Statistics Office's (CSO) delay in supplying Eurostat with data and requesting a market test  (see Buncrana Together)  
 

It was widely known that the CSO was to request this since last year and that the results of the Eurostat test would be out mid March 2015.  This deadline was missed by a long shot. Now Eurostat's decision could take a couple of months yet,  however, there is no definite date.

Some suggest that the delay was intentional because Irish Water is behind schedule with their metering programme and developing their customer base.  Any lay person would think that showing a large customer base would be one of the most important elements in proving that a company is viable.   Irish Water and the Government insist that all users of the public water supply are customers of Irish Water even though households have not signed a contract with them.  Irish Water say that the Water Services Acts 2007 and 2013 gives it this right. 

It remains to be seen what way Eurostat will look at it  whether it will accept Irish Water's customer claim or whether it will take into consideration the sizeable opposition to Irish Water in Ireland, including politicians.  A layperson would find it hard to understand  how a company could be viable if a sizeable number of it's  potential customers are not going to pay.  Unless Eurostat accepts that the Government will recoup the money out of the public one way or another. 

There was an interesting line in an Irish Times article on the subject ( see Irish Times CSO provisionally puts Irish Water on State books)  where it states  "It appears likely the CSO has indicated to Eurostat its support for Irish Water to remain off balance sheet. " 

So the controversy continues.  Previous questions on CSO's delay by Sean Fleming FF in a Public Affairs Sub Committee meeting,  got stern reactions from both Taoiseach Enda Kenny and Tanaiste Joan Burton when they defended the impartiality of the CSO.  See Buncrana Together

If you have any requests to Eurostat you can go to           ( Eurostat ).