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New Zealand's longest-running online daily news and commentary publication, now in its 23rd year. The opinion pieces presented here are not purported to be fact but reasonable effort is made to ensure accuracy.

Content copyright © 1995 - 2017 to Bruce Simpson (aka Aardvark), the logo was kindly created for Aardvark Daily by the folks at aardvark.co.uk



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Water we going to do?

13 July 2017

Just down the road from where I live is a town called Putaruru.

In that town, the company which has the license to make Coca Cola here in NZ takes around 200,000 litres of water every day from the "blue springs", filters it, runs it past some powerful UV light sources (to kill bacteria) and drops it into plastic bottles.

I can buy a 1.5 litre bottle of that water in my local supermarket for a dollar.

So let's see... that's $133,333 worth of water (at retail prices) being taken from the spring every day. Over the period of a year that comes to around $48 million.

Hands up if you can guess just how much this company pays for that water with a retail value of $48m?

I believe it's about $400.

What the?

Can you say "serious profit margin"?

Okay, it's perhaps not as lucrative as these figures might suggest.

For a start there's the quite significant capital investment associated with the bottling plant and warehousing. Then there are the input costs associated with packaging and shipping. Finally it has to be remembered that we're talking retail prices here and the odds are that the bottlers are getting less than half that retail price, perhaps less.

However, when the cost of your core product works out to be $0.000001 per litre it's still a fantastic business model.

But let's scale that up a bit.

Why?

Because the Coca Cola people now want to take almost 7 million litres a day -- that's THIRTY FIVE times as much as the do right now.

That extra water will be bottled up and exported -- probably as a premium product with a much higher retail price than the domestic market will deliver.

So how much more will they pay for this massive increase in water used?

Answer: probably nothing. Odds are they'll still get it at a flat rate of $400 per year.

This is because the government has decided that since nobody "owns" the water, it can't be sold. The only charge levied is the infrastructure cost or the cost of processing the consent.

Now let me see if I've got this right...

We have a lot of problems in this country. Child poverty and an under-funded mental health system to mention but two.

With genuine Kiwis crying out for help and even more subsisting on or below the bread-line, why are we effectively asking them to subsidise the largest soft drink company on the planet?

The government says that putting a price on water would create all sorts of ownership issues with Maori. I say phooey -- they're just looking for excuses.

It would be very easy to get around this objection by, instead of charging Coca Cola for the water they extract -- simply put an export tariff on the product they send overseas. This does not assert any ownership of the water -- simply a tax on its commercial export.

Sadly however, the present government, for whatever reason, choose to be less than pragmatic about this issue and seem hell-bent on giving away what is rapidly becoming one of our most precious resources. The way our waterways are rapidly being screwed by the dairy industry and the way we're giving the damned stuff away, it won't be long before the only place you'll be able to find good quality drinkable NZ water is on the shelves of foreign supermarkets.

What do readers think?

Would a simple water export levy be the most pragmatic solution to this problem?

Couldn't this solution effectively provide *all* NZers with equal benefit from the export of our most precious natural resource without assigning ownership?

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