International Herald Tribune - With budgets tapped, governors eye cost of bottled water

By Sue Haigh

HARTFORD, Conn.: It's a drop in the bucket for overburdened budgets, but bottled water is an expense states are considering cutting at the urging of activists trying to galvanize support for the use of public water supplies.

Following a similar move by U.S. mayors earlier this year, governors across the country could collectively save millions of dollars annually by requiring government offices to cancel their bottled water contracts and force workers to drink from the tap.

Water drinkers worldwide are already making the switch as they look for ways to save money during the economic downturn.

Nielsen Co., which tracks consumer trends, said U.S. bottled water sales for the year that ended Jan. 24 fell 3.3 percent, compared with an increase of 11.5 percent during the same period a year earlier. France's Groupe Danone SA earlier this week said its 2008 profits shrank 69 percent in part because of declining sales of Evian bottled water in France, Spain, Britain and Japan.

Alan Despins, who works in Connecticut's Labor Department, said he's not impressed by potential savings. He said the state has more daunting issues, such as a looming deficit and cuts in state services.

"I think the people that care are going to be upset," Despins said. "I think there are much bigger problems at the current time."

A study by the Connecticut General Assembly found the state spends at least $500,000 annually on water and dispensers. Massachusetts spends about $600,0000. Minnesota last year spent nearly $166,000 on bottled drinking water and water cooler/dispenser rentals. That figure doesn't include large state institutions like the University of Minnesota, which spends about $178,400 annually.

While such potential savings are not huge when compared to the budget deficits many states face ? Connecticut's is about $9 billion over three years ? environmentalists opposed to bottled water are seizing on the economic downturn.

"Bottled water is an irresponsible use of public resources," said Imani Zito, a Hartford restaurant owner who serves only tap water to his customers. He hopes if state governments stop buying bottled water, motivated by the savings, everyday citizens will follow suit and ultimately protect the environment because they're using fewer plastic bottles.

"Often society waits to take its cues from its government," he said.

John Sicher, editor and publisher of the trade publication Beverage Digest, said the bottled water business is no longer growing, largely because of the lousy economy. But he believes it can rebound once things improve.

"It's gotten to become a very big beverage category," he said. "Consumers continue to experiment with different kinds of beverages, so I think bottled water can return to growth, but not to the big double-digit growth it was a few years ago."

Tap water, he said, isn't a huge competitor.

"Bottled water, for the most part, is not a replacement for tap water," he said. "There are a lot of places where it's simply easier to get a bottle of water than a glass of water."

Connecticut Gov. M. Jodi Rell said she has sought to cut large and small items in the budget in hopes stemming her state's burgeoning deficit. In a recent deficit-reduction package, she eliminated $2,000 for a flag restoration project and $950 in equipment for the state library.

She's now willing to consider nixing the bottled water.

"She has not had a chance to study this proposal in detail, but welcomes all reasonable suggestions that will continue to reduce spending," said Rell spokeswoman Donna Tommelleo.

Corporate Accountability International, a Boston-based nonprofit corporate watchdog group, is leading a national effort to persuade individuals, governments and businesses to stop using bottled water and support public water systems through its "Think Outside the Bottle Campaign."

Last year, the majority of about 250 mayors who attended the U.S. Conference of Mayors meeting in Miami voted to phase out government use of bottled water. San Francisco canceled its city spending on bottled water in 2007, saving nearly $500,000 annually. Seattle, which stopped buying bottled water last year, is saving up to $57,000 annually.

Corporate Responsibility is now turning its attention to the states. This week it sent letters to all 50 governors, urging them to end their state contracts with bottled water suppliers and request that federal economic stimulus funds be spent on upgrading public water systems.

The group is organizing public outreach campaigns in 10 states, including Connecticut, Massachusetts, Minnesota, California, Virginia, Washington, New York, Ohio, Vermont and New Mexico.

Companies that sell bottled water are already noticing a shift in consumption.

"We've seen a slowdown," said Brian J. Flaherty, director of public affairs for Nestle Waters North America Inc., a Greenwich, Conn.-based subsidiary of Switzerland-based Nestle SA, whose brands include Poland Spring, Deer Park and Perrier.

"The economy is forcing a lot of companies and our customers to trim back and make some decisions," Flaherty said.

Flaherty, who maintains that bottled water is not in competition with tap, said the company is willing to work with its customers like the state of Connecticut. For example, Nestle can install water filtration systems that are hooked up to the public water supply.

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