Select Committee on Scottish Affairs Appendices to the Minutes of Evidence


Memorandum from the Deeside Water Company Limited

  I am writing in response to your request for a memorandum outlining our thoughts and concerns about the bottled water industry.

  The industry is governed by the appropriate UK and EU legislation regarding standards and processes, which were reviewed and revised fairly recently. It is reasonable to assume these will not change again in the near future. On the basis that the core regulations remain the same, there are three main points we wish to note.

  The first is that our company is a relatively small family run business employing ten people. We believe it is important that the interests of smaller operators (and their financial limitations) are considered in any decisions made. The implications of certain requirements or changes can make the difference between a viable company and one that is not. A common sense approach should be maintained with a view to protecting the smaller operator who has limited financial resources.

  The second point is that bottled water is an extremely competitive business and pressures exist from foreign companies who sell in the UK. It is essential that Scottish producers are not disadvantaged in any way that may increase red tape or costs when compared to foreign competition. There is very little profit margin in a bottle of water and increases in costs can make some operations non viable. Any additional taxation or changes to labelling requirements would led to costs that some companies could not bear, which in turn would lead to closure and the loss of jobs, which is particularly important in rural areas where many water producers are based.

  Finally, it is worth noting that our distribution costs have risen dramatically in the last year due to high fuel prices, making our product either more expensive and therefore less competitive, or leading to a lower profitability for our company, which prevents growth, expansion and investment. These additional costs are very significant.

  These are very general points of particular interest to our own company. I hope they may be relevant to the debate.

The Deeside Water Company Limited

October 2000

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