Memorandum from the British Soft Drinks
Association (BSDA) (DIS 2)
Thank you for inviting BDSA to up-date its submission
to the inquiry.
Since giving evidence on 9 November 2000, the
Scottish Executive has published a consultative document on "The
Future for Scotland's Waters". BSDA Members in Scotland,
particularly those bottling water, have concerns about the way
in which controls might be applied to water abstraction and the
attached paper explains these points.
Please let me know if we can assist in any further
British Soft Drinks
Water Abstraction in Scotland
1. The Scottish water bottling industry,
which accounts for about 35 per cent of UK production (900 million
litres) and plays a leading role in developing the industry and
consumer perception of the qualities of bottled waters, is particularly
concerned that the implementation of the EU Framework Water Directive
in Scotland could impose unnecessary burdens or restrictions on
industry development. The Scottish Executive is currently consulting
on implementation via its paper entitled "The Future for
Scotland's Waters". According to the SE, some system of controls
on abstractions will be required.
2. BSDA fully support policies and measures
necessary to protect the environment and natural resources. Indeed,
this is essential for Natural Mineral and Spring Water bottlers
who are committed to the quality of their products and rely on
the inherent characteristics of these natural resources to build
the reputation of their businesses. However, it has considerable
concerns that the implementation of the EU Framework Water Directive
could impose controls and restrictions on water abstractions for
the sake of bureaucracy rather than environmental need and thereby
have a damaging effect on the development of the industry. In
England and Wales, the Environment Agency is proceeding to extend
time-limited abstraction licences and is seriously jeopardising
the development of the industry: the industry in Scotland strongly
opposes that any such system should be applied by SEPA.
The bottled water industry depends on long-term
3. Bottled water is a fast-growing sector:
the UK market for bottled water is now worth more than £550
million per year, growing at an annual rate of 10-15 per cent.
Consumption has more than doubled in six years and this rate of
growth is predicted by market analysts to continue in the future,
as the per capita annual consumption in the UK (23 litres) is
well below the West European average (91 litres). To date, the
Scottish industry has responded successfully to increasing demand
and wants to rise to the challenge of the rapidly growing market.
4. The market is very competitive, with
a strong presence from imported brands of 25 per cent in 2000.
At present, the best-selling and best-known brands in the UK are
French. Scottish companies are growing but will need time and
investment to be able to match the Continental giants. Banks and
other investors will not invest in bottled water companies whose
businesses might be arbitrarily curtailed or restricted by the
abstraction licensing system. Without investment, the industry
will be unable to expand to meet consumer demand and imports will
take an even larger share. This is a loss for jobs, the economy
and consumer choice.
5. It is imperative that the licensing system
in Scotland does not stifle investment, and consequently industrial
growth, for bureaucratic rather than environmental reasons. BSDA
is therefore pleased to read that the Scottish Executive intends
to base measures on the principles of need, risk assessment and
proportionality. It very much hopes that these principles will
be applied in practice and that the resulting measures take account
of the needs of water bottling companies. BSDA has the impression
that the position of water bottlers is not sufficiently considered
when licensing controls are discussed and must stress that measures
devised for mains water suppliers are not relevant or appropriate
for water bottling companies.
Threat to Rural employment
6. Owing to the source of their raw material,
water bottlers are located in rural areas, providing much needed
employment and economic activity. The expected rise in consumption
should help to boost employment in the sector. However, this will
be put at risk if abstraction licences deter investment. Instead,
demand will be met by importers and jobs will effectively be exported.
7. This raises the question as to how the
EU Framework Directive is being implemented on the Continent.
Through our European network we have received no indication that
Continental water bottlers might be confronted with measures which
could affect their abstraction activities. This means that they
are in a strong position to fill any market demand and places
Scottish bottlers in a weak competitive position.
Bottled Water is a Strategic Resource
8. Bottled water is not only supplied through
retail and on-trade outlets but is also relied upon as a strategic
resource. Many mains water companies rely on back-up supplies
of bottled waterthrough contracts with specialist water
bottlersto help them meet their public service obligations
in the event of a disruption due to climatic or contamination
incidents which prevents the supply or use of mains water. One
BSDA Member was called upon three times last year to provide emergency
supplies. Maintaining a viable and adequate domestic bottled water
industry is, therefore, an essential part of overall public health
9. All bottled water members of BSDA who
have been contacted have arrangements or contracts to supply bottled
water to water companies, local authorities, hospitals etc in
the event of contamination or disruption of the mains water supply.
Water Bottling Uses only a Tiny Proportion of
the Overall Water Supply
10. It is important that the environmental
impact of water bottling is seen in context so that proportionate
rules can apply. At present, the Scottish industry bottles around
320 million litres of water per year. This is less than the leakage
from the mains system in three hours. In other words, water bottling
accounts for only a miniscule amount of water usage in Scotland.
11. Furthermore, compared with the way that
public water supplies are managed, water bottling is a highly
efficient use of water and cannot become more efficient.
Tied to a Specific Source
12. Natural Mineral Water and Spring Water
bottlers are unique in being linked to specific sources of water.
Natural Mineral Water must come from a registered, named, protected
locationit cannot simply substitute its supply. Options
such as using alternative supplies or relocation are not possible
and these factors must be taken into account when measures are
BSDA urges legislators to take account of the
particular needs of water bottlers when implementing rules relating
to abstraction licences and to ensure that controls are based
on environmental need, risk assessment and proportionality. The
growth of the sector depends on the ability to invest and this
will be seriously jeopardised if licences are time-limited or
onerous to acquire.
British Soft Drinks Association
3 See also HC 973-i, session 1999-2000, pp 1-3. Back