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To: US Water Network <us-water-network@lists.iatp.org>
From: leigh@polarisinstitute.org
Date: 2006-10-05 19:44:21
Subject: Inside the Bottle Newsbytes October 2006

Polaris Institute
Inside the Bottle Newsbytes October 2006

October 2, 2006
Deep Sea Water Sourcing

Is it a bird? Is it a plane? No, it's another marketing scheme aimed at
duping consumers into paying more for a bottle of water. The Star
Wars-esque
animated website (www.hawaiideepseawater.com
) introduction says it all: "Our
search for the purest water on earth brought us to the most remote
island on
earth, Big Island of Hawaii on the Kona coast, 3000 feet below the surface
where there is no pollution, no man-made chemicals and no bacteria."

If Koyo USA's MaHaLo Hawaii Deep-Sea bottled water is the wave of the
future, there is reason for concern. This company is conducting deep-sea
water takings. The idea of a corporation seeking deep-sea water was
literally out of this world, given the expense of accessing the water and
the cost of desalination. Yet, with the rise in bottled water consumption
(the company's current market is Japan, but has set its gaze on the U.S.
market next), new processing techniques and clever marketing, this company
has become very successful. It's earnings jumped from $21 million in 2004,
to $31 million in 2005. In three years, desalinated bottled water has
become Hawaii's second largest foreign export.

The Natural Energy Laboratory of Hawaii Authority (www.nelha.org
) pumps the
water from 3000 feet below the surface directly to Koya USA's processing
facility. When it arrives the water goes through a process of reverse
osmosis to remove 'excess' salt. The water is then bottled and shipped.

To convince the buying public to purchase its products, the company has
co-opted critiques at the bottled water industry to its advantage. Consider
this quote from their website: "In some cases, bottled water marketed as
'natural spring water'...is nothing more than filtered tap water. We at
Koyo
USA take these deceptive claims very seriously...."

The marketing folks at Koyo don't seem very serious about what the
consequences of pumping 1 million bottles of water a day from this deep-sea
location might have in terms of the marine environment.

The company also claims that its deep-sea water is free from human related
contaminants. From their website: "...some bottled water may contain
bacterial
contaminants...traces of industrial solvents or other chemical contaminants
absorbed from the bottling source. Since our water is pumped from 3,000
feet
below the ocean's surface, it does not come in contact with surface
contaminants, and we do not have to use any additives to remove those
contaminants."

Koyo even acknowledges that the demand for potable water is far out pacing
its accessibility thereby underlining the importance of this venture. This
is a slick way to tempt investors.

It is doubtful the 1 billion people without access to potable water are
breathing a sigh of relief knowing that they can order a case of 30, 500 ml
bottles online for $86.00 USD with shipping.

Three other Hawaiian corporations have seen this lucrative market and
decided that they also want a piece of the action. Watch out water
activists, - the new danger lurks deep below the surface.

Summer Headlines for the industry

It has been a busy summer for the big bottled water corporations. Over the
last few months' businesses have changed hands, new CEOs have been hired,
leading brands have come under fire, and the global reach of the industry
has expanded.

For Coke and PepsiCo in particular it was a very difficult summer. The two
giants have had to answer serious allegations of selling pesticide-laden
products in India and have been banned in over 7 Indian States over the
issue. In addition, Coke faced legal challenges from Greek antitrust
authorities and a former Uzbek joint venture partner. To make matters worse
for the red and white, one of its employees tried to sell corporate secrets
to PepsiCo.

With media headlines saying things like 'Is Coca-Cola's bubble about to
burst?' and 'Giving the goliaths a good kicking', Coke is definitely
feeling
the pinch. Even with the pressure mounting from many sides, Coke managed to
snap up another bottled water company in Australia, while their latest
financial results show that sales from non-carbonated drinks (including
water) are keeping the company in the red.

The other bottled water giants Nestlé and Danone spent the summer buying
and
selling water subsidiaries. Danone, the French yogurt and water
corporation,
let go of their Canadian Home and Office Delivery units, while Nestlé
expanded its water operations in Turkey and built another water bottling
plant in Russia.

The following is a sample of summer 2006 news headlines from the bottled
water industry:

[US] Starbuck's Corp signed a deal with PepsiCo Inc. to expand distribution
of Starbucks-owned Ethos Water
June 19
The Food Institute Report
Starbucks signed a deal with PepsiCo to expand distribution of Starbucks
owned Ethos water. Ethos water, currently sold in 5,000 Starbucks outlets
and several small US retailers, will eventually expand to 100,000 points of
distribution.

[Brazil] Ouro Fino exports bottled water to Walgreens
July 19, 2006
Gazeta Mercantil
US drug store giant Walgreens has signed a contract with Brazilian bottled
water company Ouro Fino to supply its outlets with bottled water.
Walgreens,
ranked 134th on the 2006 Fortune 500 with an annual revenue of $42.2
billion, has close to 5,000 stores in the US and Puerto Rico. The water
will
be sourced and bottled by Ouro Fino and distributed in the US under the
label Brazilian Springs. The President of Ouro Fino said that this was the
first large sale of water to the United States by a Brazilian company. The
water is sourced from a protected spring near the city of Curitiba,
which is
located 100kms from the port of Paranaguá. Ironically, 10% of the revenue
from sales will be put towards the preservation of the Amazon rain forest.

[US] Pre-packed ice takes bottled water's cake
August 1, 2006
Packaging
Frozen bottled water? AquaICE founder and CEO, Peter Moenickheim claims
that
his company 'brings bottled water quality to ice in conveniently packaged
ice cube trays" claims. The company is selling packages of 10 prefilled
sealed ice-trays of 10 cubes.

[Turkey] Nestlé acquires majority stake at bottled water company Erikli
August 3, 2006
Dunya
Nestlé announced that it would merge with Turkey's number one bottled water
company Erikli. Nestlé Waters will hold a 60 percent stake in the company.
If the deal is approved by Turkey's competition authorities, Nestlé will be
handed the country's leading premium water brand at a time when the market
is experiencing double digit growth.

[Canada] Danone Sells Canadian Water ops to Birch Hill Equity Partners:
Terms undisclosed
August 23
AFX International Focus
Danone confirmed that it has sold its Canada division to Birch Hill Equity
Partners. Birch Hill will change the name of the company to Aquaterra
Corporation, but will retain the Canadian Springs and Labrador Source brand
names. The move follows Danone's sale of its US bulk water activities in
November 2005. Danone Waters of Canada was the leading distributor and
manufacturer of large format bottled water in Canada.

[India] Tata [Indian corp] taps into US bottled water
August 23 2006
BBC News Online
India's Tata Group - a Mumbai-based conglomerate with interests in
engineering, energy, consumer goods, mining - has purchased a 30% stake in
Glaceau, a US bottled water company for $677 million. Glaceau produces
nutrient-enhanced and fruit-flavoured bottled waters. Tata is best known
outside of India for owning Tetley Tea, which it bought in 2000. The Tata
Group encompasses more than 90 companies, which produced sales of more than
$22 billion in 2005.

Other headlines from the past summer (If you would like to read any of
these
articles in full please send a request to richard@polarisinstitute.org

[Russia] Nestlé Waters to build Leningrad plant
July 13
Just-Drinks

[Uzbekistan] Coca Cola faces $100M claim over Uzbek Venture
June 14, Dow Jones International News

[Greece] Competition Commission fines Coca Cola Hellenic Bottling with 8.6
mln euros
June 14, Athens News Agency

[China] PepsiCo to expand its production capacity in China
June 19, Economist Intelligence Unit

[Switzerland] Nestlé to buy Jenny Craig for about $660M
June 19, Dow Jones Commodities Service

[US] McDonald's testing bottled beverages; Coca-Cola may lose exclusive
right to beverages
June 20, Belleville News-Democrat (IL)

[US] Coca-Cola and Nestlé team up to launch calorie-burning tea drink
June 22, Marketing Week

[Algeria] Groupe Danone buys bottled water firm Tessala
June 27, Economist Intelligent Unit

[Belgium] Belgian Consumer Group to complain about Coca-Cola Prices
June 28, Dow Jones Commodities Service

[UK] 'Environmental insanity' to drink bottled water when it tastes as good
from the tap
June 29, The Independent

[US] Coca-Cola trade secrets 'stolen'
July 6, BBC News Online

[Italy] Coca-Cola acquisition of Fonti del Vulture cleared by Italy's
antitrust body
July 7, AFX Asia

[South Korea] Coca-Cola recalls drinks in SKorea after poisoning
July 11, Agence France Presse

[US] Bottled water in meaty flavours? Dogs lap it up
July 13, Agence France Presse

[US] Non-carbonated drinks boost Pepsi profit
July 13, AFX International Focus

[India] India set to be hub for Pepsi's juice sourcing
July 13, Financial express

[Russia] Nestlé Waters to build Leningrad plant
July 13, Just-Drinks

[South Korea] Coca-Cola attempts to cover up poisoning threat
July 14, Korea Times

[US] The bottled-versus-the-tap debate; Consumers who spent $10 billion
last
year on bottled water think it's a better bet. But is it?
July 17, Los Angeles Times

[US] Coca-Cola earning rise 7%, helped by sales of water
July 18, Dow Jones Business News

[Latvia] Madeleine Albright represents "Coca Cola" in protest to [Latvian]
President
July 19, Latvian News Agency

[India] Green study slams Coke's Kerala plant
July 21, Business Standard

[US] Coca-Cola wins pouring rights for city schools
July 21, Buffalo News

[Australia] Coca-Cola [Amatil] buys Palm Springs water
July 31, The Sydney Morning Herald

[US] Bottled Water's Leaky Logic
August 1, USA Today

[US] Pre-packed ice takes bottled water's cake
August 1, 2006
Packaging

[Australia] Bottled water a dental disaster
August 2, The Australian

[India] Dangerous pesticides in Coca-Cola, Pepsi in India
August 3, Centre for Science and Environment

[India] Soft drink giants Coke, Pepsi face poisoning allegations: Coca-Cola
sample in India found to have 200 times allowed pesticide level: report
August 5, London Daily Telegraph

[India] Coke and Pepsi told to spill secrets or face ban
August 5, The Times

[US] Officials at California state long beach announces new, 10-year
beverage agreement with Coca-Cola Bottling Company
August 9, US Fed News

[India] Ban on Coca-Cola and Pepsi extends across 7 Indian states
August 11, Financial Times

[US] Wegmans water recalled for high bromate levels
August 13, 2006, The Post Standard/Herald Journal

[Zimbabwe] Coca-Cola sets its sights on Zim bottled water market
August 18, All Africa

[UK] Coca-Cola's 'unethical ways' leave a bad taste in Sussex students'
mouths
August 19, The Independent

[Latvia] Latvia bans Coca-Cola, Pepsi and sweets in schools
August 22, Agence France Presse

[US] North America buoys Nestlé Waters
August 23, Just-Drinks

[UK] Student Union bars ban Coca-Cola
August 23, BBC News Online

[India] Indian court refuses to lift ban on Coca-Cola, PepsiCo in Kerala
state
August 25, AFX Asia

[US] Coca-Cola sued in US on ingredients that may form benzene
August 25, Dow Jones International News

[US] U. Florida: PepsiCo grants $1.1 million for U. Florida's obesity
research
August 31, U-Wire

[Australia] Coca-Cola says fizzy drinks not responsible for obesity: Soft
drinks 'victimised' in obesity debate
September 4, Australian Broadcasting Corporation Transcripts
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Encourage friends and family to subscribe to NewsBytes, check out
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the bottle.