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Lisa Kaas Boyle

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Desperate Bottled Water Industry Battles Trend Toward Tap (VIDEO)

Posted: 07/21/09 11:41 AM ET

Demand for Bottled Water Evaporating

As concerns mount over bottled water's impacts on the environment and human health, bottled water sales are beginning to dry up. In America, Nielsen reports that bottled water sales fell 3.3% in the US last year.

Evian reported that its 2008 profits shrank 69% in part because of declining sales of bottled water in France, Spain, Britain and Japan. Sales of bottled water in France fell by 7.5% last year.

Switzerland-based Nestlé, the world's biggest bottled water manufacturer, including the brands Perrier and San Pellegrino, reported that sales of its water declined by 4.1% in the first three months of 2009, with a particularly startling 9% drop in the British market last year.

Bottled Water Viewed as Trashy

Increasingly around the world, plastic water bottles have been identified and targeted as a major source of pollution.

Venice, Italy is promoting city tap water as a means of reducing the plastic bottle trash that has plagued its canals and other historic sites. To advertise the tap water, the city branded it "Acqua Veritas" and distributed to city residents free carafes bearing a stylized logo. Venetian officials consider the program a great success: a reduction of plastic trash by 27 tons a year.

Most recently, Bundanoon, Australia, a rural town about 75 miles southwest of Sydney, became the first community in the world to outlaw the selling of bottled water, as it seeks to reduce the use of plastic and protect the environment. Stores will sell reusable bottles to be filled from filtered water fountains in the town, instead of commercially bottled water being trucked into the town.

Government Budgets for Bottled Water Tapped

Furthermore, in a time of worldwide economic stagnation, governments are under increasing pressure to stop spending tax dollars on expensive and unnecessary bottled water. Last year, the majority of about 250 mayors who attended the U.S. Conference of Mayors 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.

Public vs. Corporate Rights to Water

Across America, communities are beginning to resist when companies seek to acquire new water sources and to pump more and more from the water sources the companies already own.

Enumclaw, Washington cited environmental concerns when it rejected Nestlé's bid for its water, and Nestlé was forced to drop attempts in two other Washington towns, Black Diamond and Orting, on "logistical grounds."

Nestlé's efforts in McCloud, California, near Mt. Shasta, have sparked a 6-year battle, with California's Attorney General Edmund G. Brown Jr. stating: "It takes massive quantities of oil to produce plastic water bottles and to ship them in diesel trucks across the United States. Nestlé will face swift legal challenge if it does not evaluate the environmental impact of diverting millions of gallons of spring water from the McCloud River into billions of plastic water bottles." A resident of McCloud added, "how can water, which supposedly is held in trust by the state for the people, be sold to a foreign corporation, or any corporation, without a vote by the people? We soon learned that Nestlé is preying on other small towns around the country."

Restaurants Go for Tap Water

Even some restaurants have given up the lucrative sale of bottled water for which they have traditionally charged an even higher price than consumers pay at the market. At New York City's Del Posto, diners won't find Perrier or San Pellegrino water on the menu.

The Italian restaurant, backed by celebrities Mario Batali and Joseph Bastianich, is one of several shunning bottled water. "The argument for local water is compelling and obvious," said Bastianich, who is phasing out bottled water across his restaurant empire, which stretches to Los Angeles. "It's about transportation, packaging, the absurdity of moving water all over the world," he said. At Alice Water's famed epicurean temple Chez Panisse, bottled water has been off the menu for the past three years for the same reasons. Customers who prefer their water bubbly receive tap water that has been lightly carbonated with the restaurant's own carbonator.

The city of Vancouver, British Columbia has asked restaurants to add tap water to the top of their beverage menus as part of that city's campaign to reduce bottled water sales 20 percent by 2010. The city's tap water campaign is part of a larger effort, called the Zero Waste Challenge, to reduce waste and to divert 70 percent of the regional district's solid waste from landfills by 2015. "Bottled Water is the equivalent of a pet rock: It's totally unnecessary and expensive," says Tim Stevenson, chairman of Metro Vancouver's water committee.

And for World Water Week, many restaurants across America encourage citizens to forgo bottled water for the UNICEF-sponsored "TAP Project." In a program that began in 2007, customers are encouraged to contribute $1 for the tap water they normally receive for free in order to help fund access to sanitary tap water for children around the world.

Congressional Inquiry Launched into Bottled Water Safety

Natural Resources Defense Council's seminal 1999 report on bottled water disclosed both bacterial and chemical contamination in bottled water and concluded that bottled water is often simply bottled municipal water and sometimes less safe than tap water.

Over 10 years after the NRDC findings were made public, this month the United States Government Accountability Office released a report that prompted House Energy and Commerce Chairman Henry Waxman (D-Calif.) and Investigations Subcommittee Chairman Bart Stupak (D-Mich.) to direct letters to 13 bottlers asking for information regarding testing, water sources and treatment processes. Rep. Stupak observed that "neither the public nor federal regulators know nearly enough about where bottled water comes from and what safeguards are in place to ensure its safety."

Bottles vs. Tap: The Battle is Just Beginning

The companies that sell bottled water are not giving up without a fight.

"We've seen a slowdown," said Brian J. Flaherty, director of public affairs for Nestlé Waters North America, 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. For example, Nestlé can install water filtration systems that are hooked up to the public water supply.

Determined to change the negative perceptions about the plastics industry created by its critics and opponents, the Society of the Plastics Industry (SPI) is preparing to launch a social media-based Internet campaign over 4 years, and at a cost of at least $10 million, aimed at the 60 million people in the millennial generation (i.e., those born between 1982 and 2001).

The industry is at a tipping point because of the visible waste stream associated with plastics and single-use disposal litter, admits Bill Carteaux, president and CEO of SPI.

Individual companies are spending millions on sophisticated advertisements that naturally avoid any negative associations with their product. For instance, Evian's current television ad, which is now an Internet sensation, uses computer-generated effects to feature adorable babies on old-fashioned roller skates, dancing to retro music, that takes us back to a time of innocence, long before the impacts of plastic bottles were apparent - when the economy was booming like the boom box featured in the ad.

But consumers beware: Evian spelled backwards is NAÏVE.

Watch the Evian ad below: