Nestle Chairman Is a Total Hypocrite on Water Pricing

Nestle apparently has no shame. And no, I'm not referring to the company's campaign to sell junk food to the world's poor — this time, it's about water. Peter Brabeck-Letmathe, the chairman of Nestle, has a recent op-ed in The Guardian that is a call to "pay the true price of water." This is a surprising piece of writing from a company that is one of the world's biggest water bottlers, controlling a third of the U.S. market and bottling about 70 brands, including Arrowhead, Calistoga, Deer Park, Perrier, and Poland Spring. And what may be even more surprising is that Brabeck-Letmathe fails to even mention water-bottling once in his entire piece. Wonder why?

His theory on water pricing is basically what's known as full-cost pricing, which means that we should be paying a lot more for water. In theory, this isn't necessarily a bad idea, depending on how it's done. After all, people are more likely to conserve when things get more expensive. Although if this translates to an increased number people not being able to afford their water bills for basic services, then that's obviously a bad idea. Brabeck-Letmathe covers his bases here and says that small amounts of water for the poor for very little or free are OK, but if you use lots of water you should pay more. A few water districts in California have adopted this policy with some success.

However, Brabeck-Letmathe then points his finger at agriculture as where we should be focusing our attention to increase efficiency. He says that "our planet's attitude towards water is wholly unsustainable," a bold suggestion for a company that makes a handsome profit by bottling and selling water. He elaborates, "I have long argued that we need to set a price that more accurately values our most precious commodity." The key word to notice here is "commodity." Water is not our most precious resource, to him it is a commodity — something to be bought and sold, so clearly conservation and the right to water are not high priorities unless you can make a buck off of it.

Then he has the gall to write, "For Nestle, this takes the form of training and the promotion of water stewardship, technical help, or even assistance through microfinance. This is as important to us as our commitment to reducing water waste in our own business."

Nestle's so-called commitment to water conservation is the most blatant corporate "bluewashing" out there. How come Brabeck-Letmathe fails to mention the company's involvement in bottled water in this discussion? I guess it would be a bit hard to conserve water in your business when that business is filling up bottles of water. He's interested in consumers and farmers paying the "true price" of water, but his company gets away with paying peanuts for the liquid.

Just last year, Nestle easily secured a contract in Sacramento to bottle municipal water. Yep, that's right, the company bottled tap water to sell back to people. In Sacramento, there is no limit on how much the company can suck from the city's municipal system (and by the way, city residents had been under water restrictions at the time this deal was going through).

City Council member Kevin McCarty got wise to Nestle (although sadly he was in the minority). He said, "At current rates, they would pay the city about 65 cents per 100 cubic feet of water, or 750 gallons. That works out to a payment to the city of $186 for the 215,000 gallons of water taken on an average day. By the time that water is bottled and put on a grocer's shelf, the consumers would pay more than $2.1 million for those 215,000 gallons — a profit margin of roughly 10,000 percent!"

Sounds like the ultimate racket, right? I guess when Brabeck-Letmathe wrote, "the era of water at throwaway prices is coming to an end," he didn't mean it should apply to his own company.

Photo credit: casey.marshall