Bottled water: The profits of industries are “drying up”

Packaging materials, energy costs and transportation are eating up the profits of the domestic bottled water industry despite the forecasts for strong consumption in the summer season.

At the same time, consumers are paying more for water, while from next week prices will rise further due to the recycling fee, which is imposed on products that have plastic packaging.

Specifically, from June 1, a recycling fee is imposed on plastic bottles labeled with polyvinyl chloride (PVC) of 8 euro cents per product package (before VAT). The final increase that will reach the consumer is expected to be around 10 cents.

The fee is reciprocal and the revenues from it are public revenues, which are collected by the Independent Authority for Public Revenues AADE and attributed to the Hellenic Recycling Organization (EOAN) in order to be used exclusively for the financing of recycling actions.

Plastics rise 300%

Representatives of bottled water companies talk about a tripling in the cost of packaging materials. Indicatively, it is mentioned that the plastics market is approaching 1,900 euros per ton of product from 700 euros per ton, while the cost per pallet has risen to 16-18 euros from 7 euros.

At the same time, transport and energy costs have skyrocketed, with forecasts for the coming period being more ominous.

Increases up to 5%

Regarding consumer prices, the average appreciation on the shelf is of the order of 4.5% -5%, due to the increases that took place during the two months February-March, while a new wave of increases is expected in the near future.

According to the same executives, the smaller companies may be forced to proceed with new increases in its price lists earlier, even in the summer, while the larger ones are expected to launch similar increases in early autumn.

Waiting for the heat and tourists

Although in the first quarter of 2022 consumption was sluggish, recording a decrease in shelf sales volumes to 2.8% with the private label declining at a rate of 10%, weather change, rising tourism and increased traffic on its HORECA channel have increased demand in the last month.

However, according to industry executives, the losses caused by the increased operating costs can not be “equalized” even to confirm the estimates for strong consumption in the summer.

Reversals in operating costs are fueling increased competition and it remains to be seen whether the ambitious investment plans announced by the old and new “players” will be implemented.