8 Mar 2018

Water in Mexico City: distrust increases company profits

Cynthia writes:*

If you go to Mexico City, you will probably see many people buying bottled water at supermarkets or convenience stores. These people trust bottled water more than tap water from the public water system.

I was thus surprised to discover that most people in the Netherlands drink tap water! They trust the water is potable because pay for service. Filling and refilling your reusable water bottle as many times as you want? It’s simply AMAZING!

So what is happening in Mexico City where citizens pay for the public water supply system but also spend a lot of money on bottled water?

It’s time to tell you part of the history behind this matter. In 1985, an earthquake of 8.1 on the Richter scale hit Mexico City, causing massive destruction and numerous deaths. The government's weak response made the crisis even worse.

After the earthquake, a significant water supply problem came to light in the city. Potable water and sewer pipeline systems were damaged, leaving thousands of families without water or contaminated  water. The government argued that the water was pathogen-free but contaminated by oxidation residues that the earthquake shook free. Authorities recommended to boiling water and adding chlorine as a precaution against any pathogens that were not supposed to be present. This recommendation became a habit, and low- and medium-income families still boil tap water and buy water in 20-liter bottles.

With the focus on rebuilding buildings, trams and lights, the public water system was neglected, leaving an opportunity to big companies (and small local players) that wanted to increase their market share. The government’s failure to provide potable tap water has resulted in a proliferation of purification, bottling and distribution plants.

Citizens still don’t trust the Mexico City Water System (SACMEX). Quality is not guaranteed, and service is intermittent in several areas. The increase in clandestine water purification plants missing  permits and sanitary standards has exposed the authorities' incompetence, lowering trust in citizens and encouraging demand for bottled water from transnational companies.

Sadly, this new consumption has increased plastic waste in Mexico City and the rest of the country. In 2015, Mexico consumed the most bottled water in the world. Incredible! Out of the 21 million plastic bottles used every day, only 20% are recycled.

Nowadays, water resources are privatized via bottled water purchases and regulations that allow private companies to  to exploit aquifers. With resources going to the highest bidder, transnational companies like Coca-Cola, PepsiCo, Danone and NestlĂ© have 82% of the bottled water market, selling their water at a 750x the price of public tap water.

Bottom line: Citizen distrust of authorities has led to transnational companies controlling and selling drinking water as a private good (violating Article 4 of the the Mexican Constitution promising water as a right) as well as an environmentally harmful increase in plastic waste.

* Please help my environmental economics students by commenting on unclear analysis, other perspectives, data sources, etc. (Or you can just say something nice :)