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 :)


Martijn van Engelenburg said...

Really informative blog post! For me having this luxury of high quality tap water is part of life. It's good for me to read that I should value it more. Is the situation getting worse as more businesses are entering the market? And I wonder if people are already protesting it? Or do they just accept the fact and continue with their lives?

Lennart said...

Very interesting blog! Is the government's incompetence related to corruption as well? And to what extend do the transnational companies influence Mexico's policies?

I wonder how you could better this situation. Because in principle there should be a market potential, if bottled water is sold a such high prices. Could a transnational company actually make a difference there as well? Or is that impossible since the state probably owns all the water infrastructure?

Kyra said...

Selling bottled water for 750 times the price of public tap water is truly outrageous. Unfortunately, Mexico City is probably not the only place where this happens. There are many regions still where tap water is not suitable for drinking, and the companies you mentioned are highly present in these regions as well. I was in Indonesia a while ago where everyone was drinking water packaged in these small plastic cups, like these: http://www.staplesindo.com/?product=aqua-cup-water-240-ml . These types of cups are even more a disposable product then water bottles, and the result was that in many places the streets where filled with these cups lying on the ground.

My point is, you provide a very interesting case study for Mexico city, but it could be helpful to place the situation more in a context. Is the situation in Mexico City very different from other regions where there is no potable tap water? How was the tap water regulated before the earthquake? And how is it regulated in other regions of the country? If it’s the case for example that tap water is potable in other regions of the country, but not in the Mexico city, then you make an even more interesting case.

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