Giving away water in a drought

The news article is a month old but that doesn't make it any less infuriating. Potable water is becoming a major environmental issue, something that folks in the southeast of the US already know since they are experiencing a drought. What better time to sell the multinational food and beverage giant, the Nestle Company, the rights to draw hundreds of millions of gallons of water a year from wells drilled in a state park in Florida? To add insult to injury of the taxpayers of Florida, they Nestle will rebrand it as water associated with western Maryland.

I guess Florida needs the cash, and water rights until the year 2018 in the context of a regional drought must be worth plenty to the cash strapped State of Florida. I wonder what they will do with the total revenues of $230 in permit fees they got for this? You read it right. I didn't leave off any zeroes. $230! No taxes. No other fees. But Nestle says Floridians should be grateful:

Nestle bottles that water, ships it throughout the Southeast -- much of it to Georgia and the Carolinas -- and makes millions upon millions of dollars in profits on it.

The state granted Nestle permission to draw so much water against the strong recommendation of the local water management district staff. Because drought conditions were stressing the Madison Blue Spring, the staff said the amount of water drawn on the permit should be cut by more than two-thirds.

So while Florida is in a bitter dispute with its state neighbors over water use, it's giving its water away to a private company that bottles and ships it to those very same states.

Nestle says Floridians should be grateful. Its bottling plant has generated taxes and created jobs. "You're talking about millions and millions of dollars in tax benefit," said spokesman Jim McClellan. "It's a very good deal for the state of Florida." (St. Petersburg Times via Boingboing)

Jobs of course are important to any region. The Nestle bottling plant promised 300 jobs. It hasn't even done that:

The state did much more than fight to get Nestle the right to pump as much water as possible from the spring.

As an added incentive for Nestle, the state approved a tax refund of up to $1.68-million for the Madison bottling operation. To date, Nestle has received two refunds totaling $196,000 and requested a third tax refund.

Nestle had promised to create 300 jobs over five years. The most people it has ever employed was about 250. The number dropped to 205 late last year, 46 of them from Georgia, which Nestle defends as common for a work force along a state line.

Still, a job is a job. Very important for those employed.

But even better for Nestle. Much, much better.

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There is so much to say about this. The intersection of water issues, environmental issues, jobs, government, everyday "mercantilist" deals, corporate monopoly, branding, and more.

First point I want to make is that the state government in Florida like most states is in very tight budget times and government gives away assets to its friends for free. I will not comment on the water rights issues because I am not very knowledgeable about them.

Second point is that the jobs issue is sort of moot. Yeah, the local plant may have 150 jobs (which is a good thing) but the alternative is hardly ever 0 jobs. The only way any company can claim real economic benefit to an area is IF they create more jobs than alternative uses of the local assets. This point is almost never understood in public discussion of corporate giveaways by government.

The "jobs created" by any potential project is not only misleading in the number of rosy assumptions and "best cases" supposed (I call this the "fallacy of boosterism") but also the sleight of hand the presumes that no jobs would be created by alternative investment (this is usually most relevant when their is cash or tax breaks going to a business without the slightest concern whether the government is getting the best local investment). Even in this case their would be jobs in alternative uses of the land (even if it is simply a nicer park or a nicer place to live).

A minor point that for some reason still bugs me ever since a happened on a giant landfill near the Poland Spring plant in Maine a few years ago is about the "branding" of water. They choose to name their water after places that evoke (the evocation can be completely created by the brand) idyllic, pristine places but there is little to regulation to where the water comes from. Zephyr Hills is a place and it annoys me that the water does not come from there at all.

By floormaster squeeze (not verified) on 11 Apr 2008 #permalink

Florida is going to use the cash to get creationism into schools....

I am just dumbfounded. This is unbelievable. Insane.

Just in case anyone thinks the duplicity and it-seems-like-fraud of the bottled water they-seems-like-fraudsters is new or isolated, as a counter-example, there was a case in the UK a few years ago of Coca-Cola selling Thames river water, Things get worse with Coke:

First, Coca-Cola's new brand of "pure" bottled water, Dasani, was revealed earlier this month to be tap water taken from the mains. Then it emerged that what the firm described as its "highly sophisticated purification process", based on Nasa spacecraft technology, was in fact reverse osmosis used in many modest domestic water purification units.
Yesterday [ c.19-March-2004 ], just when executives in charge of a £7m marketing push for the product must have felt it could get no worse, it did precisely that.
The entire UK supply of Dasani was pulled off the shelves because it has been contaminated with bromate, a cancer-causing chemical.
So now the full scale of Coke's PR disaster is clear. It goes something like this: take Thames Water from the tap in your factory in Sidcup, Kent; put it through a purification process, call it "pure" and give it a mark-up from 0.03p to 95p per half litre; in the process, add a batch of calcium chloride, containing bromide, for "taste profile"; then pump ozone through it, oxidising the bromide - which is not a problem - into bromate - which is. Finally, dispatch to the shops bottles of water containing up to twice the legal limit for bromate (10 micrograms per litre).

Does the state make any money on the sales tax with every bottle of water sold? You know, those bottles of water that didn't exist until the plant was built and they started filling the bottles with the water and selling them.

By bigdudeisme (not verified) on 14 Apr 2008 #permalink