Thu | Nov 23, 2017

George Davis | Bottle that idea, and throw it away

Published:Wednesday | July 12, 2017 | 12:00 AM

I recently put it to a senior member of the Holness Cabinet that there was no way the Government could be seriously contemplating allowing the National Water Commission to enter the bottled water market, as reported in The Gleaner on June 13, 2017.

I was expecting the attorney to say that such talk was hogwash and that the Government had no intention of competing with the entities already servicing the large and still-growing local market for the commodity. But he surprised me. He suggested that I was a madman for not wanting the Government to open a new stream of revenue at a time when the demands on the public purse were ravenous, from its myriad ministries, agencies and departments.

He dismissed the objections of the Private Sector Organization of Jamaica, noting that in this instance, Government would provide healthy competition for suppliers of bottled water, ultimately driving down the final price to the consumer. Maybe that reasoning was good enough 30 years ago, when the minister studied in England and was answering an essay question on his economics exam about the role of government in competing with the private sector to sell finished goods to consumers.

Put it this way, the minister's reasoning is faulty. Rewind to July 2013 during a sitting of Parliament's Infrastructure and Physical Development Committee. Then NWC President Albert Gordon, under pointed questioning from then opposition member Pearnel Charles Sr, said, "Selling bottled water is one of the options we are looking at, both plain water and maybe also using localised fruit extracts.We have been in discussions with people from the university, so maybe we could export the flavoured water."

 

Sole supplier

 

I draw on that excerpt to show that the JLP has long been in love with the idea of the Government's sole water supplier bottling and selling the stuff to consumers. Crucially, Gordon told MP Charles, then the committee chairman, "We see the feasibility of doing it, but why we haven't moved in a big way is because we want to first assure Jamaicans who want water in their pipes that we have you as the top priority."

So Albert Gordon was wise and cautionary in his statement as MP Charles asked how the NWC, despite the award-winning quality of its water, was not commercialising the product. The now NWC boss, Mark Barnett, would do well to follow his predecessor's playbook and bring the entity to the point where it can provide consistent service to existing customers and any form of service to long-suffering folks whose taps have never tasted the liquid in decades, before engaging in fancy talk about developing new revenue streams by entering the bottled water market.

Imagine living in a country where droughts in 2014 and 2015 wrought serious damage to the agricultural sector, while teaching a new generation how to bathe out of a bath pan even as its rulers are contemplating selling bottled water when much of the country is one drought away from disaster.

I am tempted to say that the Holness administration is fiddling with nonsense and a potential industry killer by putting government water on supermarket shelves to compete with the private sector. But I can see the logic in it.

There's a firm used by several Fortune 500 companies to do syndicated research, customised research and consulting services in the USA, Transparency Market Research (TMR). In October last year, TMR forecast that the global value of the bottled water market in 2016 was US$170 billion. It projected, based on compound annual growth rate, that the value of said market would grow to about US$307 billion by the year 2024. No doubt, with the NWC under pressure to open new revenue streams to offset operational losses and contribute to the growth agenda, someone has been reading the TMR research, looking at the local bottled water market with its plethora of players and thinking that an opportunity exists to make easy cash.

Yes, I can see the logic in this plan. But like I told the minister then, the logic is flawed. And this is such a downright bad idea that whoever took it to Cabinet should wear a conical cap marked 'Temporary Idiot'.

Selah.

- George Davis is a broadcast executive producer and talk-show host. Email feedback to columns@gleanerjm.com and george.s.davis@hotmail.com.