Water: More expensive than milk, soft drink and petrol

Bottled water is a premium product these days. According to consumer group Choice, you can pay upwards of $3.88 a litre for bottled water, while a litre of tap water in Sydney costs a fraction of a cent.

At current prices, water costs twice as much as premium grade unleaded petrol, is more expensive than premium milk and costs as much as soft drink. Over time, the costs can add up. If you drink two litres of bottled water a day, consumers could be looking at costs of $2,800 a year. Drinking two litres a day from the tap costs around $1.50 a year.

Much of the cost of bottled water comes from producing the plastic bottle, lid and label, and the environmental costs are high. Although the Australian Bottled Water Institute (ABWI) says all plastic bottles are made from recyclable material, less than half of those PET plastic bottles are actually recycled, with 60% going straight to landfill, according to Choice.

Choice also states that US-based policy research organisation, The Pacific Institute, estimates that twice as much water is used in producing the plastic bottle as there is in the bottle itself.

Clean Up Australia says that plastic bottles are among the top 10 most common rubbish items picked up on Clean Up Australia Day, and actively encourages people to avoid bottled water and buy a reusable bottle.

For producers of bottled water, including Coca-Cola Amatil (ASX:CCL) and supermarkets Woolworths Limited (ASX:WOW), Coles – owned by Wesfarmers Limited (ASX:WES), and Metcash (ASX:MTS) supplied IGA stores, the bottled water industry is estimated to be worth $500 million a year. World consumption of bottled water is estimated to have doubled in the past decade, and market researchers Canadean predict bottled water will overtake carbonated drinks as the leading drink category by 2015.

Foolish takeaway

According to Choice, bottled water probably doesn’t trump tap water in terms of quality. But it seems society and the planet are paying for our love of water that comes in little plastic bottles.

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Motley Fool writer/analyst Mike King owns shares in Coca-Cola Amatil and Woolworths.

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