Now would be a good time for foreign bottled water makers to expand in China. Chinese residents, familiar with the country’s many contaminated waterways and nervous about tap water, have been sending sales of bottled water up for years. Domestic and foreign brands like Switzerland’s Nestlé or China’s biggest drink maker Wahaha Group have benefited.
But regulation is lax for China’s bottled water industry, according to the Beijing News (article in Chinese.) The country is still using standards borrowed from the Soviet Union, over 20 years ago, to test the safety of bottled water samples, an expert at the Institute for Environmental Health and Related Product Safety told the paper. The report also said that tap water is subject to 106 national standards but bottled water only has to meet 20. Officials said the difference isn’t cause for worry because local authorities also set standards.
But that’s little comfort after one of the country’s largest bottled water manufacturers, Nongfu Spring, recently came under fire for having a bottling plant near a dump and for using local standards that allowed for amounts of arsenic and cadmium higher than levels permitted under national law.
China’s demand is growing regardless. Sales jumped of bottled water in China went from $1 billion in 2000 to $9 billion in 2012, according to Euromonitor. The research firm expects sales to reach $16 billion by 2017. (They’ll stay flat in Europe, but rise about 18% in North America to $26 billion, Euromonitor estimates.)
And as China’s middle class expands in second- and third-tier cities, more Chinese will be converting to bottled water. There’s not yet a run on non-mainland bottled water in Hong Kong or other countries like there’s been with milk formula, but domestic bottlers at least face some rough waters ahead.