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> Environment, economy weigh on bottled water sector | Special Coverage | Reuters

Reuters, By Emma Thomasson 29 October 2008

The world's top sellers of bottled water are trying to stop western consumers turning back to the tap by addressing environmental issues and trumpeting health benefits, while expanding aggressively in emerging markets.

Nestle, the world's biggest bottler of water with brands like Perrier and Poland Spring, said last week the economic slowdown and environmental concerns were hurting sales in western Europe and North America.

PepsiCo saw double-digit declines in the third quarter in its water brands, which include Propel and Aquafina, while Danone, with brands like Evian and Volvic, said demand had contracted in France, Spain and Britain.

Organisations like conservation group WWF have campaigned against bottled water, saying resources are wasted in bottling and transporting water which may be no safer or healthier than tap water while selling for up to a thousand times the price.

"It is a problem area for the whole industry," said Sarasin analyst Patrick Hasenboehler, citing downtrading risks as well as concerns over transport, packaging and water sourcing.

"When you have clean water at home it's one of the easiest ways to save money. For certain people it's become a bit trendy to drink tap water rather than bottled water."