Nestlé CEO says that water should not be a public right

[eran0004]

In an old video from 2005 that has recently been popping up all over the internet, former Néstle CEO Peter Brabeck (he stepped down in 2008) expressed his opinion that water is a foodstuff like any other and as such it should be privatized and given a market value, rather than having access to water being a public right. He added that specific measures could be taken for the part of the public that doesn't have access to water. Giving water a market value would, according to Brabeck, make everyone aware that water has a price.

​

My opinion on the matter is that although water is a precious resource whose value we should all be aware of, I wouldn't trust capitalism to be in charge of the water supply. Private companies can only be trusted for one thing, and that is the desire to make money. A competitive market might make sure that the price stays low, but on the other hand that could lead to many companies taking shortcuts like cutting down on the cleaning of the water (or the maintenance of the water cleaning facilities) to get a better profit margin or to be able to offer a better price.

But I can also understand the point that paying a market value for the water might make people aware of its price and be more careful with how they use it. The problem with that is that water is not an optional extra which you can chose wether you want to consume or not. While a human can survive without food for up to two months, going without water will have even the most healthy human killed in less than a week. That is why I think that access to water should be a fundamental human right and that it's the responsibility of the public to guarantee the supply.

The question of making people aware of the value of water can be done through education. Capitalism is not the answer here because that would only teach the poor people to save on the water and the rich people to spend as much as they please.

Please share your thoughts and opinions on this matter!

(Anecdote: I live in the north of Sweden where there's a lot of snow in wintertime, and last winter there was a man who was trapped in his car for two months. He had parked his car in a remote place to get some peace and quiet and he had food enough to last for two weeks. When he ran out of food he tried to go and buy some more, but his car was trapped in the snow and he couldn't get anywhere. Six weeks later he was found and taken to medical care, having survived all that time on just water from the snow.)

 

[PeterJB]

Typical capitalist. Doesn't give a damn about what everyone else has as long as he gets whatever he wants.

 

[NissanSkylineN1]

Typical capitalist. Doesn't give a damn about what everyone else has as long as he gets whatever he wants.

Don't be a typical communist.

 

[Lizard]

Is he saying we should pay for water?

As far as I know I already pay for water.

 

[Dean]

Honestly, he shouldn't have the right to water - even if he can pay for it. People need it to survive, so it shouldn't be a human (public) right to get water? That, I simply can't understand.

 

[Famine]

My opinion on the matter is that although water is a precious resource whose value we should all be aware of, I wouldn't trust capitalism to be in charge of the water supply. Private companies can only be trusted for one thing, and that is the desire to make money. A competitive market might make sure that the price stays low, but on the other hand that could lead to many companies taking shortcuts like cutting down on the cleaning of the water (or the maintenance of the water cleaning facilities) to get a better profit margin or to be able to offer a better price.

But I can also understand the point that paying a market value for the water might make people aware of its price and be more careful with how they use it. The problem with that is that water is not an optional extra which you can chose wether you want to consume or not. While a human can survive without food for up to two months, going without water will have even the most healthy human killed in less than a week. That is why I think that access to water should be a fundamental human right and that it's the responsibility of the public to guarantee the supply.

The question of making people aware of the value of water can be done through education. Capitalism is not the answer here because that would only teach the poor people to save on the water and the rich people to spend as much as they please.

Please share your thoughts and opinions on this matter!

Typical capitalist. Doesn't give a damn about what everyone else has as long as he gets whatever he wants.

Is he saying we should pay for water?

As far as I know I already pay for water.

Honestly, he shouldn't have the right to water - even if he can pay for it. People need it to survive, so it shouldn't be a human (public) right to get water? That, I simply can't understand.

You need to demarcate what is meant by "water".

This is water:

It falls out of the sky onto my property whether I want it to or not. It is free and I can capture it as I wish and do with it what I wish - even bottle it and sell it. Boo, capitalism.

This is water:

It's made by a company. They go to great expense to manufacture it, bottle it, store it and transport it, employing many thousands of people (who need salaries) along the way and they must ensure it meets several public health regulations - and can face multi-million dollar settlements if it does not. This all costs a lot of money and they are entirely entitled to request recompense for it. Boo, capitalism.

This is water:

It is captured from sources such as rainfall (through very, very large reservoirs occupying lots of expensive land) and effluent, requiring many millions of miles of expensive piping and sewers and it enters your home through copper piping (and leaves it through plastic/lead ones). This all costs a lot of money and in some countries that money is sourced from private enterprise (as haitch points out), whereas in others it's sourced from government/the taxpayer - largely meaning that those who use little water (let's call them "the water poor") are paying for those who use lots of water (let's call them "the water rich") to use lots of water. Boo, capitalism.


The first kind is a public right. The second is not.

The third seems to be what Mr Nestle is talking about... The money has to come from somewhere and it's either through people paying for what they use - which is efficient (demand can be predicted and met by knowing who uses what and when) and fair - or it comes through taxation - which is neither efficient nor fair (you pay for other people to use lots of water). The former creates sensible use and conservation (you watch what you use so you don't pay lots for it) while the latter creates profligacy and resentment (you use lots because you're paying a flat rate regardless of what you use).

Incidentally, the pipes getting the water into and out of your house and the taps (faucets) and sinks weren't free, were they?

 

[Dotini]

In a recent Oregon case, a citizen was arrested and prosecuted for collecting rain water.

Water is indeed an important resource, especially if it is fresh, clean and free of toxins.

The state, industries such as agriculture, fisheries, energy and mining have various claims, and mineral interest owning individuals may have claims which supersede claims or needs of ordinary individuals and citizens.

On a planet with 7 billion thirsty, needy people, there will be winners and losers.

It used to be said that the best things in life are free. But not water, not anymore.

Respectfully,
Steve

 

[F1GTR]

Companies make enough money out of bottled water as it is. I do understand that there are transport and processing costs, but the markup on bottled water is insane (and that's going off of secondary wholesale trade prices selling to retail, not straight from the company itself). Having said that, using a utility run by others should be paid for (which is very different from paying for the water itself). All the other problems (price, quality of service) can be taken care of via regulation. It's like paying for internet access.

 

[Famine]

In a recent Oregon case, a citizen was arrested and prosecuted for collecting rain water.

Indeed - though I recall it was for a slightly different charge of diverting the water supply.

The irony of that particular case being that it's Oregon state law that... all water is publicly owned and you need a permit to store it

Companies make enough money out of bottled water as it is. I do understand that there are transport and processing costs, but the markup on bottled water is insane (and that's going off of secondary wholesale trade prices selling to retail, not straight from the company itself).

Indeed it is. There are bottled waters out there more expensive than petrol/gasoline - and since that runs £1.40 a litre here, that's quite impressive.

But it's still an opt-in product. If you like your water that clean, you have to pay for it - just like if you like your water as clean as it comes out of the tap.

Having said that, using a utility run by others should be paid for (which is very different from the water itself). All the other problems (price, quality of service) can be taken care of via regulation.

Regulation isn't strictly necessary, but yes.

 

[Dean]

You need to demarcate what is meant by "water".
[...]
This is water:

[...]

Incidentally, the pipes getting the water into and out of your house and the taps (faucets) and sinks weren't free, were they?

I was talking about the above. It might cost a bit, but it can save lifes in places with "dirty" water. Isn't it worth it then? In other words; should we put a price tag on people's life? No, we shouldn't.

Of course water costs money. So does the pipes, sinks, etc. We (I don't know about other countries, but Denmark) pays millions, even trillions of kroner (1 DKK = ~ $0.175 USD) each year, going to Africa (and other countries - we call it "ulandsbistand" or "ulandshjælp" - translated, they both mean "third world (foreign) aid"), so why can't those money be used, when we ("rich" countries) can pay, and they can't?

 

[G.T.Ace]

The third seems to be what Mr Nestle is talking about... The money has to come from somewhere and it's either through people paying for what they use - which is efficient (demand can be predicted and met by knowing who uses what and when) and fair - or it comes through taxation - which is neither efficient nor fair (you pay for other people to use lots of water). The former creates sensible use and conservation (you watch what you use so you don't pay lots for it) while the latter creates profligacy and resentment (you use lots because you're paying a flat rate regardless of what you use).

Incidentally, the pipes getting the water into and out of your house and the taps (faucets) and sinks weren't free, were they?

We already pay for mains water, but we don't pay a large private company like Nestlé, we pay our city for this, because they provide it. Privatizing water supplies doesn't work, which was already proved in France for example, where the water quality got destroyed and the prices got ridiculously high in some places.

 

[Ibonibo]

That's quite *Wow*, I bet he didn't make friends with normal mortals.

What next, pay for air?

Somehow he is right, but how he says it is just mind boggling. It's because of people like that that we have economics crisises, because he can't get his mouth full enough.

But what do you expect from Nestle. They managed to sell coffee for a few 100 bucks a kilogram (Nespresso) or now charge enormous sums for tea.

Honestly there is capitalism and hyper capitalism. And I personally hope there is a hell where all these greedy people land and get .....

I don't know how it is everywhere, but here we have ground goods (water, bread, ....) that are kept under wraps price wise as they are essential to life

This makes me want to go to my kitchen, take my nespresso machine, drive to Switzerland and shove it in this guys face

 

[Famine]

I was talking about the above. It might cost a bit, but it can save lifes in places with "dirty" water. Isn't it worth it then? In other words; should we put a price tag on people's life? No, we shouldn't.This is

Of course water costs money. So does the pipes, sinks, etc. We (I don't know about other countries, but Denmark) pays millions, even trillions of kroner (1 DKK = ~ $0.175 USD) each year, going to Africa (and other countries - we call it "ulandsbistand" or "ulandshjælp" - translated, they both mean "third world (foreign) aid"), so why can't those money be used, when we ("rich" countries) can pay, and they can't?

Aid is charity. So now your argument is that charity - private enterprise - supplies clean, safe water to third world nations better than their own governments do...

We already pay for mains water, but we don't pay a large private company like Nestlé, we pay our city for this, because they provide it.

Who pays for the specific amount you use? Is it you, or do you overpay - paying other people to use more water than you do - or underpay - being paid by other people to use more water than they do?

Privatizing water supplies doesn't work, which was already proved in France for example, where the water quality got destroyed and the prices got ridiculously high in some places.

That doesn't make any sense at all. How can prices be high if the water quality is poor? Surely people wouldn't be willing to pay higher prices for a poorer service?

That's the very nature of competition. You don't sell your product unless it's better or cheaper than someone else's - and you sell bloody loads of it if it's both. For people to buy a poorer, more expensive product they either have to be tied into a monopoly (like, for instance, government) or stupid. And say what you like about France, but the French are not a people known for allowing tyranny from any sector.

What next, pay for air?

What exactly do you think SCUBA divers do?

 

[Dean]

I guess I used the wrong word before... Neither "ulandsbistand" nor "ulandshjælp" is considered charity in Denmark . I haven't got a better describing word, than development- or foreign aid, sadly .

Edit: Wikipedia, tells me that it is called development aid. The Danes pays for multilateral "donations". Still, it isn't considered a charity, here.

So now your argument is that charity - private enterprise - supplies clean, safe water to third world nations better than their own governments do...

Well, I believe the governments does everything they can, - but it can't be enough, if NGOs like UNICEF (and private enterprises) has to give "donated" water (etc.) to the counties. - I can't answer if the private enterprises does it better, than the governments, since I have a very limited knowledge on that subject.

 

[Ibonibo]

^Scuba is a luxury sport, just as eating caviar is. you don't need it to survive. Drinking water is essential to survival.

I have no problem with Nestle asking the 20 fold price for coffee (Nespresso) as it is a luxury good. But water is something different.

He is the finest of hypercapitalist, who been responsible for what we endure nowadays market wise.

Why always make more profit, be the first, get bigger??

Isn't it enough to have a healthy company which give a life ground to X people, and just is healthy market wise?

He complains about European complaining about gen-mod food. Do you seriously believe we would correlate illnesses to it. How would we do that?
Than he brags about his number of employees than brags about the plants beeing automated without having people.

While I am all for capitalism (those who work more, should get more) but I am so against the hyper capitalism of nowadays, because it is not sustainable.
There is always a frontier that will break you, so hypercapitalism is in the long term not doable, at least not in a moral or legal way

 

[Zenith]

^Scuba is a luxury sport, just as eating caviar is. you don't need it to survive. Drinking water is essential to survival.

Refer to Famine's first post. It is not the water that you are paying for, it's the pipes and facilities that are necessary to bring it into your home.

Why should taxes be spent on those pipes and facilities when private industries would do it better and charge a more fair amount?

 

[Ranman20]

Interesting thread. I'll contribute later.

 

[Ibonibo]

You seriously believe a private company, who is after money will ask less than a goverment?

We have a multitude of movies (as fictional as they might be) that show how bad privatising on life necessary products can become

 

[MetroGS]

That's quite *Wow*, I bet he didn't make friends with normal mortals.

What next, pay for air?

If I remember correctly some crazy people in parliament tried to make a 'Oxygen Tax' but it was swiftly thrown out of the courts!


The fools!

 

[Famine]

I guess I used the wrong word before... Neither "ulandsbistand" nor "ulandshjælp" is considered charity in Denmark . I haven't got a better describing word, than development- or foreign aid, sadly .

Edit: Wikipedia, tells me that it is called development aid. The Danes pays for multilateral "donations". Still, it isn't considered a charity, here.

You used the right word, you just didn't consider the implementation.

Where does the money go when it leaves Denmark? Does it go to the governments of countries like Somalia and Sudan or does it go to aid organisations - charities - working there?

^Scuba is a luxury sport, just as eating caviar is. you don't need it to survive. Drinking water is essential to survival.

Drinking purified water is not. Drinking purified water that comes out of a special device routed into at least two rooms in your house (is a house a luxury or essential to survival? Who should pay for it if the latter?) from a large industrial facility many tens of miles away via very expensive infrastructure is not either.

You seriously believe a private company, who is after money will ask less than a goverment?

A private company which is after money and in competition for this limited pile of money with other companies and has to make a product that is competitive enough to acquire that money or face going out of business "asking" less than a monopoly that takes your money by force and then simply prints more of it and will never go out of business? No, how could that happen...?

We have a multitude of movies (as fictional as they might be) that show how bad privatising on life necessary products can become

And from where do you get your clothes and food? And to whom do you sell yourself?

 

[Zenith]

You seriously believe a private company, who is after money will ask less than a goverment?

A private company, no. The free market, yes. Think about competition. Since delivering water is such a simple service, prices would be driven to bare minimums. Furthermore, if we paid for cell phone service the same way we pay for water, you would have to foot part the bill for Cheyanne's 2000 texts per month. It makes more sense from a marketing and fairness standpoint to have each person pay for how much of the system they use.

We have a multitude of movies (as fictional as they might be) that show how bad privatising on life necessary products can become

Gawrsh, good thing clothing and food isn't controlled by private industry.

 

[Dean]

You used the right word, you just didn't consider the implementation.

Where does the money go when it leaves Denmark? Does it go to the governments of countries like Somalia and Sudan or does it go to aid organisations - charities - working there?

I believe, both, actually. I don't know, but I'll try searching around for an answer.

Edit:

Denmark gave 74% bilateral and 26% multilateral, in 2011, which is the newest numbers available.

 

[F1 fan]

Interesting thread. I'll contribute later.

I await your reply with great interest and enthusiasm.

 

[Ibonibo]

A private company, no. The free market, yes.

In an ideal world.

Free market is so screwed thanks to lobbing.

Look at the argiculture market. It's no market directed by free and natural factors. We burn millions of tons of foods to keep the price up. (probably enough to end famine (not the mod ) )
Privatising the medical sector has also proven to not be the best idea for the majority of the population.

Look at the pharma market.

Threre are so many exemples that companies will try everything to scew the free market in order to make more money.

If water would get privatised, they first make sure you can't have an alternative than them, after that the prices will climb.

If the free market would still exist we wouldn't have saved one bank in the current crisis...

Someone gave the exemple of telecommunication: one text message cost a company around 1 cent, yet we pay the 200% price of that at the cheapest...

Free market: you get electricity for a price X, yet if you produce electricity you only get X-n% from the company. Free market...

 

[Famine]

Look at the pharma market.

Okay.

To get any new drug to the market costs something in the order of $1.5bn. It depends somewhat on the complexity and certain new forms of drugs can fudge some of the trials stages, but it's generally anywhere from $500m to $2bn. This is just research and development and trials. Marketing, manufacture and distribution add to it.

It doesn't really matter whether the drug is a new topical painkiller that housewives will pop like paracetamol (acetaminophen) or a treatment - or cure - for a phenomenally rare disorder, it'll put the pharma company out $1.5bn to create.

But let's say it's a cure for a rare disease - like fibrodysplasia ossificans progressiva (FOP). This affects about 3,500 people on the planet. They take one pill and they're cured. Either the pharma company charges your healthcare provider $430,000 for that one pill, or they make a loss. What healthcare provider is going to pay $430,000 for one pill?

So, you evil captalist pharma company will make a loss. Obviously the CEO and shareholders won't stand for this, so no research is ever conducted into curing FOP. Right? Right?

*crickets chirping*


Oh, and then their patent expires after 10 years and the market is flooded with generic copies of it selling at 2 cents a pill. Forgot about that part.

You can pick up sufficient quantites of acetaminophen/paracetamol in an evil capitalist shop for $2 to cure every headache you will ever have - or to kill yourself 37 times over - and yet the pharmaceutical industry is broken?

 

[eran0004]

This is water:
[Water running from a tap]

It is captured from sources such as rainfall (through very, very large reservoirs occupying lots of expensive land) and effluent, requiring many millions of miles of expensive piping and sewers and it enters your home through copper piping (and leaves it through plastic/lead ones). This all costs a lot of money and in some countries that money is sourced from private enterprise (as haitch points out), whereas in others it's sourced from government/the taxpayer - largely meaning that those who use little water (let's call them "the water poor") are paying for those who use lots of water (let's call them "the water rich") to use lots of water. Boo, capitalism.

[This] seems to be what Mr Nestle is talking about... The money has to come from somewhere and it's either through people paying for what they use - which is efficient (demand can be predicted and met by knowing who uses what and when) and fair - or it comes through taxation - which is neither efficient nor fair (you pay for other people to use lots of water). The former creates sensible use and conservation (you watch what you use so you don't pay lots for it) while the latter creates profligacy and resentment (you use lots because you're paying a flat rate regardless of what you use).

Incidentally, the pipes getting the water into and out of your house and the taps (faucets) and sinks weren't free, were they?

Of course it's not free, but there is a difference in how you pay for it. In a free market everyone pays the same price, which for the poor people is a lot higher in relation to their income than what the rich people pay. In a tax funded system everyone pays in relation to their income, effectively in relation to their existence. Since water is fundamental for your existence, I believe that the cost of the supply should be in relation to what you have.

The problem with that is that you don't get a feeling for what you're paying for, and I think that is what Herr Brabeck was referring to when he called that view for extreme: You can use as much water as you'd like without paying more.

The way I see it though is that the problem is not that you don't pay more, the problem is that you're using water without care for its value. Suppose that you'd have to pay for every liter of water you use, that would not take away the over-use of water. It would only take it away from the poor people, while it's telling the rich people to go ahead and use whatever they want. It would probably work pretty well to reduce the over-consumption of water, but it would be unfair and basically be handing over the responsibilities of making a sustainable world to the poor people.

 

[Famine]

The way I see it though is that the problem is not that you don't pay more, the problem is that you're using water without care for its value. Suppose that you'd have to pay for every liter of water you use, that would not take away the over-use of water. It would only take it away from the poor people, while it's telling the rich people to go ahead and use whatever they want. It would probably work pretty well to reduce the over-consumption of water, but it would be unfair and basically be handing over the responsibilities of making a sustainable world to the poor people.

Do rich people become rich by wasting their money on resources? If anything, pay-for-use reduces use by the wealthier - unless they see some benefit from paying more (like toll roads, which are often quieter and quicker than non-toll routes) - because they will end up paying the most.

It's unfair to "ask" someone to pay for something they don't use, regardless of their income. Tax-funded utilities "ask" everyone to pay for a resource regardless of their use of it - fundamentally the least fair method of all.

 

[Ibonibo]

^You took my least founded argument. So I explain what I meant or why I put that there
I rather meant what the free market means for pharma's than the cost to getting a med into circulation.

By that I meant look where they now test their meds for increased profits. Or where they sell meds that are long forbidden in the industrial world, to still make profit of a basiclly bad product.

I know it isn't all black or white, but if we would elaborate every single aspect of the arguments we throw in here, we won't find an end. Especially in this sector as it is one of the more complicated ones, but let's be honest, pharma industry isn't a charity, granted, but it's not like they wouldn't make any profit even with the above said.

And I don't even want to know what "dead bodies" pharma companies have in their basement we don't even know about. We saw a small percentage of what banks do in the shady businesses...

 

[eran0004]

Do rich people become rich by wasting their money on resources? If anything, pay-for-use reduces use by the wealthier - unless they see some benefit from paying more (like toll roads, which are often quieter and quicker than non-toll routes) - because they will end up paying the most.

It's unfair to "ask" someone to pay for something they don't use, regardless of their income. Tax-funded utilities "ask" everyone to pay for a resource regardless of their use of it - fundamentally the least fair method of all.

Rich people can become rich for many different reasons, very few of them actually includes being careful with money. Once they get rich, they do tend to brag about it by getting expensive stuff, a lot of which are catastrophic for the environment in one way or another. Just take gold for an example, it's not just expensive because it's desirable, it's mainly expensive because it's so hard to get hold of. The average amount of pure gold in gold ore is so small that in order to get one cubic centimeter of pure gold you'd have to process 4.77 cubic meters of ore. Apart from the destruction of the landscape and its wildlife that comes with excavating the ore, the process of extracting the gold from the ore also includes hazardous chemicals that (speaking of water) more than once has leaked out into the water supply and poisoned villages and towns.

Pay-for-use reduces the use from the poor people, because in relation to their economy it is a huge cost. For the rich people, pay-per-use has no effect what so ever, because for them the tiny amount of money they'd have to pay doesn't have any effect on their economy. In fact, pay-per-use can even have the opposite effect, as that would make water a status symbol. Similar to when rich brats go to the restaurant, ordering the most expensive champagne and then telling the waiter to pour it out in the sink - only to show off that the money they just spent on the most expensive champagne doesn't mean anything to them because they're so rich. But perhaps that's just a Swedish phenomenon (it's even got a word, "vaska" in Swedish).

The only way par-per-use would work is if it was related to the income, but then it would be like a tax, wouldn't it?

 

[G.T.Ace]

Who pays for the specific amount you use? Is it you, or do you overpay - paying other people to use more water than you do - or underpay - being paid by other people to use more water than they do?

I pay the amount of water I use. There's a counter which measures how many water you used and you have to pay it every three months together with stuff like trash etc. I don't quite understend what you mean.

That doesn't make any sense at all. How can prices be high if the water quality is poor? Surely people wouldn't be willing to pay higher prices for a poorer service?

Because there's no competition in certain regions and some companies like to make illegal deals (oh how shocking). Like I wrote, it was tested and it didn't work out.

That's the very nature of competition. You don't sell your product unless it's better or cheaper than someone else's - and you sell bloody loads of it if it's both. For people to buy a poorer, more expensive product they either have to be tied into a monopoly (like, for instance, government) or stupid. And say what you like about France, but the French are not a people known for allowing tyranny from any sector.

If a company like Nestlè has control over water supplies in certain regions, you won't see any competition there. Even if there are different companies involved, they'll all be a part of one, big company, which will control the market.

I don't know if "Water Makes Money" was ever translated to English, but it's a damn good documentary you should watch.