Water Business!

Let’s talk about one of the most important consumer items — water, or more precisely bottled water (be it still, reverse osmosis or whatever fancy term marketers use to describe water). I honestly feel that the price of water can be mind boggling, and it should be standardised across restaurants, malls, airports, hotels, and any other retail outlets.

At this point of time, I don’t think restaurants and hotels are currently bound by a pricing cap when they sell bottled water to consumers.

For the past few years, I started to drink water instead of other beverages as I am trying to cut down on my sugar intake. So, whenever I dine at a restaurant, I opt for water – mineral or still.

From my experience when dining outside, certain establishments can get away with charging exorbitant amounts for water. And I can’t help but wonder why water can be overly priced, and how much profit these restaurant owners make by just selling bottled water.

Hotels charge over RM15.00 for a bottle of mineral water (250ml). Ok, fine, I’ll be the first to admit that the water came in a very fancy looking bottle. And depending on your preference, they’ll also throw in a slice of lemon to make it look fancy. But, still it is extremely overpriced. Come on, it’s just water!

Normal restaurants charge between RM3.50 to RM7.00 per bottle, and that is depending on where the restaurant is located.

For the very same product – I mean, the exact same brand can be purchased from as low as RM0.70 from convenience stores. And the price goes lower if purchased at wholesale outlets. I once bought mineral water from a local hypermarket for RM0.35 per bottle. Yes, you read correctly, RM0.35! 

I am pretty sure business owners are resourceful enough to get their supplies directly from manufacturers, at cost price and sell it at any price they wish. Let’s just say they bought it for RM0.35 per bottle, they would have made a profit of RM0.65 per bottle if sold for RM1. Now imagine those who sold it for RM5 per bottle! 

I spoke to a number of people in the consumer business industry just to get their general feedback and almost everyone said that water is overpriced, and it is indeed the best form of income for these businesses. Just think about it, when was the last time you didn’t order water when you went out for a meal. 

I also found out that locally produced bottled water usually comes from the same source and goes through the same process of distilling. The only difference is the brand. Anyone can come up with a brand and arrange for a special packaging. The price is obviously determined by the brand owner and if they want to tap into the luxury market, they can sell at a higher price. 

Since this topic is about excessive profiteering, I must also point out another thing that has been on my radar for quite some time. Why are prices at airports generally more expensive? All items (including bottled water) skyrockets when they are sold at airports.

Many F&B outlets charge extra at airports too. And many promotions, coupons or and form of special price are never applicable at the airports.

I was told that airport prices should be more expensive due to the simple case of “supply and demand” – shop owners can charge higher prices on foods and goods and operate with higher margins due to the expensive cost of operating a retail outlet at an airport. Some also said there are only few choices and limited selections, so, the retailers can charge more than the usual price.

I don’t agree. There shouldn’t be a difference between the cost of operating at an airport and operating at prime shopping malls such as Pavilion, KLCC or Mid Valley. And plus, airports have sizeable foot traffic. Why should the consumers be short-changed?

And before you start bombarding me with snarky comments and replies about AirAsia’s on-board pricing, please note that transportation companies such as train, busses, airlines and ships can charge more than retail prices because there is an actual cost incurred to carry the products on board. Weight of the items loaded on the respective vehicle affects the amount of fuel the vehicle burns to move that said item. There is also a weight limit.

PS : For the record, Pendang mineral water is sold for only RM4 per bottle (350ml) on AirAsia flights.