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.