Observing the bottled water as hazardous for human health, the chief justice expressed displeasure on the mineral water companies for extracting the water without paying the amount to government.
During the hearing, Punjab’s law officer informed that the government is considering to fix the cost on extraction by water companies.
During the hearing, the CJ also observed that the owners of water companies are approaching the high-ups for fixing Rs10 cost per litre.
Meanwhile, an audit report regarding Nestle Pakistan was submitted before the bench.
The sold water is 2.515 billion litres while 1.916 billion litre making 46 per cent.
69.46 per bottle provided by WASA, Faisalabad plant.
“The audit team is also seeking cost data from other leading bottled water companies like Pepsi Co, Coca Cola, Sufi, Gourmet and Qureshi etc for comparative analysis of cost of bottled water products.” Analytically that total fixed costs of Nestle Bottled Water business were Rs14.34 billion against total costs of Rs34.288 billion in last five years which ranged from 40per cent to 47per cent of total cost.
The fixed cost appears to on higher side and is a major factor to affect the profitability of Bottled Water business as well as consumer.
The view of audit team is that distributors and retailers margins are very high as compared to Nestle’s earnings and seems unjustified.
Last five years analysis depicts that in 2016 total sales discounts were 183.10per cent of net profit earned, 258.46per cent in 2015 and 347.640 per cent in 2014 which seems excessive and unreasonable.