Price hike of bottled water, case against 7 companies
September 16, 20243 Mins Read

Jumbangla Desk: Famous companies of the country have increased the price of bottled water by showing various excuses. Profits of crores of rupees are being looted by cutting the pockets of consumers. By raising the price of half a liter of bottled water, the companies are making a profit of up to 420 percent. The government organization Bangladesh Competition Commission (BCC) found evidence of this in the investigation.

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BCC has filed a case against 7 influential organizations in these crimes. The companies are Coca-Cola Bangladesh Beverage Limited, Transcom Beverage, Meghna Beverage, Partex Beverage, Rupsi Foods (City Group), Akiz Food and Beverage and Pran Beverage Limited.

The case against the companies was confirmed by the member of the competition commission. Hafizur Rahman.

He said, after investigation, it is known that the institutions have increased the price of water by conniving themselves. Together they made 20 rupees for half a liter of bottled water. The companies are giving half liter water bottles to the vendors for 10 taka and the vendors are selling it retail for 20 taka. By doing this, they get a profit of 10 taka per bottle. Producers who try to sell at low prices are not able to survive in the market.

He said that every product needs a competitive market. A few firms cannot collude to fix prices. But in the case of bottled water, the companies have been sued for violating the law. The case is scheduled to be heard on 18th of this month.

According to the inquiry on bottled water, the first-line companies producing and supplying bottled water suddenly increased the price of a half-liter bottle of water from 15 to 20 rupees during the period from January to September 2023. According to the companies, the reason for this price increase is the increase in the dollar and the increase in the cost of imports.

However, analyzing the production costs of the companies, the bag cat comes out. The commission found that, despite the increase in nominal production costs, the profit of each company increased by 71.23 percent to 420 percent by raising prices. The profits of suppliers and retailers have also increased tremendously.

The commission investigated the production cost of a total of 8 companies including Dhaka Wasa. Among them, cases have been filed against 7 companies except Wasa.

According to the research report, one of the companies that have made extra profit by increasing the price of water is Okies Food and Beverage. It has been found that the company made a maximum profit of 420 percent by increasing the price of half a liter of water by Tk 5 under the Spa brand name. The company's profit increased by 420 percent despite the 18.33 percent production cost and 31.78 percent cost due to VAT-tax. Before the price hike, the retailer used to make a profit of Rs 5.62 per liter of Akiz water, which has increased to Rs 9 after the price hike.

Similarly, buying Coca-Cola branded 500 ml. Production cost of bottled water increased by Rs 1,624, which is 27.67 percent as a percentage and VAT-tax and supplementary duty increased by 33.85 percent. The company has increased their profit by 211.62 percent by increasing the price by Rs.5. In this, the profit at the distributor level increased by 30.13 percent and at the retail level by 26.98 percent.

The retailer used to make a profit of Rs 6.67 by selling a half-litre bottle of Keenle water for Rs 15, but now after increasing the price by Rs 5, the retailer is making a profit of Rs 8.47. The investigation revealed that the profit of Transcom Beverage has increased by 71.23 percent and the profit of Meghna Beverage Limited by 177.78 percent.

The Commission's observation said that Citigroup could not analyze its profit margin as Citigroup provided insufficient information and Pran did not provide any information.

Pertex Beverage increased the price of water but increased the commissions of distributors and retailers but did not increase the company's profits.

Besides, Dhaka Wasa's Shanti brand cheese production cost has not increased and they have not increased the commissions of institutions, distributors and retailers. By doing this, the company is also hitting the business. It is said that the retailers do not want to keep their water in the shops as the profit is low by selling water at 15 rupees.