Even well-known bottled waters have experienced price increases, but these hikes are not as steep as those seen across the entire category of branded waters.
According to data from cenoteka.rs, the price of regular bottled water ranges from 58 to 85 dinars for a standard 1.5-liter PET bottle.
At first glance, one might attribute these rising prices to increased production costs, but that isn’t entirely accurate. In producing PET bottles, the primary costs come from three main components: the preform (a test tube that is molded and blown into a bottle), the plastic cap, and the label. Additional expenses include production costs, particularly energy, labor, maintenance and overheads.
In mass production, the prices of these basic inputs largely determine overall costs. The cost of preforms has actually decreased over the last two years, thanks to a stabilized granulate market, now ranging from 3 to 7.5 dinars each. The costs for labels and caps are minimal when produced in bulk, typically just a few dinars each. Additionally, there is a charge for water extraction, which is about 1.5 dinars per liter. Consequently, the total production cost for a 1.5-liter bottle is around 15 to 20 dinars.
For smaller bottle sizes, like 0.5 and 0.33 liters, production costs are lower, yet retail prices do not decrease proportionately. This means that most profits come from these smaller formats. When comparing production costs (though we should also consider transport expenses, which significantly impact 1.5-liter bottles), it becomes evident that profits per bottle exceed 40 dinars. This profit is split among manufacturers, distributors, and retailers, with major retail chains claiming the largest share due to their control over shelf space.
Margins are just a small part of the overall earnings. While many argue that margins are relatively low, the non-market benefits derived from bargaining power at the retail level are substantial.
Ultimately, consumers bear the brunt of these costs, influenced by aggressive marketing campaigns over the years. A comparison of water prices to other products—such as oil or milk—highlights the absurdities and discrepancies in the market.
In Serbia, water has transformed into a symbol of prestige and luxury, despite the country facing no significant drinking water issues, unlike regions in Africa or Asia.
Globally, the water pricing scenario can be perplexing. Data from numbeo.com reveals average water prices per country as of August, showing Costa Rica with the highest price at 249.11 dinars for 1.5 liters. In contrast, countries facing water shortages, like Egypt and Libya, have the lowest prices, primarily because municipal water is often unsuitable for consumption.
Interestingly, there’s not a straightforward correlation between water prices and national income levels. Even some lower-income countries, such as Ecuador and Cuba, have high water prices due to factors like available reserves and supply capabilities.
In Serbia, the bottled water market is largely influenced by the income levels of approximately one-third of the population, based on overall water consumption, household numbers, and annual consumption patterns.
