Serbia possesses some of Southeast Europe’s most abundant and diverse mineral water resources, yet the country’s bottled water industry is increasingly warning that regulatory costs and market structure could limit the sector’s future growth. Producers argue that high state fees for the use of natural resources, combined with rising production costs and strong competition from multinational beverage groups, are narrowing margins in an industry that once represented one of the country’s most promising food and beverage export niches.
The debate intensified after industry representatives highlighted the impact of Serbia’s Law on Fees for the Use of Public Goods, which regulates the charges companies must pay for exploiting natural resources, including mineral and spring water. Under the current system, bottled water producers must calculate annual fees based on the volume of water sold during the previous year, after which payments are made in monthly installments throughout the following year.
For companies operating in a highly competitive beverage market, these resource charges have become an increasingly visible cost component. Producers argue that the fee structure raises production costs and places Serbian bottlers at a disadvantage compared with competitors in neighboring markets where water extraction fees are lower or structured differently.
The issue is particularly striking given the scale of Serbia’s water resources. The country is estimated to possess around 16 billion cubic meters of water of varying quality and usability, including a large number of mineral and thermal springs that have historically supported spa tourism and beverage production. Geological surveys have identified roughly 300 mineral water springs, yet only about 20 % of these sources are currently exploited commercially.
In theory, this abundance should provide a strong foundation for the development of a competitive bottled water industry. In practice, however, the sector remains relatively concentrated and dominated by a limited number of brands.
According to industry associations, Serbia currently has 24 registered companies engaged in bottled water production, but firms with foreign ownership account for approximately two-thirds of the domestic market. Several of the country’s most recognizable brands belong to multinational beverage companies that operate extensive regional distribution networks.
Among the largest players is Knjaz Miloš, historically one of Serbia’s flagship mineral water producers. The company bottles water from springs near the spa town of Aranđelovac and has long been associated with premium mineral water products distributed across the Balkans. Ownership changes over the past decade have connected the company to international beverage investors seeking to expand regional portfolios.
Another major brand is Rosa, bottled by Coca-Cola HBC Serbia, which forms part of the broader Coca-Cola bottling system operating throughout Central and Southeast Europe. The Rosa brand has achieved strong market penetration within Serbia thanks to Coca-Cola’s powerful distribution network and marketing capabilities.
Other domestic brands such as Voda Vrnjci, sourced near the well-known spa destination Vrnjačka Banja, and Mivela, a mineral water with distinctive magnesium content, also occupy significant segments of the market. Each brand reflects a different positioning strategy, ranging from functional mineral waters marketed for health benefits to premium natural spring waters targeting urban consumers.
Despite this diversity of brands, the industry’s overall output has recently shown signs of stagnation. Producers report that the sector delivered approximately 943 million liters of bottled water to the market in the most recent year, representing a 1.7 % decline compared with 2024.
Members of the Association of Natural Mineral and Spring Water Producers—representing nine of the largest companies—accounted for around 887 million liters of production, with exports reaching approximately 147 million liters.
Exports therefore represent roughly 15–20 % of total production, highlighting the sector’s growing reliance on regional markets. Neighboring countries in the Western Balkans remain the primary destinations, although Serbian brands have also established smaller distribution channels in Central European markets.
Export growth is particularly important for producers because Serbia’s domestic market, with a population of around 6.6 million people, offers limited room for expansion. Per-capita bottled water consumption in Serbia remains lower than in Western Europe, although it has gradually increased over the past decade as consumers shift away from sugary beverages toward water and low-calorie drinks.
Industry executives argue that export potential could be significantly higher if regulatory costs were lower and investment conditions more predictable.
The fee structure governing water extraction has become one of the most contested aspects of the regulatory environment. Under current rules, the charge applies not only to bottled water sold directly as mineral or spring water but also to water used as an ingredient in other beverages. When water is incorporated into soft drinks or alcoholic beverages, the fee is calculated based on the volume of water contained in the final product.
Producers say this approach effectively extends the water resource fee across the entire beverage value chain, increasing production costs for companies that use mineral water as a base ingredient.
From a policy perspective, the government has framed the fees as part of a broader effort to ensure that natural resources generate public revenue while encouraging responsible use. The concept reflects global trends in natural resource management, where governments increasingly seek to capture economic value from water, minerals and energy resources through royalties or usage charges.
However, the structure of these fees can significantly influence industrial competitiveness.
In countries such as Italy and France, where bottled mineral water has become a major export industry, regulatory frameworks are designed to balance environmental protection with industrial development. Companies such as Nestlé Waters, Danone, and San Pellegrino have built global brands around mineral springs located in Alpine regions where resource royalties exist but are typically structured to support long-term investment.
In contrast, producers in Serbia argue that the current fee structure does not adequately reflect the realities of the domestic market. Because the industry operates on relatively narrow margins, even modest increases in regulatory costs can have a disproportionate effect on profitability.
Energy prices represent another important factor shaping the sector’s cost structure. Bottled water production is not energy-intensive compared with heavy industry, but electricity and logistics still represent significant expenses, particularly for companies that distribute products across regional markets.
Transportation costs are especially relevant because bottled water is a heavy, low-value-per-kilogram product. For exporters, freight expenses can quickly erode profit margins unless production costs remain competitive.
The market’s ownership structure also influences the competitive landscape. Multinational beverage companies benefit from economies of scale and integrated distribution systems that allow them to absorb higher regulatory costs more easily than smaller domestic producers.
For local companies without such networks, regulatory fees can represent a larger share of total operating costs. This dynamic has contributed to concerns that domestic producers may gradually lose market share to international brands unless policy adjustments are introduced.
At the same time, the industry faces broader structural changes linked to evolving consumer preferences. Across Europe, bottled water consumption has been increasing as health-conscious consumers reduce their intake of sugary beverages.
According to European beverage industry data, the continent’s bottled water market exceeds €40 billion annually, with steady growth in premium mineral waters and functional beverages containing natural minerals or vitamins.
Serbia’s mineral springs could theoretically position the country as a niche supplier within this growing market. Several sources contain distinctive mineral compositions that could support premium branding strategies similar to those used by well-known European mineral waters.
However, developing internationally recognized water brands requires sustained investment in marketing, packaging, distribution and quality certification. Without scale and capital, many producers struggle to expand beyond regional markets.
Industry representatives therefore argue that regulatory policy should focus on encouraging investment rather than simply maximizing short-term revenue from resource fees.
A more balanced fee structure, they suggest, could stimulate new bottling projects, attract foreign investment and encourage the development of export-oriented mineral water brands.
Such changes could also support broader regional development goals. Many of Serbia’s mineral springs are located in rural or spa regions where bottled water production provides important employment opportunities.
Facilities built around mineral springs often include bottling plants, logistics centers and tourism infrastructure connected to nearby spa resorts. Expanding these activities could generate additional economic benefits beyond the beverage industry itself.
For policymakers, the challenge lies in balancing environmental protection, fiscal revenue and industrial competitiveness. Mineral water resources must be managed sustainably to preserve aquifers and protect water quality. At the same time, overly restrictive fee structures risk discouraging investment in a sector that could otherwise expand.
The debate over bottled water fees therefore reflects a broader question about how Serbia manages its natural resource economy.
From mining and agriculture to forestry and water resources, the country possesses significant natural assets that can support export-oriented industries. The key policy challenge is ensuring that regulatory frameworks encourage investment while maintaining responsible resource management.
In the case of bottled water, the outcome of this debate will likely determine whether Serbia’s mineral springs remain a largely domestic industry or evolve into a more internationally competitive beverage sector.
With hundreds of largely untapped mineral springs, a growing regional market and established brands already present, the underlying potential remains substantial. Whether that potential is realized will depend on how the country balances fiscal policy, industrial strategy and the long-term stewardship of one of its most valuable natural resources.
