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E-M:/ Nestle responds (annotated version)

Let the spin begin! Mine is in italics.

Dave Dempsey



Statement from Nestle Waters: Conditions of Water Use Permits Raise Questions for Michigan Businesses, Environment and Economy
Friday May 27, 4:11 pm ET

LANSING, Mich., May 27 /PRNewswire/ -- The following statement should be attributed to Kim Jeffery, president and chief executive officer of Nestle Waters North America, parent company of Michigan-based Ice Mountain Spring Water Company. The statement responds to Governor Granholm's decision today to impose detrimental measures on Michigan's bottled water industry and Nestle Waters' Michigan operations.

The Granholm Administration today issued a series of water use permits to the City of Evart and Nestle Waters allowing Nestle Waters to purchase water from the City of Evart, much as other beverage and bottled water producers do in other Michigan cities. However, in an unprecedented move, the Governor imposed a condition on those permits requiring Nestle's Ice Mountain bottled water products to be distributed to customers only within the boundaries of the Great Lakes Basin. This puts the bottled water industry in Michigan at an unfair disadvantage to all other beverage producers in and out of state.

Governor Granholm also announced a moratorium on Michigan's bottled water industry, saying that no water use permits would be granted to bottled water beverage companies seeking to expand or site new facilities in the state.

These measures not only raise serious concerns for all Michigan water users, they trample the rights of Michigan's municipal water departments.

This is an outrageous spin. And it is dead wrong. There is an enormous social and legal distinction between public utilities that may bottle a tiny percentage of their capacity for local consumption, and a gigantic special interest that bottles virtually all of its capacity for sales far outside the local area.

Statement by Kim Jeffrey

"The Governor's decisions today severely restrict the ability of Michigan's bottled water industry to grow, compete in the marketplace and contribute to the economic well-being of the communities in which they operate. These conditions are unfair and discriminatory.

This assumes bottled water is just like any other use of water. Far from it. It is an attempt to capture public water for private profit, and is thus separate and distinct and needs to be treated as such.

"Bottled water companies, as a group, use a miniscule amount of Michigan's groundwater - 0.06 percent (6/100 of 1 percent). Limiting the growth of this healthy, clean industry that provides healthful products is a disservice to the hundreds of bottled water employees in the state and the millions of bottled water consumers.

 The question, at this time, is not the amount of water that is being used by bottlers -- although the proposed Evart project would ultimately drain as much water as would the infamous Nova Group export of 1998. The issue is private ownership of public water.

"The decision to dictate conditions on the sale of bottled water and place a moratorium on any future water use also sidesteps the real issue regarding meaningful public policy for water resource protection. It discriminates against a single industry that practices sound environmental management practices and places good Michigan companies at a competitive disadvantage and jeopardizes both existing and potential jobs and investment for the state. Other economic benefits associated with this industry, namely tax revenues for schools and local services, and community giving are also potentially sent elsewhere.

Nestle has chosen to discriminate. Rather than use water in accordance with Michigan's traditions and centuries of common law precedent, Nestle has chosen to separate itself from other users by trying to cash in on nature's endowment. This simply cannot be condoned.

And who said anything about placing a moratorium "on any future water use"?

Using words like "dictate" is a cheap rhetorical device. The state is not dictating, it is protecting and conserving.

"We are currently evaluating the implications the condition may have for our business. We are also exploring legal options available to remedy this untenable situation and protect our Ice Mountain business and employees in Michigan and our wholesale and retail customers in the Midwest.

"Nestle Waters agrees that Michigan's water use laws are not strong enough. We have actively participated in a process to improve those laws, which would protect the resource and bring certainty to our business and every other Michigan manufacturer, municipality and resident that uses water.

If Nestle was serious about this point, it would not have sought to capture and sell public trust waters until a statute was passed. Instead, it tried to exploit a gap in Michigan law.

"For Michigan, whose major economic advantage over other states is its water resources to choose winners and losers of water use will lead down a path of negligence in resource protection. Whether you're talking about golf courses, farmers, manufacturers, beverage makers, electricity producers or water bottlers: the fact is the water is being used. We would hope Michigan lawmakers take action to ensure water use policy is aimed at resource protection that is fairly applied to all users and based on scientific principles.

There is only one loser in today's developments -- Nestle and those who, like it, want to capture public trust waters for private profit. No traditional users are affected by the moratorium nor should they be, as they are acting in accordance with common law principles.

Nestle's attempt to blur the distinctions between its radical new exploitation of Michigan water and traditional water uses practiced by golf courses, farmers, beverage makers and others is a gross disservice to the public debate, and should fool no one.

"Superficial, marketing-based measures are not helpful in protecting resources; the real effect is to put Michigan companies at a disadvantage to other competitors and lose the prospect of more clean jobs in the state."