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#BottledWater #RisingCosts #PETPrices #Petroleum #Ethiopia #SupplyChain #ExciseTax #WaterIndustry #PlasticPrices #DemandStrong
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Ethiopia’s bottled water industry—comprising over 110 plants with a combined annual capacity of 9.75 billion liters and supporting more than 124,000 direct and indirect jobs—is facing a severe cost crisis that threatens both production sustainability and consumer affordability. Rising petroleum prices have inflated production and distribution expenses, while frequent power outages force plants to operate costly generators. Compounding these issues, PET plastic prices have skyrocketed from $800–900 to over $1,600 per cubic metre, driven by Middle East conflict, freight, and import costs. Logistics are further constrained by truck weight limits, reducing capacity and raising per-unit distribution costs.
Companies such as Debre Birhan Natural Spring Water and Geranba Bottling Plc report operating with little to no profit, as revenue barely covers escalating logistics and input costs. Despite strong market demand, manufacturers struggle to meet urban needs, with Ambo Mineral Water previously leading the sector. The crisis has drawn regulatory attention: the Addis Abeba City Trade Bureau has stepped up enforcement of wholesale price disclosure and retail price monitoring, giving non-compliant plants just two days to comply.
Industry leaders argue that price caps ignoring real production costs amount to a “death sentence” for businesses. They advocate for policy shifts, including repeal of the 10% excise tax on drinking water (cited as a necessity, not a luxury), addressing exploitative intermediary markups, and stabilizing input costs rather than restricting producer prices. With input chain intermediaries reportedly squeezing margins without adding value, and retailers earning significantly higher per-bottle margins than bottlers, the sector calls for cost-focused reforms to ensure long-term viability.
