Water producers halt production

About 20 bottled water producers have stopped their production as a result of shortage and price hike of materials according to information Capital has obtained from the Ethiopian Bottled Water and Soft Drinks Manufacturing Industries Association (EBWSDMIA).
“Purified water bottling businesses are going down,” said Ashenafi Merid, General Manager of EBWSDMIA. Due to the shortage and price hike of raw materials, bottlers are struggling to stay in the market. 20 bottlers have so far stopped their production while the rest operational producers are working under their capacity.
Currently, there are 106 water bottling companies in Ethiopia of which the majority are located in Oromia Region close to Addis Ababa where they can access the biggest number of consumers in the country. All together the water bottling factories produce close to 3.5 billion bottles of water per year.
The price of raw materials in one year has increased by more than double from 53 birr per KG to 130 birr.
“If situations continue their will be shortage of bottle water even in the capital,” opined experts whilst calling on the government to control raw material importers.
“Due to the restriction of trade computation and consumer protection authority, bottlers are not increasing prices; however there is price increase in the market. We have been requesting Addis Ababa Trade and Industry Bureau to control the market,” explained sector experts.
To support the producers, the association taking certain measures including talking with responsible government offices in different issues and as Ashenafi states, perhaps getting answers is a bit difficult for the association.
“Even adjusting the time on transport ban could have effect to the producers,”Ashenafi explained.
“Also regarding, excise tax, which has been a bit of a challenge for producers, we have conducted and submitted our study to the Ministry of Finance to adjust the rate on water producers. Also there are differences in regions regarding the payment of excise tax rate. We have submitted our letter to the Ministry of Revenue to strictly follow the situation,” elaborates Ashenafi.
Beverage companies are also gearing up to downsize their workforces at existing plants in light of the problems they are facing.
“As an option, the association is working to support producers to minimize their cost,” said Ashenafi, highlighting that even though they are trying to combat the issue, government offices are not showing similar cooperation.