Alexa
  • Directory of Taiwan

Chicago prepares to impose new bottled water tax

Ruben Alarcon, of Chicago, Illinois, buys bottled water at K-Mart on December 21. Beginning January 1, 2008, Chicago will impose a US$0.05 tax on bott...

Ruben Alarcon, of Chicago, Illinois, buys bottled water at K-Mart on December 21. Beginning January 1, 2008, Chicago will impose a US$0.05 tax on bott...

In her never-ending effort to maintain her health and appearance, Jill Walker credits bottled water with improving her digestion, maintaining her skin's elasticity and keeping her away from sugary soda.
The Chicago resident drinks one bottle in the morning after her workout. She tosses another into her bag to take to the office and finishes two more with dinner.
"It's a big part of my health regimen," she says. "When I'm properly hydrated, I can feel the difference in my muscles and my energy level."
In a week, she'll be feeling it in her wallet, too.
Chicago is set to impose a 5-cent tax on bottled water on January 1, becoming the first major U.S. city to demand such a surcharge. The move - which officials predict will secure an extra US$10.5 million annually - will help the city plug a budget hole by building on the growing disdain for environmentally suspect bottles.
In the last year, the tide has turned on bottled water, once admired as a healthy alternative to soft drinks. Now, as environmentalists take aim at the clear plastic bottles, politicians can take their own potshots.
Critics of the tax warn it could create a black market for water and spur consumers to shop in neighboring towns where a case of water will cost significantly less. While convenience store or vending machine water may only increase from US$1.25 to US$1.30 per bottle, the average cost of 24-pack will go from US$3.99 to US$5.19, a 30 percent hike.
With 90 percent of bottled water sales consisting of cases sold at supermarkets, retail experts predict the tax will hurt local grocers as customers cross drive over city lines to save money on water. The bottled water industry expects a 50 percent drop in Chicago sales, putting a dent in anticipated revenue from the tax.
"Just like people go to Indiana to buy cheaper cigarettes and gas, people are going to be going outside Chicago to buy bottled water," said David Vite, president of the Illinois Retail Merchants Association. "Once they're at the grocery store, they're going to do more than just buy bottled water, they'll do all their grocery shopping there."
Walker, who lives in the West Loop, already has decided not to buy her water in the city. She works in Oak Brook two days a week, so she says it will be easy to stop and pick up a case on her way home.
"Why should I have to pay more for water just because I live in the city?" she asked. "It's not fair and I'm not going to do it."
Businesses in neighboring communities are preparing themselves for the border crossings. The Sam's Clubs in Evanston, Cicero and Evergreen Park, for example, all have added to their stock in anticipation of the tax, spokeswoman Kristy Reed said.
"The store managers are aware that it's coming down the pike," she said. "They're going to be adding to their inventory to make sure they can meet the demand."
Chicago resident Tina Feldstein may be among those leaving frequenting the suburban warehouse clubs. Though she lives and works in the South Loop, she says she plans to stop and buy a few cases whenever she's in outlying areas. She intends to extend each bottle's life span, too, by refilling it once or twice with filtered water from her refrigerator dispenser before tossing it in the recycling bin.
"If I'm outside the city, I'll make a stop for bottled water," she said. "There's no question about it. I'll probably buy two or three cases at a time from Costco."
Feldstein, who used bottled water to wean herself from soda, worries about the impact the tax will have on the community's overall health. She's concerned that people will reach for carbonated drinks because they're cheaper than bottled water and more convenient than the tap. Some of her friends already have talked about cutting their water intake rather than pay the surcharge, she said.
"The tax will discourage people from drinking water," she said. "It's outrageous."
In an effort to promote city tap water - which consistently earns high marks for its taste and cleanliness - city officials acknowledge they want to curb the bottled variety's use. Illinois residents consumed 270 million gallons of bottled water in 2005, making it the seventh-biggest bottled water consumer in the United States, according to New York-based Beverage Marketing.
Consumers can avoid the tax by purchasing enhanced or sparkling water such as Perrier, Water Joe, Smart Water or Vitamin Water. The additives, supplements or carbonation in those beverages differentiate themselves enough from kitchen sink variety to evade the surcharge, according to the new law.
"It has to be like tap water (to be subjected to the tax) because that's the alterative you have to plain bottled water," said Ed Walsh, spokesman for the city's department of revenue. "You can't go to the tap and get flavored water or enhanced water."
Once touted as the gateway to a healthier lifestyle, bottled water has quickly transformed into symbol of American wastefulness. U.S. Sales of bottled water topped 11.9 billion in 2006, a 10 percent increase over the previous year.
Americans drink more bottled water than any other beverage with the exception of carbonated soft drinks, according to the International Bottled Water Association. To meet the demand, the Earth Policy Institute estimates manufacturers use more than 17 million barrels of oil - enough fuel to run 1 million U.S. cars for a full year - in making polyethylene terephthalate plastic bottles.
Only 23 percent of those bottles, however, are recycled, according to the Container Recycling Institute. The rest are tossed in to landfills, many of which already grapple with space shortages.
As bottled water consumption nearly doubled over the past five years, conservationists launched an aggressive campaign against the industry. An innocent sip of water soon has become an assault on the environment so severe, it seemingly rivals running over Al Gore with a Humvee.
"Bottled water is an easy way to get people involved in protecting the environment," said local activist Rachael Albers, a Lakeview resident who has worked to get bottled water banned from social functions at her church. "Not everyone can buy a Prius or hybrid car. But everyone can stop drinking bottled water."
The campaign caught the attention of Chicago Alderman George Cardenas, who promoted the landmark tax hike as a way for the city to set an environmental example. While the proposal was being debated, the State of Illinois and Cook County banned the use of public funds for bottled water purchases.
Earlier this month, the city sent letters to more than 12,426 retailers and wholesalers reminding them about the pending tax. Though most businesses will pay the surcharge through their distributors, they're still responsible for filing paperwork on any inventory purchased before January 1. Critics contend the requirement will be a bureaucratic nightmare for store owners.
"It's going to be very difficult for the city to enforce," said Timothy Bramlet, executive director of the Illinois Beverage Association.
It also will be difficult to police smaller businesses that do not use Chicago-based distributors, experts said. Small-scale operations may buy from suburban warehouse stores like Costco or Sam's Club to avoid the tax. Others, like health clubs and hardware stores, might stop offering bottled water as a convenience to parched patrons.
"Construction supply stores often sell bottled water to workers who come in to pick up supplies," Vite said. "Those kind of things are going to be history because it's too much trouble."
Just like the cigarette tax developed a black market on Marlboros, Vite says it's possible bottled water will follow the same path. Vendors will feel an enormous pressure to remain competitive, he says, especially given the cheaper option right outside the city limits.
"A black market will definitely develop," he said. "The tax will make Chicago an island, not just in Illinois, but in the entire nation."


Updated : 2021-08-06 02:58 GMT+08:00