Online Desk: In response to an unusual surge in bottled mineral-water prices over the last six months, the Bangladesh Competition Commission has sought detailed manufacturing-cost breakdowns from the local market players. The commission suspects that leading mineral water producers may have engaged in collusion, resulting in simultaneous price hikes of at least 33 per cent over the past half-year — which is a violation of the Competition Act.

However, representatives from water producers argued that escalating costs of raw materials, increased import values, import taxes, the devaluation of the local currency Taka against the US dollar, supplementary taxes and rising logistical expenses have compelled them to make upward price adjustments. During the six-month period, the price of a half-litre bottle of water has seen a sharp 33 per cent increase, reaching Tk 20, prompting the commission to take such action.

On October 3, the commission initially called a meeting to address the escalating prices of mineral water, but the companies skipped the meeting. Subsequently, the commission organised a second meeting at its office, presided over by Chairperson Pradip Ranjan Chakraborty. The meeting was attended by representatives from the Bangladesh Trade and Tariff Commission, Directorate of National Consumers’ Right Protection, Consumers Association of Bangladesh, Special Branch, National Security Intelligence, as well as representatives from both local and multinational companies. A representative from CocaCola informed the commission that they had raised the retail price of their Kinley-branded water from Tk 15 to Tk 20 in February. Kinley presently holds a market share of 12 per cent.

As per a letter of the commission forwarded to the Ministry of Commerce, CocaCola linked this price adjustment to the surge in raw material costs, increased import values, import taxes, devaluation of taka against the US dollar, supplementary taxes, and mounting logistical expenses. In April, the Meghna Group followed suit by increasing prices of its Fresh brand water. Currently, the brand commands a 35 per cent market share. Similar to CocaCola, Meghna also cited the same reasons for the price hike. Akij’s Spa and City Group’s Jibon branded half-litre water prices were increased in August and September, respectively.

A representative from Partex, a supplier of Mum branded mineral water, said their wholesale rate is Tk 10.50, while the retail rate is Tk 20 for a 500 ml bottle. Dhaka WASA and Maitry Industry said their 500 ml bottle is priced at Tk 15 at retail and Tk 9.0 at the wholesale level. A representative from the Consumers Association of Bangladesh alleged that all the leading companies have set the same water price and have raised prices at the same rate, which is certainly a violation of the Competition Act.

A representative from the Bangladesh Trade and Tariff Commission said they require a market assessment to understand the rise in bottled water prices. The representative said that they need a cost sheet of bottled water at both pre and post-hike levels from the companies to get an accurate picture. A Special Branch official informed that the price of resin — a component used in making water bottles — was Tk 148 per kg in December 2022. This declined to Tk 142 in September 2023 and further to Tk 136 per kg in October 2023.

The declining resin rates indicate that packaging costs have decreased over the past year. The Competition Commission asked the Trade and Tariff Commission to prepare the format of the cost sheet for conducting the market analysis. The Trade and Tariff Commission has been tasked with providing the final report of the analysis along with recommendations. Competition Commission Chairperson Pradip Ranjan Chakrobarty said they will take necessary legal action based on the recommendations of the Trade and Tariff Commission.