Nestlé’s secret water deal

A company that makes its money by bottling city water and selling it back to Sacramento residents won’t say how much liquid it’s pumping from local rivers and groundwater wells—and neither will the city.

Nestlé Pure Life is one of the five most profitable brands in the country when it comes to selling bottled water, an industry that collectively made $18.5 billion in revenue in 2017, according to a report by the Beverage Marketing Corporation. Locally, Nestlé mines its liquid product from Sacramento rivers and groundwater wells whose rights are controlled by the city. This has been controversial in the past.

Nestlé operates a bottling plant in South Sacramento, which was shut down by protesters one day in 2014, during the peak of California’s drought. The company and its local plant have mostly stayed under the radar since then, but questions remain about their city-aided business model.

“I’ve got several major concerns with this. One, they’re attempting to privatize water, which is a life-sustaining necessity and that’s pretty scary right now. There’s also the fact that California’s in a major drought,” said James Lee “Faygo” Clark, an activist with the Crunch Nestlé alliance. “We’ve had one decent year of rain since this drought started and that’s not enough to refill our aquifers. So as they’re pumping out hundreds of thousands of gallons a day, we’re not getting the rain and the water necessary to replenish that.”

Those questions aren’t being answered by representatives of Nestlé or the city of Sacramento.

A spokesperson from the city’s Department of Utilities, which charges Nestlé for its local water usage, declined to reveal how much of the city’s water the corporation is tapping. The department spokesperson, Ellen Martin, said Nestlé's water usage data “is considered confidential—and the city would decline to disclose that information.”

Nestlé also declined to say how much water it purchased from the city last year. Instead, company spokesperson Alix Dunn responded with an email that said Nestlé's water purchase “was in line with previous years.”

Dunn’s email noted that the company recently certified all five of its bottled water factories in California, including the plant in South Sac, with the Alliance for Water Stewardship. The global organization says on its website that it “promotes responsible use of freshwater that is socially and economically sustainable.”

Corporate members of AWS include Coca-Cola, General Mills and McDonald’s, along with nonprofits such as the Nature Conservancy and World Wildlife Fund.

Martin explained that Nestlé primarily takes its water from the city’s Fairbairn Water Treatment Plant. When that plant goes offline during the winter season for maintenance and repairs and due to low water demand, Nestlé can receive a mix of surface- and groundwater from the Sacramento River Water Treatment Plant and wells in North Sacramento, she added in an email.

“The City’s water distribution pipelines are all interconnected so depending on the demand and what production facilities and/or wells are online—that would determine the source of water at the Nestlé point of service,” she wrote.

But not every jurisdiction is a satisfied Nestlé partner. State water officials recently dealt the company a blow by determining Nestlé improperly drew hundreds of millions of gallons of water from a creek in the San Bernardino National Forest.

Following a 20-month investigation, regulators with the State Water Resources Control Board found that Nestlé was drawing water two-and-a-half miles from where it was allowed and at a higher elevation than its water rights permitted, which are for the base of the mountains near Strawberry Canyon. Nestlé claims water rights dating back to 1865, but its permit to siphon water from Strawberry Creek expired more than 30 years ago, state regulators found.

According to a joint media release from the Center for Biological Diversity and other nonprofits, Nestlé continued to divert between 32 and 162 million gallons of water annually from a creek it no longer had rights to. That had quite the impact, said Ileene Anderson, a biologist and public lands deserts director for the Center for Biological Diversity.

“With our ongoing drought and the diversion of water that Nestlé has been doing, Strawberry Creek started to not have perennial flows and there were stretches of the creek that were dry, and so this is a real challenge for any aquatic species,” Anderson said. “Nestlé needs to leave enough water so that the creek actually flows and provides habitat for these species in our national forests.”

Nestlé says it’s currently reviewing the new terms and conditions from the U.S. Forest Service to renew its permit for Strawberry Creek. Anderson says the new federal rules allow for minimum flows now, but aren’t strong enough.

“I’m not sure that’s going to be adequate to sustain wildlife that’s barely hanging by a thread in Strawberry Creek,” she said.

As for how much Nestlé pays the city of Sacramento in water, wastewater and drainage fees, Martin would only say that the company is charged the same rate as any local water-service customer. The current volumetric rate is $1.3261 per 100 cubic feet of water (about 750 gallons), Martin said, slightly higher than the “just under $1” rate of 2014.

Charging a major water user such as Nestlé the same rate as Sacramento residents frustrates local activists like Clark, who pointed out that a majority of the city’s public drinking fountains, especially near the K Street corridor, languish in disrepair as homelessness increases and another heat wave wallops those outside.

“I think access to water is an international human right. I think any governmental body has a duty to care for its citizens, especially its most downtrodden,” Clark said. “Providing access to water for people who would otherwise not have that access should be a no-brainer. Yes, that is the city’s responsibility."Ω