Consumers paying more for bottled water

Lawsuit filed over bottled water tax
January 2, 2008 3:18:19 PM PST
If you purchased a bottle of water in Chicago Wednesday, you may have noticed a price increase. Starting January 1, the five-cent surcharge is being added to the cost of your bottled water.

Chicago retailers are in the process of changing prices of bottled water. The tax comes from efforts to be more environmentally friendly. But some merchants say the tax is not friendly to local businesses.

After the New Year's Eve rush, Binny's Beverage Depot in the South Loop had shelves to restock. Now there is one more thing the general manager has to do, a special bottled water inventory.

"We have many things to be doing after the New Year's holiday here. So there's a lot of cleanup and many other things we could be spending our time on right now," said GM Len Armanetti.

Alderman in Chicago argued it would be a way to raise environmental consciousness. Distributors actually pay the tax, but it will be passed on to merchants and customers.

"I try to drink tap water when I can. So it probably won't affect me, but I think it's a good idea," said consumer Patrick Kassen.

"In the winter it's so easy to get dehydrated. And I'll just buy water regardless. I mean, I need to drink it throughout the day. And it's a convenient package. And so I don't think it will affect my buying habits," said Dana Hopings.

"For the environment, if everyone has to do a small step toward protecting the environment, I think it's a great thing that America is catching up," said Mike Groeber, German tourist.

One day after it went into effect, Chicago's tax on bottled water faces a lawsuit. The city imposed a FIVE percent tax on each bottle of water sold that is expected to bring in more than $10 million in tax revenues every year.

A Coalition of Food and Beverage Retailers said the tax violates a state law prohibiting a tax from being imposed on a single product.

"When people go to suburban grocery stores to buy bottled water, they're also going to pick up other grocery items at those stores, ignoring the Chicago retailers that they might otherwise go to," said Peter Gill, Illinois Retail Merchants Association.

At the Spa Café on West Monroe in the Loop, they use some packaging and utensils that are biodegradable or made from recycled products. Here they say there is support for any green effort, even if there is a tax.

"It's not just about us. It's about future generations. It's about society in general. It's about being less selfish about our needs and kind of looking at the global whole," said Daniel Asher, Spa Cafe executive chef.

Asher said he hopes the revenue from the water bottle tax goes toward other environmentally friendly projects.