…Retailers of our products are exploiters, N100 price imminent, says Sachet Water Business Owner
…Cost of Production Tripling daily; banks don’t give us loans, says ATWP
Despite the low-cost and affordability nature of sachet water, its market price has dramatically risen due to economic factors like inflation, high cost of production, and supply chain disruptions.
Whereas these prevalent factors have made the sachet water business unbearable for the manufacturers and unaffordable for many consumers; especially those who have badly felt the impact of the current economic crisis in Nigeria – who now consider it a luxury. A special report by Mujeebat Adewole revealed.
Findings revealed that in Ibadan, the Oyo state capital, sachet water has become a luxury item since December 2023, due to a strict hike in its price pegged at N50 each by the retailers, despite being sold between N200 and N250 respectively by the Manufacturers.
In this special report, Mujeebat Adewole unraveled the mystery surrounding the hike in prices of sachet water around the capital city of Oyo state, particularly, in the Akingbile-Maniya area of Ibadan.
The people of this community regretfully lamented the highly inflated price of sachet water which has now resulted in some returning to the olden days of the water-in-nylon business.
Also, the impact of the hike in the price of other essential commodities has made people resort to filling their bottles with sourced water as an alternative to the more expensive filtered version.
“If a common man like me cannot afford a sachet of water; the least of all items, I don’t know what else I would be able to afford with this terrible state of the economy,” a furious bike man identified as Mr. Alabi who was accustomed while conducting his daily business lamented.
Speaking with Mrs. Olujeminiyi Goodness, a member of the Akingbile-Maniya community in Ibadan, she expressed worries about how sachet water has become a cost item for her family, adding that well water in a bottle could save her money for other tangible items.
“I bought four pieces of water bottles for myself, my two children, and my husband just recently because we could not maintain the buying of the sachet water at home, not even a bag is 20 pieces again, it has now been shortchanged to 16 pieces.
“With the current situation, I think filling our water bottles with direct-from-source water could save our money for some other tangible items,” a mother of two expressed her worries.
Meanwhile, a drama unfolds along the populous Challenge, Ring Road area of Ibadan, where some members of the community have started the business of iced water in transparent nylon.
In years, the sales of iced water in transparent nylon have stopped since the exodus of the sachet water business. Thus, the hike in the price has staged a comeback for the olden-days business.
This trend has provided an alternative to the more expensive and filtered version being sold for N50. However, iced water in transparent nylon costs N50 for two pieces in Ibadan.
During a telephone conversation with the Managing Director of YOMEX Drinking Water, a popular water company situated along Ring Road, Oluyole Estate Extension, in Ibadan, She described the retailers of their product as “exploiters”, saying that consumers have become a cash cow and being charged high prices for a sachet of water.
The business owner who preferred to be identified as YOMEX MD explained that a bag of sachet water purchased from the distributor for N250 and sold by retailers for N800 is nothing but a form of extortion.
She described the development as trending, worrisome, and unfair to consumers whilst calling on retailers to lower their prices.
“Retailers indeed sell a sachet of our product for 50 naira, this is too much profit. It is on the high side because they cannot buy for 250 naira from us and be selling for 800 naira, that is exorbitant.
“We producers are not making a profit of 10 naira on each of our products, especially the sachet water. So, the problems of the hike in prices lie with the retailers. If they sell 2 sachet for 50 naira they will still make their profit. If they also claim they buy iced blocks to refrigerate what they buy from us, when they sell 3 sachets for N100, they would still make their profit.
“I remember sometime in December 2023, I organized a party and bought an ice block for N200, but it has risen to N1,200 each, although an ice block can be used to refrigerate 3 bags of sachet water. Despite all these factors, they could still make N400 profit, this trend of a sachet for 50 naira is nothing but exploitation.”
The YOMEX MD while speaking on the welfare of their staff during this period and the threat of closing down their businesses said, “Despite that, the cost of raw materials has increased by 30 percent, We producers consider the welfare of our staff above other factors by not sacking them, we could have closed down the factory and told them to return to their various homes, but then, our business will collapse and the staff will suffer still more thereby crumbling the economy of our dear country.
“We, in agreement with the association maintained reasonable prices in the sale of our products, with the latest manufacturer price of N250 per bag, we are only making 1 percent profit. We merely increased from N200 per bag to N250 in recent times.”
When asked about the cost of production and likely scare of subsequent increases in the prices of sachet water, YOMEX MD said, “We are left with no option than to once again increase our production price although after the meeting with the association. Without further increase in the Manufacturer price, there is no how we are going to continue with the business.
“After the latest increase to N250 per bag, We went to purchase the raw materials for production and the price rose with another N900,000 increase from what we were buying before.
“The pure water film I bought for 2.550 million naira in January rose to 2.7 million naira last Friday, the situation is already becoming unbearable for the manufacturers. So, we manufacturers are standing in unison, we do things together, and when the association intervenes, there is going to be a new manufacturer price.”
In another telephone conversation with a manufacturer of sachet water, N-MUDRAN Water, the business owner confirmed that the persistent rise in the cost of production resulted in a decrease in the size and quantity of their products from 20 pieces per bag to 16 pieces.
The business owner expressed reassurance that the water company never intended to swindle anyone’s pocket with the acclaimed reduction in sizes and quantity of sachet water for personal gain.
“We are not trying to punish the general public with the reduction in the sizes and quantity of our product or squeeze their pockets. Our cries lie in the cost of production that has become unbearable for our businesses to survive.”
Meanwhile, a recent press conference organized by the Association of Table Water Producers (ATWP) on Wednesday confirmed the assertion of YOMEX MD that the price of sachet water would continue to skyrocket and could soon be sold for N100.
The Association while lamenting the rising cost of production said the latest development is crippling their businesses and forcing them into huge debt.
They noted that for producers to bring quality potable water to the doorsteps of retailers and consumers alike, they will have to pay more, because of the current cost of materials for water production.
“Pure water is sold for N50 nationwide, and it is even going up to N100 per one. At our end, there’s nothing we can do. The cost of production is high.
“As of last year December, we were buying materials (nylon) for N1,100 per KG. The 6 kg of nylon is now N3,600/N3,700. The cost of treatment is also high. The increment for these materials comes at 3 times in one week. It is also difficult for us to increase the price of water.
“If ordinary Nigerians can’t afford pure water, I don’t know where we are going. Every water producer is funding the pure water factory on personal pockets or borrowed money.
“Many banks don’t give pure water producers loans. We want Nigerians to bear with us. We don’t want Nigerians to buy water at more than N20 per sachet. The cost of production including the price of diesel has affected so many things.”
This Special Report was produced with support from THE ELITES WATCH FOUNDATION FOR INVESTIGATIVE JOURNALISM (TEWFIJ)
