Advocata urges Govt. to reassess recent price controls on bottled water

Monday, 19 May 2025 03:17 - - {{hitsCtrl.values.hits}}

The Advocata Institute has urged the Government to reassess the recent price controls imposed on bottled water.

Effective 1 April 2025, the Sri Lanka Consumer Affairs Authority (CAA), through an Extraordinary Gazette notification, imposed price controls on bottled drinking water manufactured and sold in the country. The maximum price ranged from Rs. 70 per small bottle and Rs. 350 for larger bottle. (See table).

Advocata said it has previously raised concerns about the market distortions caused by price controls. Setting maximum prices on goods and services—known as “price ceilings”—is often intended to protect consumers from exploitation in the form of high prices.

However, the realistic outcome of such controls on essential products like drinking water can be quite the opposite.

Sri Lanka’s bottled water industry is highly competitive, with over 130 manufacturers using a variety of water sources and purification methods—from advanced reverse osmosis to more affordable chemical treatments. Products must comply with SLS standards and Health Ministry regulations, and undergo annual licencing, inspections, and regular testing by the CAA.

The new price ceiling—capping the retail price of a 500ml bottle at Rs. 70—undermines producers’ ability to recover costs, forcing them to cut corners on various production expenses. This raises the risk of sourcing lower-quality raw materials, including both water and plastic for packaging, compromising the availability of safe drinking water in the retail market for the public. It also remains unclear whether glass bottles fall under the same cap, potentially pricing them out of the market altogether.

These controls ultimately limit consumer choice. Previously, consumers could select bottled water based on their preferences and budget. With fixed prices, that flexibility is lost— eroding competition and reducing shelf options in terms of quality, source, and packaging.

Given these ramifications, Advocata urges the Government to engage relevant stakeholders and reverse the decision to unnecessarily intervene in an already competitive and thriving market.

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