Moscow’s Been Hitting the Bottle : Vodka? Nyet! Putrid Water Has Uncorked a New Industry

Its color changes by season from cloudy gray to milk chocolate. On good days, the smell of manure is overpowered by the scent of bleach. And it tastes so strongly of chemicals needed to kill its pollutants that drinking Moscow’s tap water is often likened to taking a gulp from a swimming pool.

But its appearance, odor and taste have opened one of the most promising markets on the city’s new capitalist horizon, by giving birth to a bottled-water industry that is enjoying astounding success.

Even the city of Moscow, while defending the municipal water as safe, is making a virtue of necessity by selling a commercial alternative to the murky liquid that it pumps through the corroded lead pipes of the city’s water system.

That city coffers bankrolled a new bottling plant in the suburb of Zelenograd might seem an unsanctioned diversion of public funds in most countries. But in Russia, such practices stir little popular resentment.

Of greater concern are the bootleggers filling bottles in bathtubs with tap water, and fly-by-night salesmen stealing containers from legitimate suppliers in order to ride on an established competitor’s coattails.

Like much of the Russian economy, the bottled-water market is virtually unregulated. Testing and certification are optional--and enforcement of the few standards is virtually nonexistent.

But some industry leaders are pushing for a little law and order on the wild water frontier by appealing for participation in an international self-regulatory agency and raising consumer consciousness about scams.

“The market here is huge and it can handle a lot of competition, but it needs to be regulated,” says Scott Nicol, an American who pioneered the water home-delivery service that is now as popular with Muscovites as with the Westerners who were initially the sole consumers.

Nicol, originally in Russia to coordinate internships for the University of Arizona, hit on the idea of a drinking water supply company after noticing that every office and apartment rented by expatriates had floors and counter tops cluttered with cases of imported Evian, Volvic and Perrier. His firm, ClearWater, rang up more than $9 million in sales of filtered and purified local water last year, with more than 2,000 five-gallon cooler bottles delivered each day.

Now dozens of successful bottled-water ventures operate in Russia. Sales increased 12% last year and are expected to double in each year over the next decade.

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Bottled water remains a luxury for most Russians, but real incomes increased in 1996 and that trend is expected to strengthen.

Meanwhile, tap water quality has steadily declined, encouraging even modestly paid workers to spend their hard-earned rubles on a product vital to their health.

Cuts in state funding for water conservation, purification and system maintenance have resulted in more than half the public drinking water falling below hygienic standards, Natural Resources Minister Viktor Orlov complained early this month.

Efforts to charge a fee for public water--currently free--in order to upgrade the system have been rebuffed by Russians who figure the revenues would be siphoned off by the same corrupt officials who pocket much of the intake from taxes and other utilities.

ClearWater’s Nicol says less than 5% of Moscow’s 10 million residents rely on bottled water in their homes. But with no hope that public water will be cleaned up in the near future, sales are expected to dovetail with the rise in spending power.

Russians already account for 70% of ClearWater’s sales, compared with almost zero when the company was started in 1993. Torn Water, another popular supplier, likewise reports that more than half its clientele is now Russian.

Despite the promising outlook for bottled-water sales, the prospects for better consumer protection are less appealing.

“There are some shady companies that operate in this market,” says Yuri Rakhmanin, head of the drinking water laboratory of the Ecology of Mankind Research Institute in Moscow.

He says he knows which companies comply with sanitation and purification standards and which operate outside the law, but he fears exposing the transgressors, which are often part of the criminal element.

“I don’t want to get a bullet in my head,” he says.

The Moskoviya water bottler that began commercial sales in January likewise supports certification to weed out unscrupulous dealers.

Moskoviya is the offspring of the Moscow Municipal Water and Sewer Department and first came to life in a civil-defense planning experiment when Moscow Mayor Yuri M. Luzhkov wanted to package domestically produced water for use in emergencies. Its 45-ounce bottles of locally sourced water are sold for about 70 cents each.

“Mayor Luzhkov wanted to know why only imported waters were available on Moscow store shelves and asked us to try to locate natural sources close to the capital,” says Iosip I. Glukhovsky, director of both the Zelenograd water district and the commercial Moskoviya venture.

Like others involved in the city water system, Glukhovsky insists there is nothing dangerous about the water that flows from the taps. Pollutants and fertilizer runoff collect in reservoirs and rivers, causing the water to retain odors even after chemical treatment.

“It smells bad, but it is not necessarily bad for you. It is the producers of water filters who are spreading propaganda about Moscow water being unhealthful,” says Glukhovsky. “But even the best treated municipal water cannot compare with natural spring water. Once people taste the difference, it is difficult for them to go back to drinking from the tap.”

He also acknowledges problems with aging pipes and malfunctioning pumping stations--water quality hazards that many people choose to avoid by buying bottled water.

So confidence in this burgeoning industry remains high.

“The water market will continue growing because everyone now wants something a little better, and they are increasingly able to afford it,” says Torn’s general director, Sergei Krupenchenkov.

“Look at the vodka market--you can find dozens of brands of varying quality in any kiosk. Some people are willing to drink a cheap variety, while others will pay more to get the best. It’s only a matter of time until they feel the same way about water.”