Packaged water producers to shut down If Government fails to deal with the free fall of the Cedi as cost of electricity and fuel price hikes in addition to the Cedi depreciation are affecting their business negatively.
The Association issued a statement on Accra-based FM station Citi FM explaining the reason for their impending action.
“It is important to note that packaging alone forms about 60% of the production cost for sachet and bottled water. Diesel fuel used for distributing the packaged water to market centers for consumers was around 15% of the product cost as of the third quarter of last year”
“Due to the high increase in diesel and other petroleum products, diesel fuel for distributing packaged water to consumer centers now exceeds 25% of the product price. Electricity cost which used to be around 15% of the product price has increased to 20% of the product price as a result of the recent increase in utility tariffs.”
“All the above sums up beyond 95% per the last packaged water new prices announced in September 2022 without considering the cost of capital, Salaries, wages, taxes, bank charges, regulatory fees, machine and equipment cost/depreciation/parts replacement, distribution vehicles and its maintenance costs and other overheads.”
“The leadership of the packaged water industry will continue to update the public on the challenges, and if the government did not attend to the call by a week from today, we will have no option but to pass on the cost to the public and possible shutdown of production and distribution for a week across the country.”
The Association added that they may be forced to adjust their prices upward in the short run.
The economic situation is hitting all sectors of the economy and businesses. Unfavourable conditions compel rational business owners to push these increases into prices of goods and services which ultimately culminates into high cost of living.
