Michigan bottlers still get free water, despite governor’s tough talk | Bridge Michigan

When Gretchen Whitmer campaigned for Michigan governor in 2018, she took aim at Michigan’s bottled water industry — and the state policy that gave it unfettered access to free water.

Nestle was extracting hundreds of millions of gallons of groundwater a year, which it bottled and sold under the Ice Mountain brand. The only cost: a $200 yearly fee per site. The company asked the state for a 60% boost in how much it could take from a well that draws from the source of two cold-water trout streams. At the time, the Flint water crisis was still in the spotlight, contributing to broad pushback. Nearly 81,000 public comments opposed the permit request; 75 supported it.

In April of that year, state officials said they didn’t have any grounds to deny the request and gave Nestle the go-ahead. The same week, the state said it would stop providing bottled water to Flint.

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The contrast seemed clear: Nestle gets free water, Flint families don’t. And one of the staunchest critics of the arrangement was Whitmer, a rising Democratic leader who had served 14 years in the Legislature.

“When it comes to Nestle, I don’t believe that they should be taking the water out of our ground and selling it, and I want to stop that,” Whitmer said in a gubernatorial debate.

She told a news outlet that Nestle “is abusing our water here in Michigan.”

And her campaign water plan emphasized the disparities that set off the controversy in the first place, noting that some Michiganders struggled to pay bills for water of questionable quality. The state should be preserving freshwater, the plan said, “not selling it at a nominal price.”

Whitmer vowed to do things differently.

But six years later, well into her second term and with a Legislature controlled by fellow Democrats, little has changed.

Most of Nestle’s North American water brands were bought in 2021 by a private equity firm and an investment firm in a $4.3 billion deal. The company, now called BlueTriton Brands, gave up the controversial permit, but it still pumps groundwater from the same wells at minimal cost.

Since Whitmer was elected, at least nine bills proposing changes — from new groundwater protections to closing oversight gaps — were left to languish in the Legislature. Bottled water faded as a talking point. The administration and lawmakers turned to other priorities: reproductive rights, economic development, education, infrastructure.

Peggy Case remembers meeting Whitmer when she was running for governor. “I have a picture of me with her,” said the board president of Michigan Citizens for Water Conservation, a nonprofit that twice challenged Nestle in court. “And yes, she was very strong. She was going to really help us out.”

But, Case added: “She’s basically kind of ignored us for the last six years. Which is sad. I mean, she didn’t ignore us before the election.”

Whitmer’s office didn’t provide a response to questions from ProPublica.

Rep. Rachel Hood, a Democrat who sponsored bills to protect Michigan’s water, said the governor is a “remarkable leader” who “has been diverted from the fundamentals” by crises that include the pandemic and flooding that followed massive dam failures. “She’s done some good work, but there’s just so much to do,” Hood said.

The Whitmer administration has overseen significant investment in water infrastructure, including lead pipe replacement, and signed a new law requiring filtered faucets in schools and child care centers.

But in Whitmer’s first four years as governor, the Legislature was still under Republican control, and leaders refused to consider bills aimed at groundwater withdrawals and bottled water, said Rep. Laurie Pohutsky, another Democrat who sponsored water bills.

Her party took over both the state House and the Senate in 2023, the first time it controlled the Legislature and the governor’s office in nearly four decades. Now, Pohutsky is speaker pro tempore and chair of the environmental committee. She’s hopeful for future bills, she said, but there’s no timetable for them. First, she said, the Legislature needs to undo the limits put in place almost two decades ago on the ability of the state’s environmental agency to update water quality rules and standards.

BlueTriton said in a statement that it’s committed to collaborating with policymakers and others to strengthen water quality and stewardship policies. It carefully monitors its water sources for sustainability, the company said. Its Ice Mountain brand also “has a long history of supporting communities in times of need,” such as delivering bottled water weekly to Flint for about four years after the state program ceased, the company said. (This effort was featured in a company video.)

The bottling of Michigan water has tested leaders from both parties over the years. In 2001, when a New York town advertised its willingness to sell “crystal clear well water,” Republican Gov. John Engler wrote the mayor to remind him that the water was likely connected to Lake Ontario. Per an informal agreement signed in the 1980s, he said, any such sale would require the approval of all Great Lakes governors. The town dropped the plan.

Months later, after public resistance killed Perrier’s efforts to locate in Wisconsin, Engler welcomed the Nestle-owned business to Michigan. It began pumping water from rural Mecosta County, about 110 miles northwest of Lansing.

“Perrier should be thankful that the raw material is free,” wrote an Engler adviser in a memo, according to Dave Dempsey’s book, “Great Lakes for Sale.” “If it was trees, natural gas, minerals, oil, or even sand, they would compensate the state.”

Around the same time, a Canadian company proposed shipping water from Lake Superior to Asia. In 2007, Bill Richardson, a presidential candidate from New Mexico, floated the idea of piping Great Lakes water to the thirsty Southwest. Unnerved at the prospect of losing a precious resource, Michigan and neighboring states implemented policies to keep the water in its natural basin: the watershed where it flows back toward the lakes.

They established the Great Lakes-St. Lawrence River Basin Water Resources Compact in 2008 to coordinate efforts. The landmark agreement by eight states, along with a parallel agreement that includes two Canadian provinces, bans nearly all water diversions — a stronger version of the policy Engler referenced. And in 2009, Michigan introduced its first system for assessing and permitting large withdrawals.

But bottled water remained a tripwire, even though other industries, like agriculture, use significantly more. Officials who called for new protections ran up against established water law and intersecting economic concerns.

Americans spent about $49 billion last year on bottled water, even though most can access water safely in their homes. The Beverage Marketing Corporation, a research and consulting firm, called it the largest beverage category by volume in the United States. The group has said that water bottlers’ revenues are growing “largely due to higher prices.”

What’s happening in Michigan with bottled water is also happening elsewhere. BlueTriton sued California regulators last fall when they drastically limited how much water it can draw from the source of springs that flow through a national forest, which has been bottled and sold under the Arrowhead brand for more than 100 years.

Dempsey, the author who’s also a senior adviser to the Michigan-based nonprofit For Love of Water, believes there’s a difference between the bottled water industry and other commercial water users, such as farms and breweries. It’s one thing to use the water and another thing to take it and sell it, he told ProPublica.

The industry “gets the water almost for free” and “sells it at a huge markup,” Dempsey said. “And that’s just not fair to the public interest.”

FLOW developed model legislation under which Michigan would license companies for small container withdrawals, like those used by Ice Mountain, and subject them to royalties. This could raise at least $250 million a year, said executive director Liz Kirkwood, which could go toward other priorities, such as eliminating lead pipes or establishing an emergency fund so communities in crisis “never have to pay for bottled water.”

Peter Lucido, then a Republican representative, introduced a bill in 2017 that would levy a 5-cent-per-gallon tax on water bottling companies, which, he told ProPublica, could go toward fixing Michigan’s out-of-date stormwater infrastructure. His bill died without a hearing in the GOP-led Legislature. A similar bill met the same fate in 2018.

Lucido, now a prosecutor, blames industry influence. He said he remembers four Nestle lobbyists in his office after he introduced his bill.

“When you’re making billions of dollars on bottled water, it doesn’t take much to get a team of lawyers and lobbyists to go ahead and put the fire out,” he said. And anyway, Lucido added, “not everybody has the guts to stand up.”

The company is also a major source of jobs in a rural part of the state, employing 285 people in Mecosta County in 2021, according to a study commissioned by BlueTriton. It contributed more than $76 million to the regional economy that year, the report estimated, and over $179 million to the state economy. The company pays the city of Evart, in Osceola County, for water from two public wells for its Pure Life brand.

But bottlers have avoided additional fees for removing groundwater, even though Whitmer promoted the idea as a candidate. Her 2018 water plan noted that the state charges companies a “severance tax” for mining other types of natural resources, or “severing” them from the soil. A similar fee for water, the plan said, could “control the siphoning of water for water bottling and my administration will work to see it done.”

Some environmentalists are skeptical. Collecting money for withdrawn water contributes to its commodification, they say, and might even motivate the state to expand the bottled water industry. It could also add to consumer costs, burdening people who don’t have safe water at home.

Instead of grappling with water royalties or taxes in the years since Whitmer was elected, Democratic lawmakers have proposed broad policy changes that could limit how much groundwater companies can extract, bottle and sell.

They introduced at least three bills to eliminate a measure that allows water to leave the basin if it’s in a small container — the so-called bottled water loophole. And they introduced at least six bills that would give the state more authority to weigh whether a withdrawal request is in the public interest, giving it greater grounds for a potential denial.

Eight of those nine bills, including one that had 28 sponsors, died without a hearing in a GOP-led Legislature. Hood said they were “largely messaging bills” — unlikely to become law, but meant to signal concern and ignite a conversation. Only one was introduced after Democrats took control of the Legislature: a public trust measure with a single sponsor, introduced last September. It hasn’t had a hearing.

On top of a “crowded agenda” pushing withdrawals off the priority list, there’s a lack of unanimity, said Sen. Jeff Irwin, sponsor of two earlier water bills. “Do you really have the votes on some of these environmental concerns that end up having an effect on commerce and industry?”

Hood is trying a different tack. She recently introduced a proposal to amend the state constitution to establish a right to a clean environment. Similar to the public trust bills, it would compel the state to act as a trustee for its natural resources. Hood said it’s modeled on an amendment in Pennsylvania’s constitution. Montana and New York have similar amendments.

The proposal was referred to the environmental committee chaired by Pohutsky in April. Changing Michigan’s constitution through the Legislature requires a two-thirds majority in both chambers, a formidable challenge.

The ongoing budget debate in Lansing is also an opportunity for lawmakers to fund a state council’s recommendations to improve how Michigan monitors and calculates water withdrawals. Pending since 2022, they echo concerns raised last month by the auditor general. “We were told, ‘We’ll get to you,’” a member of the Water Use Advisory Council said at a February meeting. She urged others to reach out to their legislators. “Every contact does help.”

For now, the environmentalists who have long worried about the bottled water industry’s effect on the cold creeks of Northern Michigan aren’t expecting much. Groundwater is easy for government officials to overlook, said Dempsey. Case, the board president of Michigan Citizens for Water Conservation, said she and her colleagues are ready to testify if a bill ever has a hearing.

And Steve Petoskey, an MCWC board member who lives in the area where BlueTriton pumps water, said he wishes that decision-makers considered the interests of regular people, not just businesses.

“They’re getting all the breaks,” he said of companies like BlueTriton. “Our concerns don’t seem to be heard.”