Watchdog accused of ‘giving away’ billions of litres of spring water to foreign bottling giants

In the summer of 2014, Coca-Cola launched its new water brand, Glacéau Smartwater, with the pop star Kylie Minogue. Drawn from an underground spring in the north-east of England, it was claimed that the water was filtered through sandstone and “sees sunlight for the first time” in more than 3,000 years when drawn.

The singer posed for photographers in London, with a stack of plastic bottles behind her and water droplets apparently streaming in front of her. The product is promoted as being vapour-distilled spring water from Northumberland with added electrolytes.

In the 12 years since Minogue’s campaign, Glacéau Smartwater is now one of Britain’s bestselling water brands, with revenues of about £30m a year.

The Coca-Cola factory in Morpeth, Northumberland, sits above a natural underground reservoir of fresh water – or aquifer. Coca-Cola Europacific Partners (CCEP), the licensed bottler for Coca-Cola products in the UK, produces enough bottled water every year to fill 30 Olympic-size swimming pools.

But The Observer can reveal Coca-Cola is paying the Environment Agency (EA), England’s primary environmental regulator, just £6,070 in annual charges for a licence to extract up to 674m litres (almost 150m gallons) of water for its production line at Morpeth. It extracted about 125m litres last year.

It means Coca-Cola is paying 0.005p for each litre of spring water it extracts, which works out at 5p for every 1 cubic metre (1,000 litres) of water, or a metric tonne. The cost of a 600ml bottle of Glacéau Smartwater is about £1.60.

The Observer has, for the first time, obtained the annual charges some of the world’s biggest foreign bottled water companies are paying to the environmental regulator to extract billions of litres of pure water from ancient aquifers and springs in England.

The investigation reveals:

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  Coca-Cola and Nestlé paid the EA combined fees of less than £10,000 in 2025-26 to abstract British spring water from aquifers for their bestselling brands Glacéau Smartwater and Nestlé Pure Life;

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  American beverage company Niagara Bottling pays less than £1,300 a year to extract up to nearly 35m litres of water from a historic spring in West Yorkshire, via its subsidiary Shepley Spring;

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  French-owned company Roxane UK has a licence to extract up to 1.5bn litres of spring and mineral water a year in Cumbria’s Eden Valley. It pays the EA fees of about £24,000 a year.

Alistair Carmichael, chair of the environment, food and rural affairs select committee, called for a review of the figures obtained by The Observer. “Giving such favourable terms to companies bottling water for retail sale is unacceptable,” he said. “More government action is needed to tackle the scourge of single-use plastic.”

While bottled water companies abstract water for a typical cost of between 2p and 5p a cubic metre, householders with water meters can pay about £2.70 a cubic metre for tap water.

As the heatwave has seen a boom in bottled water sales – they are worth about £2.5bn a year in the UK – there are concerns about the plastic waste, ecological effects and the pressure on water resources. International research has suggested that the environmental impact of bottled water is between 1,400 and 3,500 times higher than tap water, including plastic pollution, use of resources and damage to ecosystems.

Almost 8bn single-use plastic water bottles are sold in the UK each year. More than a third of all plastic bottles are not collected for recycling, according to figures from Recoup, the UK’s plastics recycling charity.

Millions of pounds have been invested in recent years to improve public access to public water bottle refilling stations to reduce consumption of plastics. A new deposit return scheme is due to be introduced in October 2027, with a 20p refundable deposit on drinks in plastic bottles and aluminium cans.

Alex Beckett, principal strategist for food and drink at market intelligence company Mintel, said: “We’ve got some of the best tap water in the world, but some consumers see bottled water as being purer than tap water, and that has helped boost sales.”

The EA collects about £200m a year in water abstraction fees, which cover agricultural use and industry, including bottled water companies. There are initial application charges and various levels of annual fees, depending on the impact on water resources and the volumes taken. Bottled water companies say they invest in conservation and water projects to protect the environment in areas in which they work.

The thermal waters at Buxton in Derbyshire, on the edge the Peak District, were first developed as a spa by the Romans and have been bottled since the 1850s. The Nestlé group took control of the Buxton brand in the early 1990s. The Swiss multinational pays less than 2p a cubic metre to the EA to extract water from the Lightwood aquifer for its Pure Life product, with a total charge of £3,178 in 2025-26.

It is a different story at St Ann’s well in the town centre, where the public can draw water from a fountain with a cast lion’s head as a spout.

Nestlé abstracts water for Buxton Natural Mineral Water from this spring, but it is controlled by High Peak borough council. The authority charges the company £500,000 a year under the agreement for water abstraction, according to the most recent figures available. This appears to be a commercial rate and is many times more than Nestlé pays the EA.

Neil Scowcroft, a local businessman, said the EA should increase abstraction fees for bottled water. “They should be paying multiple amounts of what they are paying for this licence and it should benefit the local community,” he said.

One of Britain’s fastest-growing water brands is White Rock, with a 750ml bottle selling for 85p. Its water is marketed for being filtered through mineral-rich rock in an ancient source beneath the Pennines in West Yorkshire.

The White Rock brand is owned by US-based Niagara Bottling through its subsidiary Shepley Spring, which also produces own-brand supermarket bottled water. There has been a licence to abstract water in the village of Shepley since 1965, with a current annual charge of £1,278.

The company also has a separate abstraction licence at the nearby village of Highburton, with an annual charge of £5,784, according to figures obtained by The Observer under freedom of information laws.

Roxane UK, owned by the French water bottling company Sources Alma, is one of Britain’s leading bottled water businesses, producing about 2bn bottles a year. It abstracted more than 768m litres of water last year from its site in Eden Valley, Cumbria, paying an annual abstraction fee of £23,083. It also has a separate site in Lichfield, Staffordshire.

One of Britain’s most famous mineral waters is Harrogate Spring Water, which in 1740 became the first water to be bottled in Britain. The brand, which is owned by the French group Danone, is exported around the world, including to China, the Middle East and Europe.

Harrogate Spring Water draws from two boreholes; one at its Harrogate factory in North Yorkshire and another at a nearby stream called Oak Beck. The total annual fees paid to the EA for these two boreholes in 2025-26 were £6,348. The company also proposes to source water from a third borehole at a farm near Harrogate.

Sarah Gibbs, who was part of the successful campaign earlier this year to stop a proposed expansion of the Harrogate Spring Water factory into woodland, said: “Water is our most valuable resource on the planet and we’re basically giving it away to these corporations. They then sell it back to us in plastic bottles which pollute the planet.”

Harrogate Spring Water has a separate agreement with North Yorkshire council covering rent and royalties for use of the town’s name, with payments of nearly £233,000 in 2024-25. Gibbs said the EA should increase its charges for the abstraction licence, and that she would want to see more investment in water fountains in the town.

The industry profit margin is estimated to be between 5% and 6%. Freddie Griffin, an analyst at researcher IbisWorld, said: “Profit has come under pressure as bottled water producers face rising packaging costs. However, bottled water demand has remained resilient.”

Daniel Jaffee, professor of sociology at Portland State University in Oregon, and author of Unbottled: The Fight Against Plastic Water and for Water Justice, said the global bottled water industry argued its water use was “minuscule” compared with other users, but even relatively small volumes of abstraction could have negative effects in sensitive environments.

“The regulation of ground water extraction needs to be scrutinised much more carefully, and companies need to be held to account,” he said.

In 2017, the province of Ontario in Canada imposed a surcharge of $500 for every 1m litres of water abstracted by the water bottling industry, on top of the usual fee of $3.71 for the same volume. The surcharge means bottled water companies in Ontario will typically pay at least seven times more than the charges imposed on UK bottled water companies.

Kathleen Wynne, who was Ontario’s premier when the new regulations were introduced, said at the time: “Water bottling is a different kind of industry and we need to treat it differently.”

In Michigan, proposed legislation was introduced in the US state’s legislature in May to impose a royalty on bottled water companies that abstract public water resources. It is intended to raise about $300m a year. Liz Kirkwood, executive director of Michigan-based Flow Water Advocates, which was behind the proposed legislation, said: “Most companies actually have to pay for their product, and the bottled water industry almost pays nothing.”

Douglas Parr, chief Scientist at Greenpeace UK, said: “The fees paid by the plastic bottle companies who sell the nation’s own spring water back to us are so tiny that the Environment Agency could increase them 10,000 times over [and] solve its funding crisis, while making negligible difference to prices at the supermarket checkout.”

CCEP has invested in a 10-year waters replenishment programme in north-east England. A spokesman said: “We’re focused on improving water efficiency in our own operations and returning water through replenishment initiatives. In 2025, we returned 109% of the water used in our beverages back to nature and communities.”

Nestlé said it used 100% recycled in its Pure Life and Buxton bottles, and was committed to sustainable water management, with four UK projects to regenerate local water cycles. It said Nestlé Waters UK sites at Buxton, and at Princes Gate in Pembrokeshire, south-west Wales, were both certified by the globally recognised Alliance for Water Stewardship, with the Buxton site becoming the first in 2021 to achieve platinum certification, the highest available standard.

Harrogate Spring Water said it was reducing its environmental impact across its operations. It said its packaging was fully recyclable and there were continuing initiatives to increase the content of recycled content in its bottles.

A spokesperson for Roxane UK said the company was committed to “strictly respecting” the environment and was investing in the circular economy.

Niagara Bottling did not respond to a request for comment.

A spokesperson for industry body the Natural Source Waters Association said: “Natural source water producers pay the same abstraction charges as other licensed abstractors, including public water suppliers. Natural source water accounts for just 0.03% of total UK water abstraction. As in industry, we are committed to improving recycling rates and supporting a more circular economy.”

An EA spokesperson said: “Water bottling licences come with strict conditions to ensure the environment is protected. Charges are structured to reflect the impact and complexity of water abstraction, and to recover the costs incurred in setting the licence. They are not intended to function as a wider economic instrument.”

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Photograph by Gary Calton for The Observer