In the UAE, many establishments refuse to stock cheaper local water, either because the margins are much lower or their supplier stops them from selling it.
In the UAE, many establishments refuse to stock cheaper local water, either because the margins are much lower or their supplier stops them from selling it.

Angry at cost of bottled water in the UAE? You're not alone



DUBAI // Restaurants that refuse to sell local bottled water are to be listed on a website that offers diners a chance to fight back against exorbitantly priced imports.

The website, idrinklocal.com, has been set up by Jae Hwang and William Shintani, two brand consultants in Dubai.

The aim, they say, is to help consumers avoid paying more than they need to.

"The idea was borne from my wife, as she would attend social gatherings at cafes and restaurants," said Mr Shintani.

"She started noticing that there was barely any local water on the market. We decided to do something about it."

The site, launched last month, includes an interactive map that allows residents to see whether a particular restaurant sells local water.

Users can also add information about restaurants not listed.

Mr Hwang said a bottle of water "that has to come from Fiji, go to a distribution centre in the UK and get shipped back to the Middle East", will always cost more and have a much greater environmental impact than local water.

"Some places say it doesn't fit within their brand concept or that they are high-end dining, so local water doesn't work," he said.

"We wanted to know what we could do to address a concern that everybody conceptually understands as an issue, but something that we can make a difference in now."

In the UAE, many establishments refuse to stock cheaper local water, either because the margins are much lower or their supplier stops them from selling it.

"A lot of our customers ask about us providing locally bottled water but we serve only the imported Highland Spring," said a manager of a Dubai branch of The Noodle Factory, who wished to remain anonymous."We used to get Aqua Panna, which is also imported, but now I'm thinking of maybe splitting our stocks between local and imported water."

Bloomsbury's in Abu Dhabi's Al Wahda Mall charges Dh13 for a large bottle of Aqua Panna or Dh15 for a large bottle of San Pellegrino, while Starbucks sells a 300ml bottle of Highland Spring for Dh6.

"The imported water we serve is connected to a contract, so we cannot sell local water," said a waitress at Bloomsbury's.

Mirabel, in Abu Dhabi's Fotouh Al Khair Centre, sells large bottles of Evian for Dh21 and small for Dh14.

"We have a contract with the supplier," said Petgen Escobar, the head waiter at Mirabel. "It's a deal we have to stick to."

And so diners pay.

"These prices are insane when you can buy a bottle of local water for Dh2 to Dh3," said Marilyn Kerry, a resident in Abu Dhabi. "I personally don't even taste the difference so why should we pay for these set contracts?"

Even restaurants that do serve local water often give customers the more expensive imports unless they speak up.

"Everyone should be entitled to local water," said Omar Aker, a Palestinian resident of Dubai. "But many shops that sell local water usually serve you imported first.

"It's misleading to customers because they sometimes don't ask our preference."

The founders of the website have contacted the Ministry of Economy for government support. They also plan to expand the database to Abu Dhabi and other emirates if successful in Dubai.

"You need to do your little bit to help the world," said Mr Shintani. "We are all working here so we should really support the local companies and firms."

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Company profile

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COMPANY PROFILE
Name: Kumulus Water
 
Started: 2021
 
Founders: Iheb Triki and Mohamed Ali Abid
 
Based: Tunisia 
 
Sector: Water technology 
 
Number of staff: 22 
 
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Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
 
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
 
Round 3: February 7-9, Dubai Autodrome – Dubai
 
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
 
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
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Favourite dessert: Umm Ali with dark camel milk chocolate flakes

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