The Ethiopian Bottled Water and Soft Drinks Manufacturing Industries Association (EBWSDMIA) based on a recommendation from the Ministry of Trade and Industry (MoTI) wrote to the National Bank of Ethiopia (NBE) to recommend that banks suspend approval of the letter of credit (LC) for partial import of input for the bottled water industry.
The association in collaboration with Food, Beverage, Pharmaceutical Industries Development Institute, which is under MoTI, Ethiopian Environment and Climate Change Commission, Ethiopian Standard Agency (ESA), and Food, Medicine and Health Care Administration and Control Authority has been working for the last year including undertaking detailed studies to suspend the use of neck sleeve packaging in the bottled water industry.
The case has been also tabled at the National Standardization Council, which is responsible for approving the national quality and standardization strategy proposed by the Ethiopian Standard Agency (ESA), at the recent meeting followed by the approval of Fetlework Gebregziabher, Minister of MoTI and chair of the council that comprised members from different ministries and agencies like Ministry of Health and Agriculture.
Due to the acceptance of the association in partnership with the stated stakeholders announced that as of Tuesday July 23 the water production should halt the use of the neck sleeve, which is mostly imported plastic.
“To realize the decision the association has written a letter to the governor of NBE, the central bank, to order banks to stop issuance of the LC for the import of the input for the water bottlers,” Ashenafi Merid, General Manager of EBWSDMIA, told Capital.
He said that the letter that copied for MoTI has asked the central bank to impose on banks to cut the hard currency allocation for neck sleeve.
“MoTI has also promised that it would support the decision and follow the illegal activity to import the neck sleeve including via contraband route,” Ashenafi added.
He said that members came voluntarily to be part of the association due to that they have to respect the decision and suspended the use of neck sleeve as of Tuesday.
Even though the association and the relevant government bodies stated that the use of neck sleeve should be halted as of July 23 the issue does not get mutual acceptance by manufacturers, according to the sector actors.
“There are three groups on the issue,” an expert in the sector told Capital. The expert, who preferred anonymity, said that that the first group expressed its concern that the public might lose its trust in the bottled water that is not sleeved by the plastic paper on the neck. “It has become a custom on the market due to that some bottlers are not interested to halt the production without neck sleeve,” he added.
According to the expert, the second group is that it has massive stock on its center and demands the decision to postpone for another period, while the third group is who supports the current decision.
Experts on the sector argued that the new decision would not have enforcement or penalty if it is by passed by any manufacturers.
“We wrote the letter for NBE due to it is one of the ways to control barring the use of neck sleeve, and MoTI has also promised that it would control the import of the product,” Ashenafi argued.
He said that the association is formed under mutual interest and the current move is also the interest of the sector, while the full applicability might takes time.
“Currently the association is developing a code of conduct that will govern the members and the sector. The code of conduct is also consider the full implementation of refusing to use of neck sleeve on the production,”
“Refusing neck sleeve packaging has all benefit than side effect on the market,” Getnet Belay (Eng), President of EBWSDMIA, said.
Traditionally local manufacturers use the neck sleeve that becomes a trend for every bottlers that are currently reached at 85. Getnet said that the using neck sleeve has made the sector vulnerable for forged producers, while refusing the use of it same production time and cost.
Ashenafi said that for instance factories whose machine for the sealing damaged should wait for days until it is maintained and sometimes the product import might be delayed, which also forced bottlers to cut their production.
They also claimed that it is pro environment. “The neck sleeve is very small and is difficult for collection and recycling,” the president said.
Recently Solomon Tadele, Director General of Food, Beverage and Pharmaceutical Industry Development Institute told Capital that neck sleeves packaging is not common in other countries and it is not mandatory on Ethiopia’s standardization rule.
Tradition pioneer water bottlers started the neck sleeves packaging followed by the late comers, but it could not be a measurement for standard or quality.
Some other bottlers like soft drink and juice manufacturers in Ethiopia are not using neck sleeve.
Solomon said that such kind of packaging is costing the factories by importing machines for the specific packaging, additional labour cost for the operation besides importing unnecessary raw material.
Based on their capacity water bottlers are allocated from USD 40,000 to USD 50,000 to import neck sleeve, which is huge sum in total, but it would be stopped as per the claim of the association.