Small bottled water companies worried about water tax

PORTLAND, Maine --Some small companies that sell spring water in Maine fear they'll be hurt and possibly driven out of business by a proposed tax targeting the nation's biggest bottled spring water company.

The tax, which could to go to a referendum vote next year, surfaced as a response to the rapid expansion of Poland Spring.
Poland Spring would pay $100 million a year under the proposed tax of 20 cents per gallon of water drawn from the ground.

But many of the two dozen smaller bottled water companies in Maine, some of which would pay nothing under the terms of the tax, are as firmly opposed to the new fee as is Poland Spring, a Nestle subsidiary with nationwide distribution.
Bryan Pullen, for one, said his Summit Spring brand, which he sells to 2,000 customers in Maine and New Hampshire, could be wiped out entirely.
"It's a crippling tax," said Pullen.

The proposed tax would apply to water drawn from Maine aquifers for sale as bottled water. The tax, which would only apply to sales in excess of 500,000 gallons a year, would be used to fund an independent board to oversee and monitor the state's aquifers.
Pullen, who borrowed $1 million to buy the spring, said he sees the fee as a tax that would be most damaging to small businesses and arbitrarily target the users of one particular resource.
"Is there a tax on Maine lobster because we take Maine lobster and sell it all over the world?" he asked.

A spokesman for the citizens' group that submitted more than 50,000 signatures to get the water tax on the 2006 ballot said he believes the bottlers were overstating the effects of the tax.
"Our belief is people would be willing to pay an additional 3 cents (per 20-ounce bottle) knowing that the money was going to be invested in Maine for sustainability," said Dick Dyer of H2O for Me.

Tom Brennan, natural resources manager of Poland Spring, said the company's size would help it withstand the tax. But if the proposal were to pass, he said, Nestle would stop selling water from Maine and concentrate on its other seven brands.
Many owners of smaller water companies in Maine note that they don't have the resources of Poland Spring, which has the backing of a multinational corporation and multiple water supplies in other states.

Rebecca Evangelista, general manager of Mount Desert Spring Water in Southwest Harbor, said expansion plans at that company are on hold until the issue is settled.
The Maine secretary of state has a March deadline for validating the petitions. If validated, the proposal would be considered by the Legislature, which must either approve the tax or send the question to voters.
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Information from: Portland Press Herald, http://www.pressherald.com
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