(FORTUNE Magazine) – Ever wonder what's in those little bottles of water you pick up at the health club or those gallon jugs you lug home from the supermarket? Poland Spring did. Back in the early 1900s every bottle of the natural spring water from Maine contained an offer: "$500 reward for evidence which secures conviction of any person for refilling bottles bearing our trademark or for selling as Poland water any water not from Poland Spring." That was long ago, of course ... but hold on. The labels on every bottle of today's Evian water contain a line that reads, "Do not refill."
It makes you think. Do the people at Evian (which is "naive" spelled backward) know something we don't? And while we're on the subject, what the hell is the guy in the photo at the right doing?
Of course, lots of people believe the bottled-water business is a scam to begin with. The naysayers can't figure out why otherwise normal people would pay good money for something they can get for nothing, and they might be onto something. Despite the pretty pictures on the labels that would lead us to believe that the water inside comes from towering glaciers or crystal-clear springs, 25% or more of the bottled water we buy is drawn from municipal sources--filtered to remove minerals and things that might be bad for us, but from the very same reservoirs that supply our homes and apartments. We're not, by the way, talking fly-by-nights. Pepsi's Aquafina and Coke's Dasani, the country's top-selling brands of bottled water, come from municipal sources.
So why do we plunk down 89 cents for a one-liter (33.8-ounce) bottle of Aquafina or Dasani, 99 cents for a liter of Poland Spring, $1.49 for a liter of Evian or Volvic spring water from France, or $2.79 for a 28-ounce bottle of Voss well water from Norway? Mike Bellas, chairman and CEO of Beverage Marketing Corp., has one answer: "Bottled water is affordable, portable, all natural, dietetic, noncarbonated, doesn't have to be refrigerated, and has more consumption occasions than any of the beverages we follow."
It's also still cool. When was the last time you saw a Major League ballplayer or a TV star without a bottle close at hand? It's not a big-ticket item, which makes it a hit with people of any income level. And while we can all recall stories of contaminated municipal water and guck in the pipes that carry city water into our homes, bottled water is pure as the driven snow.
Most of the time. In 1996 the state of Massachusetts uncovered an industrial solvent and possible carcinogen called tricholoroethylene in a well that was providing raw material for a local brand of bottled water. In 1997 the state shut down a gentleman from Dorchester who was allegedly pumping water from a grungy basement into bottles labeled YOUTH FOUNTAIN and selling them at a storefront down the street. "I'd put that stuff in my gas tank before I'd drink it," a Boston official said at the time.
In 1998 the New York City Health Department embargoed 18 brands of bottled water (including such all-time favorites as Acqua Panna, Arctic Springs, and Paradiso), noting they had failed to meet state labeling requirements and warning that they could "present health risks if consumed." Two years later the NYPD, FBI, and FDA's office of criminal investigation were called in to figure out how ammonia and a lye-type cleaning agent got into water from six bottles of Poland Spring, Perrier, and Aquafina sold in New York City restaurants and markets. After combing through the companies' records, the experts concluded the problems stemmed from accidental misuse of containers, not manufacturing-related issues. Then-mayor Rudy Giuliani warned New York's bottled-water drinkers: "Make sure you open the bottle yourself."
Across the pond, the Crown Prosecution Service in Wakefield, England, sent David Petrie--proud owner of two Porsches, a Mercedes, and a Range Rover--to jail for six months in 2001; it seems Longtown Bottled Water, which provided the wherewithal for the cars, was nothing more than tap water. In 2002, J.H. Marshall pulled products off the shelves when it discovered bacterial contamination in some of the bottles of the Cotswold Spring and Aquaid Cotswold water it was shipping to markets in London, Manchester, and the West Midlands.
Since word of product tampering often stimulates copycatters, neither bottlers nor their insurers make a fuss when tampering occurs. Even so, considering the vast amounts of bottled water sold in the U.S. and abroad (Europeans drink far more than Americans), the cases of mislabeling and contamination that make headlines are a drop in the bucket. Here's the really good news: Given the price of the average bottle of water, organized crime is not likely to enter the business. "If you're going to go into counterfeiting," says Brian Jenkins, a security expert at Rand Corp., "you're not going to make $1 bills. Too much work for too little return. If you're going to tamper with a consumer product, you're not going to choose water that sells for $1 a bottle.
"At the same time," says Jenkins, "we do worry about one-off things. Here's an example. You're in Central Park. It's a hot day. You buy a bottle of water from a vendor who twists off the cap and hands it to you. You drain the bottle and toss it into the waste container on the guy's cart. We worry that the vendor might fish out the bottles that night, refill them from his tap, and resell them the next day."
Bill Daly, a former FBI investigator now with a private security firm in New York, has another concern. "The other day I'm helping my wife unload the groceries, and I see she bought a no-name six-pack of municipal water from Nashville. That doesn't make sense. Everyone knows New York City has the best water in the country."
Times--and tastes--change, but at one point Fortnum & Mason shared Daly's view. In the 1990s the 300-year-old London firm's rules for a perfect cup of tea went something like this: Use premium blends, keep air out of the canister, and brew your beverage with the finest water available--New York City's, if possible.
Which brings us back to the guy in the photo, who's refilling one-and five-gallon containers at a hydrant on 36th Street in New York City. Shame on us cynics. He's probably up to nothing more than a couple of cups of tea.