Bottled drinks companies under pressure to boost recycling rates

A transatlantic backlash against soaring use of plastic bottles has forced the world's two leading drinks manufacturers to pledge dramatically to improve their recycling rates amid growing public concern at the environmental impact of bottled drinks.

Figures released by the Department for Environment, Food and Rural Affairs (Defra) show that sales of mineral water in Britain reached 965 million litres last year, an increase of nearly a third since 2001. Industry studies put the value of the bottled water market in the UK at £1.68bn. Sales in America have more than doubled in a decade to £5.4bn a year.

But there are growing signs that the major beverage companies are being forced to rethink their sales strategy amid a consumer-led wave of action by a number of public bodies – including Liverpool City Council and Defra – to ban bottled water and dispensers in their buildings while highlighting the ecological cost of using mineral water in plastic containers.

Coca-Cola and PepsiCo, which between them account for 55 per cent of the global soft drinks and mineral water market, have vowed to overhaul their operations to recover and recycle the billions of plastic containers used to sell their products worldwide.

Buoyed by this success, campaigners are calling for an EU-wide increase in compulsory plastic recycling targets for drinks manufacturers. In America, a campaign has been launched to lobby Congress to invest heavily in the public water system to cut down on bottled water use.

Global bottled water consumption now stands at 180 billion litres a year, up from 78 billion litres a decade ago. In the US, demand has risen by nearly four billion litres since 2004, to 31 billion litres last year.

Chief executives at drinks companies are concerned that the campaign by consumers and governments to curtail bottled water consumption will cut sales in the multibillion-pound industry, which has boosted profits significantly for companies such as Coca-Cola, PepsiCo and Nestlé as demand for healthier drinks increases.

Coca-Cola announced last week that it intended to recycle all its plastic bottles in the US within five years. A £30m recycling plant will be built in South Carolina with a capacity to handle two billion bottles a year with similar facilities planned for Austria, Mexico and the Philippines. Sandy Douglas, the head of Coca-Cola's US operations, said: "The long-term sustainability of our business depends on our ability to ensure the sustainability of our packaging." PepsiCo, which owns the Aquafina brand and is the second-largest bottled water producer after Nestlé, has vowed to improve its recycling performance. Indra Nooyi, the company's chief executive, said the company needed to "do more" to recycle plastic containers.

Environmentalists argue the companies are reacting to growing unease at the expansion of the bottled drinks industry. Of the 13 billion plastic bottles bought in the UK last year, just 2.7 billion were recycled. It is estimated that it takes 1.5 million barrels of oil a year to produce all the plastic bottles required worldwide.

Liverpool City Council said it will save £48,000 a year by switching to tap water in all its buildings while San Francisco has banned city departments from buying bottled water dispensers and pledged to phase out large dispensers by the end of the year. In New York, the city authorities have run an advertising campaign encouraging the use of tap water.

Sustain, a UK-based campaigning group focusing on food and drink, said it was up to governments and institutions to set an example to consumers. Jeanette Longfield, the charity's co-ordinator, said: "If public bodies are using taxpayers' money to buy bottled water then they are not in a position to preach to consumers about changing their habits."

Under the EU's packaging directive, the current target for 20 per cent of all plastics to be recycled by producers will expire next year and campaigners say a more stringent target is vital. Michael Warhurst, waste and resources campaigner for Friends of the Earth, said: "There should be a push for that target to be set at 100 per cent. The directive means there is a well-understood structure in place to compel manufacturers to recycle more plastic than they currently do."