French town fights for its fizzy fortune

Marketplace Staff Feb 23, 2007

French town fights for its fizzy fortune

Marketplace Staff Feb 23, 2007

KAI RYSSDAL: Nestle has been about more than just chocolate for a while now. It’s the world’s biggest food and beverage company. And times are very good. This morning it announced profits were up 14 percent last year after a restructuring to concentrate more on health and nutrition. It owns the weight-loss center Jenny Craig now. As well as its long-held brands like Dreyers Ice Cream and Perrier. But officials of the little town in the south of France where Nestle gets that bubbly water are giving company lawyers some indigestion. John Laurenson went to the source in Vergeze, France.

SOUND: Bubbles bursting at surface of Perrier spring.

JOHN LAURENSON: Hear that gloup, gloup sound? Natural, fizzy mineral water bubbling out of the ground.

The Romans discovered it and, being Romans, bathed in it. In the Middle Ages, people called it “Bouillens” because the water looked like it was boiling. Then a century ago a certain Doctor Perrier devised a way of reinforcing the fizz with gas from the spring and a world-famous brand was born.

Perrier has become the best-selling mineral water in the world. It sold over 800,000 bottles last year.

At the town hall of Vergeze where the Perrier spring is situated, they’re discussing financial support for the local basketball club. Two-thirds of the money this town receives comes from taxes paid by Nestle. When a few years ago the Swiss multinational experimented with making a similar mineral water in Egypt, people here got nervous. So, says Mayor Rene Balana, they voted to put Perrier on the map. Literally.

RENE BALANA [voice of translator]: For some time now there’s been a climate of suspicion, talk of transferring production abroad, making Perrier elsewhere. We don’t want to stop anyone doing what they’re legally entitled to do, but over the years people have gotten used to calling it the Perrier spring. So we thought why not just make that official?

Before Christmas, a French court ruled that they could keep using “Perrier” as a place name at least until a more-thorough judicial enquiry has been completed. But Nestle does not intend to let Vergeze have its way. Pierre-Alexandre Teulie, in charge of communications at Nestle Waters France, says it’s a matter of principle.

PIERRE-ALEXANDRE TEULIE: We are the owner. It’s a registered trademark. We don’t want to share it.

LAURENSON: But aren’t you sending out the wrong signals? Aren’t you suggesting to people that you might want to produce Perrier water in another place?

TEULIE: That’s not the topic. We are here to defend our rights on our brand.

LAURENSON: But it could be the topic in the future?

TEULIE: Who knows what the life of a company can be in a few years?

At a bar in Vergeze, I meet up and drink a little — guess what? — with three of the 1,000 members of the Perrier Defense Association. Nestle says this extraordinary group — what other brand has a supporters’ club? — is a front organization for the Communist-led CGT labor union. Its members include university professor and ex-Perrier employee Jacques Ferrer. He says the association is about keeping Perrier true to France and a very French idea. That idea is that, like wine or cheese, what makes a mineral water is not so much the maker but the place it’s made.

JACQUES FERRER [translator]: Perrier is a natural mineral water. Not soda water. Not seltzer water. Natural. The water that comes out of the ground at this particular place contains a whole list of properties, certified by the Ministry of Health. It’s unique. Like a wine. If a Bordeaux doesn’t come from Bordeaux, it isn’t a Bordeaux. It’s the same for Perrier.

Nestle disagrees. They say Perrier can be produced anywhere. Something which could be valuable if sales increase dramatically in the future and supply from Vergeze can no longer meet demand.

“What if,” said the mayor as he accompanied me to the door, “China starts drinking Perrier water?”

What’s in a name? In this case, potentially, a lot of money.

In Vergeze, southern France, this is John Laurenson for Marketplace.

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